Perella Weinberg stock rose sharply early Monday after going public on a SPAC last week. The stock opened 12% higher on Monday before floating between positive and negative territory later in the day. It closed 0.7% at $ 12.91 per share.
The global investment bank, headquartered in New York City, began trading Friday after announcing the previous day that it was entering into a merger with the special purpose vehicle FinTech Acquisition Corp. IV has completed.
“We are going public because we believe there is a very significant growth opportunity for the company in the future,” said co-founder and CEO Peter Weinberg on Monday in CNBC’s “Squawk Box”.
“The reason we chose SPAC is because it is a transaction, not a process,” like an IPO, said Weinberg, who was CEO of Goldman Sachs International in London prior to founding his own company was. “With all the constituencies we have, our founding investors, our retired partners – very important constituencies to us – it was easier and better to have a SPAC,” which was a hot asset class earlier this year.
However, the insanity coupled with the recent slump in SPAC stocks could lead to riskier deals in the months and years ahead, according to observers.
“Any option you choose, you will end up as a public company,” Weinberg said. “Many of the problems related to SPACs had less to do with the structure than with the companies, which at times were not prepared to go public.”
Weinberg said he’s not worried about how the decision to go public will affect his company, which he founded with colleague Joe Perella in 2006. Previously, Perella, now the firm’s retired chairman, held a number of senior positions at Morgan Stanley.
The merger environment is currently “extremely active,” said Weinberg, anticipating huge changes in many different industry groups, from consumer health care to energy. He added that while trust is very high, there is tremendous pressure on executives to create value and outperform their competitors.
“I think what is going to happen in the SPAC space is that there should be a level playing field when you look at an IPO and a SPAC, especially when it comes to forecasting. We’re still in the early stages of this second round of SPACs and I think that’s going to happen, “Weinberg said.” But the most important thing really is that two years after the event you will likely have the same shareholders. It’s just a different path to the same goal. “