Martin Franklin on SPACs
From Mariposa's Martin Franklin Expects Shakeout in SPACs · · Bloomberg Television
“This is publicly listed venture capital — you're making a lot of promises of companies that are going to have performance criteria looking out where you don't really have a metric to look at until 2026 — that's venture capital, and I'm not sure that's well suited for the public markets; like many bandwagons there will be a shakeout.”
On , Martin Franklin, Founder & Executive Chairman at ELEMENT SOLUTIONS INC, spoke about SPACs during Mariposa's Martin Franklin Expects Shakeout in SPACs on Bloomberg Television.
About Martin Franklin
Martin Franklin, founder and executive chairman of Element Solutions and founder of Mariposa Capital, has been active in the special purpose acquisition company (SPAC) market. In November 2021, Franklin said he had filed two new SPACs, Brimstone Acquisitions and N2, and described the SPAC market as undergoing a "digestion period" with a "shakeout" ahead, predicting that fringe actors would eventually go away. He contrasted his approach with what he called the "story stocks" and "business plan opportunities" prevalent in the U.S. SPAC market, stating that he targets "very profitable businesses, market leaders in their markets, great management teams." Franklin also said that when buying a SPAC, investors are "really buying a two-year CD with equity upside" and that the real valuation occurs when a PIPE transaction is announced and reviewed by institutional investors. Franklin has also commented on the broader IPO market and economy. In September 2020, he said the IPO market "lacks discipline," with "valuations beyond reasonable" and that "venture capital needs to have more discipline on its expectations and investment banks need to have more reality in how they present opportunities." Regarding the U.S. economy, Franklin said in September 2020 that he did not expect a recession in the short term but anticipated "lower growth." He has also discussed his role at Element Solutions, noting in September 2019 that the company was "very high cash flowing" and "the most under levered company I think I've been in for a very long time," and that he had personally invested over $20 million in the company's shares.