Bitcoin: Booming or Banned?

Bitcoin has certainly become all the rage in the past few years. Its price captures the world’s attention, whether it rockets upwards or plummets downwards.

But now that Bitcoin’s price has been hovering around $60,000 between April 10 and April 18, 2021—higher than ever before—legendary investor Ray Dalio predicts that the United States government will likely ban the cryptocurrency. (Billy Bambrough, Forbes). He claims that no country, including the U.S., wants to compete with another currency for monetary hegemony. Id. A quick dive into the history and law surrounding Bitcoin and American currency itself will help clear up Mr. Dalio’s surprising claim…

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Cryptocurrency, Featured TopicRace to the BottomReid Melton
Cryptocurrency: Rules, Regulation, and the End of the Wild West

COVID-19 ushered in a period of economic uncertainty. Stimulus, liquidity, and mounting debt have fueled inflation and in turn, the rise of cryptocurrency. (Julia La Roche, Yahoo Finance). Companies have been looking for alternatives to traditional securities in order to build and sustain their wealth during the period of economic uncertainty caused by COVID-19. Id. On February 8th Tesla, Inc. (“Tesla”) purchased a $1.5 billion stake in Bitcoin—a popular cryptocurrency. (Sam Shead, CNBC). On April 13, a single bitcoin was valued at approximately $65,000. (Omkar Godbole, CoinDesk). However, even with Bitcoin’s rising popularity, billionaire and manager of Bridgewater Associates, Ray Dalio recently predicted that the use of cryptocurrency will be prohibited in the United States in the coming months, citing the Gold Reserve Act of 1934. (Billy Bambrough, Forbes)…

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Cryptocurrency, Featured TopicRace to the BottomSam McCarty
Billion Dollar Mergers: Derailed, On-Track, or Blowing Smoke?

Trains are the future of a greener and more interconnected economy. In March 2021, Canadian Pacific Railway (“CPR”) and Kansas City Southern Railway Company (“KCS”) publicly announced that they would merge, a move that highlighted the railroad industry’s potential to modernize American commerce. (Dan Ronan, Transport Topics). With its promise to create the first United States-Mexico-Canada rail network, the deal inspired hope in easier trade and localized networks across North America. Id. Shortly after the merger announcement, in April 2021, KCS abandoned this deal for a more lucrative merger with Canada National Railway (“CN”), a competitor of CPR. (Greg Roumeliotis, Reuters)…

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Deals and M&A, Featured TopicRace to the BottomWill Rigali
Canadian National Steals Deal from Canadian Pacific to Merge with Kansas City Southern Railway

On March 21, 2021, the Canadian Pacific Railway and the Kansas City Southern Railway Company (“KCS”) announced a cash and stock deal valued at $29 billion to link the United States, Mexico, and Canada by rail for the first time (Lauren Hirsch, The New York Times). The two corporations would have merged their rail networks into a combined 20,000 miles of tracks stretching from British Columbia through the central U.S. and into Mexico. Id. The combined company, called Canadian Pacific-Kansas City, would have been the smallest of all the major railroads operating in North America, but it would have provided significant economic benefits based on the United States-Mexico-Canada Agreement, a multilateral free trade agreement that was enacted as a successor to NAFTA in July 2020. Id. The merger would have resulted in the common stock shareholders in KCS receiving 0.489 of a Canadian Pacific share and $90 in cash per share for each share held of KCS common stock. (March 2021 Investor Presentation).

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Deals and M&ARace to the BottomMichael Weinhoffer
After Its IPO Flubbed, WeWork Jumps On The SPAC Train

After its failed 2019 Initial Public Offering (“IPO”) attempts, WeWork announced, on March 26, 2021, it has agreed to go public with a special purpose acquisition company (“SPAC”). (Reuters Staff, Reuters). This past year, SPACs have become the hottest trend in finance. (Tom Huddleston Jr., CNBC). According to a PricewaterhouseCoopers analysis, roughly 230 SPACs went public in 2020, raising about $71 billion in funding, a new record for SPACs in a single year. (PricewaterhouseCoopers). The number of SPACs that have gone public in 2021 is more than the annual total for IPOs in past years for both traditional IPOs and SPACs combined. (Rani Molla, Vox). Companies like DraftKings, Nikola Motor Co., Opendoor, and Virgin Galactic have all used the popular method of taking companies public through SPACs. (Tom Huddleston Jr., CNBC). SPAC mania is still booming, and WeWork is just one of many newbies on the expanding list of companies targeted by SPACs. Id.

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Deals and M&A, Trending TopicsRace to the BottomHenali Patel
SPACs: A Fast Track to Fast Cash?

You may have heard of an initial public offering (“IPO”), but what about a special purpose acquisition company (“SPAC”)? Once viewed as a “sketchy Wall Street arcana,” a SPAC is a publicly traded shell company created for the sole purpose of merging with or acquiring a private company so the target company can forgo much of the traditional IPO paperwork. (Heather Perlberg, Bloomberg; Julie Young, Investopedia; Camila Domonoski, NPR). In recent years, SPACs have increased in popularity to the extent many famous individuals, such as baseball legend Alex Rodriguez, professional-basketball-superstar-turned-DJ Shaquille O’Neal, and former House of Representatives Speaker Paul Ryan, are now creating them. (Heather Perlberg, Bloomberg). In 2020, U.S. SPACs raised $83.3 billion, up from $13.6 million in 2019. Id. This year, SPACs have already generated $73 billion and make up around 70% of the IPO market. Id. How did SPACs become so popular and how do they work?

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Trending Topics, SEC Enforcement, Deals and M&ARace to the BottomCameron Van Beek