Ribbit LEAP (LEAP) to Liquidate $403M Trust
by Nicholas Alan Clayton on 2022-08-03 at 7:12am

Ribbit LEAP Ltd. (NYSE:LEAP) announced late last night that it will not complete a business combination by its initial deadline of September 10, and will instead redeem all shares.

The SPAC will cease all operations on August 15 and shareholders will shortly thereafter receive $10.02 per share. The move marks another high-profile SPAC ending in liquidation as its sponsor, Ribbit Capital, has been a prominent fintech investor with earlier investments in Robinhood (NASDAQ:HOOD), Zillow (NASDAQ:ZG) and MercadoLibre (NASDAQ:MELI).

It also IPO’d with a highly customized SPAC structure designed to align the long-term interests of its sponsor with the target company including a $100 million forward purchase agreement and long-term lock-ups. But, in a letter to investors, Ribbit Capital conceded that the thesis behind this approach was “wrong.”

Since LEAP’s listing, we held conversations with over 100 potential partners that met our initial criteria for growth, quality, and readiness. We discovered in the process either that those companies did not meet our standard for long-term projected value creation or that they viewed the merits of a transaction with LEAP as less compelling than a traditional IPO or, more commonly, staying private.

For all of the talk about SPAC sponsors being the party seeking to cut a deal and run, it is interesting that Ribbit LEAP observed the opposite phenomenon in its prospective targets as its long-term alignment structures were more a detriment than advantage in negotiations.

The investor letter also cited other complications, first among them that “SEC commentary and actions contributed to a growing perception of the de-SPACing process as a riskier, more complicated path compared to conventional IPOs, discouraging the highest quality companies from giving the SPAC route earnest consideration”, despite the fact that fintech companies that listed via traditional IPO after Ribbit LEAP were down an average -49% from their IPO price themselves.

Ultimately, the Ribbit team explained that in a highly saturated SPAC market, they “saw little appeal in competing with offers from others willing to get a deal done at any cost.” This indicates that this may have been simply a case of unfortunate timing for Ribbit LEAP’s approach, which may have borne more fruit in a different SPAC cycle.


Recent Posts
by Nicholas Alan Clayton on 2023-09-22 at 11:26am

Below is a daily summary of links to the latest SPAC news and rumors gathered across the web.  Heard on the Street: VinFast’s SPAC Backers Are Backing Out Even by the standards of electric-vehicle startups, the $40 billion market value of Vietnamese electric-vehicle startup VinFast is wild, following its combination with Black Spade last month....

by Nicholas Alan Clayton on 2023-09-22 at 10:54am

Murphy Canyon (NASDAQ:MURF) announced this morning that it has closed its combination with Conduit Pharmaceuticals and its shares and warrants are expected to begin trading on the Nasdaq under the symbols “CDT” and “CDTTW” on September 25. The company also closed a purchase of $20 million in Murphy Canyon units at close, which is to...

by Nicholas Alan Clayton on 2023-09-22 at 10:28am

Indie Semiconductor (NASDAQ:INDI), which merged with Thunder Bridge II in June 2021, announced this morning that it has launched an exchange offer to convert each outstanding warrant to 0.285 Class A shares in the company. At Indie’s last closing price of $6.22, this is $1.77 of value each, although the stock has been rising since...

by Nicholas Alan Clayton on 2023-09-22 at 10:10am

Atlantic Coastal II (NASDAQ:ACAB) has entered into a definitive agreement to combine with drug developer Abpro at a valuation of $725 million. Woburn, Massachusetts-based Abpro is advancing a series of drug candidates to potentially treat COVID, cancer and diabetic blindness. The combined company is expected to trade on the Nasdaq once the deal is completed...

by Kristi Marvin on 2023-09-22 at 9:07am

Graf Acquisition Corp. IV (NYSE:GFOR) announced that it adjourned Wednesday’s completion vote for its combination with NKGen Biotech without conducting any business and will reopen proceedings at 4:00 p.m., Eastern time, on September 25, 2023 Once again, the adjournment is being done to provide additional time to continue its efforts to obtain additional financing. This new...


Copyright © 2023 SPACInsider, Inc. All Rights Reserved