2007

Hiring a Personal Shopper

We commented a couple weeks ago on the initial public offering of Oceanaut, a blank check company sponsored by Excel Maritime and its key employees. With the deal successfully completed with a total capital raise of $161 million on Tuesday, we thought it might be worth taking a closer look at the transaction.

But perhaps before we do, we should explain the title of this piece. In our mind, if an investor is interested in investing in the shipping space, he has innumerable potential investment opportunities in the public arena that would suit any requirement. Whether the investor is looking at a particular sector, growth versus yield or a niche player etc., all are available as publicly traded entities with visible earnings streams and known assets. Furthermore, the analyst community has broken down the numbers in a multitude of ways and rated each of them accordingly. So why would anyone invest in a black check company with the hope that in 18 months the company will find an investment opportunity? The only thing we can think of is that the investing community believes the promoters involved can find an off-market special deal, in effect a golden nugget. As part of a new company the deal would not be impacted by the excess baggage an existing company carries around and, in that sense, the deal is more a pure play. Rather than sift through the many public stocks, the SPAC investor instead hires a “personal shopper” to find the perfect “gift.” Or perhaps, in its most simple sense, it is just the thrill of the deal.

This is only an excerpt of Spotlight on Oceanaut – 03/08/2007

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