Trump-linked SPAC stock goes bonkers ahead of midterms
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SPAC, the Washington, DC-based subsidiary of the Saudi Arabian-based Kingdom Holding Company (KHC), is an investment holding company (IHC) that owns a majority stake in the Washington, DC-based Washington, DC-based Saudi Arabian American Capital Corporation (SADC), the controlling investor for SPAC. SPAC owns approximately 3.8 million shares of SADC common stock, and has voting control over the company that manages the debt of the Middle East, Africa, and Russia, and in particular the debt of SADC.
“The stock price for SPAC has been skyrocketing as a function of the political environment leading to the House of Representatives’ impeachment inquiry. The stock price has made a record high. The stock price is so high that the shares are trading at a discount to what they would have been trading on a stock market. I would call it a speculative bubble,” KHC Senior Advisor, Michael A. Gordon, told the Wall Street Journal.
The current political climate, and the stock price in relation to it, also led to a major, and very rare, change in KHC’s ownership of SPAC. In August 2018, the KHC board terminated its agreement with the SPAC board to control SPAC. The SPAC board then asked for and obtained an agreement for KHC to divest its ownership of SPAC.
As of March 2020, the SPAC board approved the KHC board’s request to increase the firm’s equity interest in SPAC by 100%, to 1.2 million shares. The share ownership has already increased as of the close of market on April 22, 2020.
KHC’s decision to increase the firm’s stake in SPAC has, in part, been driven by its concern about the