An Introduction to the DPCM Special Purpose Acquisition (NYSE: XPOA) Company
The surprising turns around the XPOA SPAC are certainly very strange. A well-known and connected team with a large sized target in mind. Entering into a rapidly growing sector.
It is certainly surprising to see the share price sitting so idle.
Entering the open market with an upsized IPO of $300 million, perhaps the lack of any potential target has let the acquisition company stagnate. As of October 20th 2020, each unit consisted of the standard $10 share and one-third of a warrant.
A deep dive into the team and goals of the DPCM Capital Inc Acquisition Corporation reveals a lot more controversy and shadiness. The sort of things you would usually find surrounding the smaller and less credible SPACs floating around.
Sponsor Analysis & Background
The listed sponsor is CDPM Sponsor Group LLC. Alongside UBS Investment Bank as the sole underwriter of the company. It certainly restores a lot of faith in the fact that a single $300 million SPAC is able to secure a solo book-runner of such prestige.
However, the true sponsor deal flow is set to arrive through the extremely well-connected and well-known figures that constitute the XPOA SPAC. The SPAC also introduces a fairly novel concept of “Special Advisors.”
The CEO and Chairman of the XPOA SPAC brings with him a highly successful yet somewhat controversial history across Silicon Valley.
One of the heads of the 3 extremely successful companies across the tech industry.
- TellMe Networks (sold to Microsoft 2007)
- Klout (sold to Lithium Technologies 2014)
Regardless of the negative news around Mr Michael and his tenure at Uber. He has certainly elevated the company during his tenure as Chief Business Officer (2013 – 2017).
Not only securing the ridesharing company around $15 billion in capital but also brokering partnerships with a number of multinational companies such as American Express, AT&T, Daimler and even Toyota!
However, Uber and Mr Michael did not end their relationship on the greatest of terms.
A quick look at Mr Emil Michael’s other highly successful investments includes Bird, Codecademy, Docker, GoEuro, GoBrands, SpaceX, and Stripe.
An extremely accomplished and well-known investor across the Silicon Valley VC scene with over 20 years of experience. Mr Pishevars flagship venture was the co-founding of Sherpa Capital.
This VC firm is highly successful with Mr Sherpa personally managing the first three funds. Totalling $650 million under management. The company’s highly successful performance was only guaranteed considering Mr Pishevars previous track record at Menlo Ventures.
With Mr Pishevar identifying and leading key investments in Uber, Airbnb, Slack, Robinhood, Machine Zone and Tumblr!
Perhaps his most relevant venture to the XPOA SPAC was his creation of the Hyperloop One (currently called the Virgin Hyperloop).
An unbelievably seasoned and experienced investor across multiple sectors, his investments from 2011 to 2018 have generated an average gross cash-on-cash multiple of 6.6x.
That’s an internal return rate of 88.3%!
Unfortunately, there does exist a substantial amount of negative public opinion surrounding Mr Pishevar in regards to previous allegations.
Regardless, Mr Shervin Pishevar is highly involved and influential across a variety of high-tech and disruptive sectors. He is a well-known figure with a keen eye. Yet the effect of the negative public image surrounding him remains to be seen.
Dr Eric Schmidt
The former Chairman of Alphabet Inc. In a more advisory capacity. Dr Schmidt served as the CEO of Google Inc from 2001 to 2011. He oversaw and had a large part of the immeasurable success that the company saw across that time.
Alongside the Google Founders (Sergey Brin and Larry Page), Dr Schmidt dramatically increasing the size and offerings of the company whilst keeping it innovative and fresh and one of the largest tech company’s on the planet.
The sheer influence and level of connections that a man that served as the CEO of Google for 10 years is nothing short of great for the XPOA SPAC. Many investors are flocking purely due to his involvement, even as just a special advisor.
A highly accomplished and successful individual. Considered a serial entrepreneur as well as the CEO and Founder of the Baja Corporation. Ms Atkins has a clear preference for the energy, healthcare and networking sectors.
Nothing short of an expert in scaling companies and leading them through extremely successful IPO’s and acquisitions. Having sat in multiple boards and maintaining many high-ranking positions of leadership across numerous companies.
Considered a corporate governance expert with a keen eye for making the board itself a competitive asset. Ms Atkins is nothing short of a fantastic asset herself to the XPOA SPAC.
Dr Peter Diamandis
Dr Diamandis is a fantastic addition to the XPOA SPAC roster. Sitting as CEO of his own personal holding company, PHD Ventures since 1993. Also the Founder and Chairman of the XPRIZE Foundation, a non-profit that aims to benefit humanity.
Dr Diamandis certainly has a keen eye for disruptive technology. As the Founder of Singularity University to also founding an advanced health-tech diagnostic company called Human Longevity Inc.
Most recently, Dr Diamandis co-founded Covaxx Inc, a pharmaceutical manufacturer that is currently trialing a COVID-19 antibody. It is clear to see that Dr Diamandis has a preference for the health and medical sector.
However, his SPAC-related experience is hard to miss. Partaking in both:
- Software Acquisition Group Inc (IPO November 2019) – successful merger with CuriosityStream
- Software Acquisition Group Inc II (IPO September 2020) – NASDAQ: SAII
A Founding partner and primary member of the Connectivity Ventures Fund. Mr West is no stranger to the world of private investments and identifying potential gold mines.
The VC is focused on early-stage targets that aim to radically alter lifestyle and the workplace. He currently sits as CIO.
Prior to his tenure as a VC, Mr West sat in a number of high-ranking positions across multiple recognizable companies. Including Viacom, BET and Microsoft.
Across his interesting and highly successful career, Mr West has been involved at Viacom with over $1 Billion in mergers and acquisition-related transactions, having worked closely with the company post-integration.
At Microsoft, Mr West led a number of highly successful joint ventures as well as corporate investments totaling $12 Billion. Also incubating new businesses, primarily Xbox and Windows Media.
Also a highly recognizable public figure with appearances on The Today Show, CNBC, Al Jazeera and CCTV.
A Peabody recognized award winner, primarily the founder and CEO of Full Picture. This company is a full-blown brand accelerator. Having operated in excess of 21 years, the company compliments her interests as an entrepreneur, business strategist, and venture capitalist.
Interestingly enough, Ms Gruver is also a co-founder of the popular television show, Project Runway!
However, her decades of experience within the Brand building scene serves nothing to benefit the XPOA SPAC post-merger.
Targeted Sector & Market Criteria
Entering the opening markets and waving a check of $300 million dollars, instantly places you within a certain tier of companies. The XPOA SPAC is not looking for any penny-stock targets.
We intend to focus our search efforts on North American-based targets with an aggregate enterprise value of $1 billion to $2 billion.DPCM Capital Press Release 2021
The sheer diversity and incredible roster of experience that the entire management team affords the XPOA SPAC the ability to enter the mentioned fields:
While all highly profitable fields that can stand to benefit greatly from the introduction of a $1 billion-dollar company on the open market. The specific focus of the CEO (Mr Emil Michael) alongside certain key members, highlights the: mobility, logistics and space industries above all else listed.
This has led many investors to speculate.
Although steeped in speculation and conspiracy, it is hard to ignore the sheer inter-relatedness that the XPOA SPAC and the Virgin Group share.
Peter Diamandis (XPOA SPAC – director) is both an Engineer and entrepreneur that has an incredible level of involvement within the modern and future age travel sectors. Including the SpaceShipOne, SpaceShipTwo and Hyperloop One.
Co-Founding the Hyperloop One, later involving Sir Richard Branson (Virgin Group) as a key investor. Ultimately renaming the venture into the “Virgin Hyperloop.”
Furthermore, Shervin Pishevar (XPOA SPAC – Special Advisor) maintains a VC that was one of the earliest investors in the Hyperloop.
Emil Michael (XPOA SPAC – CEO) has been a key figure with a plethora of relevant transportation industry experience.
Eric Schmidt (XPOA SPAC – Special Advisor) was an early investor alongside both Mr Diamandis and Sir Branson.
Considering the last round of private funding for the private market Virgin Hyperloop was across 2019. It is about time that the company starts searching for a nice cash injection.
Regardless, the team assembled leaves little doubt that the transportation sector will most likely be entered. The inextricable links between the XPOA SPAC and Virgin Hyperloop are hard to deny.
If you’re looking for borderline conspiracy theory reasoning, check out the link below.
Post Deal Value
The ability to generate deal post value is one of the primary functions of any SPAC. When considering the XPOA SPAC, that factor is considerably harder to assess.
Sure in terms of share price, a sudden upswing is certainly expected. Considering the big names and the sector.
But is that sustained growth? Is that good for the targeted company?
The team behind the XPOA SPAC are renown and famous within their respective fields. How much time can they personally dedicate to the running of a company? Will they be of much help during the merger and acquisition process?
A fantastic team of big-name “Special Advisors” and “Key Executives” is always great, especially when looking to secure some quality targets. But one cannot argue that the XPOA SPAC is lacking the raw grit, experience and hands-on dedication that most SPAC teams have.
XPOA SPAC In Summary…
A common warning across the SPAC sector is to be wary of celebrity-backed ventures. The XPOA SPAC may not have any traditional popular figures attached to it. But the lack of basketball players and film stars does not detract from the fame of the team at the DPCM Capital Acquisition Corporation.
Aiming for the stars with a huge Blank Check and looking to enter a very radically emergent sector, things should be looking a lot better for the XPOA SPAC than they currently are.
Perhaps investors are eager for an announcement?
Investing 101 tells us to always buy in the dip. And right now, the DPCM Capital Acquisition Corporation is far from soaring.