caroline♪ caroline: caroline hyde. romaine: i am romaine bostick. let's see where the markets ended on the day. big tech provides another big push for another s&p hi. joe: the question is what you missed? caroline: there has been many in the markets and many has been the rise of the so-called -- known as a blank check company and they have raised over $30 million, more than double last year. the spacs have drawn all walks

of life. billionaire investor bill ackman. former house speaker paul ryan to billy been. we even saw his fairness himself. michael jordan investing in draftkings. draft kings own ceo, you cannot deny they are so popular right now. joe: that is very true. the big question is and we will be talking about this more -- is this blank check companies, that's the kind of thing you think about market forth, speculative mania. me ending my money over to someone else and saying do something great with it. great new way of financing that is superior to the ipo. you cannot deny how much has grown. spac volume up 174% this year. is up 13%.

secondary is down 7%. from a relative growth and financing vehicle, spacs are where it's out. romaine: you also have to talk about relative performance. you have to take a look at what some of the spacs have performed. it has been a mixed bag. you have had some that have outperformed the s&p 500. you can see churchill capital, that is the comparison with the s&p 500, the return above and beyond the benchmark index, 9%. virgin galactic was like a proxy for risk at one point, underperforming by about 5%. a couple of others on that list like alta mesa, getting a little bit of a bump. caroline: it is not always a definite dine out in terms of companies outperforming. it is going to be now dug into why that on a day we are hearing bubble is going to go public and other airbnb may be turning out advances by the likes of bill

ackman, why isn't everyone getting into this parade? joe: let's talk more about them. itter from is joe r washington college of business at the university of business. thank you for joining us. so in your view, is this durable and a sustainable way of raising money that you expect to see more companies utilize going from here on out? >> yes and no. i think there have been a lot of spacs over many years and i expect they will continue. i don't think the enthusiasm we are seeing this year is going to continue. romaine: what exactly -- it may not continue, but so far, we have seen a lot of companies attracted to this vehicle. is there something in the air that prompted companies to take this route? >> i think what's going on this year are two things. one is the high volatility of

stock prices, in particular the near-death experience that a lot of companies had in march that were thinking of going public. it has made in the short amount of time a lot less stressful than spending time in uncertain and ipo. the other thing is there has been extreme underpricing on average this year of traditional ipo's. 's fax are cheaper in comparison if an ipo is going to be severely underpriced. caroline: this is something bill gurley has been talking about a lot. money left on the table for these businesses and the fact many go for the first day pop than perhaps the most money to the company that is going public. why therefore do we get the news today that perhaps bumble might be looking to go public and the

more traditional route? we hear reports that airbnb does not want to go -- it wants to go its own route. why take the traditional route? >> spacs are not perfect either. spac is putting in very little money but keeping 20% of the shares. promotes is deluding both the investors in the ipo of the spac and for the operating company that they merge with. the operating company and those investors are putting in everything and only getting on average about 90% of the pie. spacs have a cost just like traditional ipo's have a cost. joe: let me ask you this. ok, obviously there's a lot of retail interest. some of the hottest names came public. the electric truck company that

had $36,000 in revenue last year. spacs.came public via they could be good for the company going public. they don't transfer as much money. if you look long-term, because there seems to be so much interest in the pop, the hype, the trendy sector of the moment when selecting the company the spac with acquire, is that a taint on the company going forward where you might question is this a good quality of a company that actually went public for more traditional route and had to pass the gauntlet of institutional investors via roadshow and so forth? >> i think that was once true, but today, most of the investors are institutions. there are definitely retail investors but after a spac proposes making an acquisition, they have to get majority

approval, typically super majority approval from the shareholders for the deal to go through. in general, they have to convince institutional investors that this deal makes sense. romaine: what makes sense of the end? you said at the start of this that this trend would not last. it would peter out at some point. is there a situation where the companies have used this have an opportunity to come to the markets -- are these the types of companies that their sales will dwindle away or is there more stability, more substance? , some morer speculative companies like nikola have done spac mergers. one thing that has been noticeable is how few biotech's have done a merger with a spac. biotechs have been a big factor in the ipo market for the last eight years but they are

continuing to use traditional ipo's. we have to remember with young companies and even older companies. even exceed will expectations and produce great returns for customers and others will be a disappointment. reason think there's any that they are an exception. romaine: so glad you can give us your thoughts, professor peter he is an eminent scholar chair at the warrington college of business at the university of florida. for our viewers, we will continue this conversation and who better to talk to than a company that actually used a blank check company to come to market? we will talk to the ceo of skills, the mobile gaming company, and you paradise. he will be on with us next. this is bloomberg. ♪

romaine: welcome back. we are focused on the growing popularity of using spacs to go public. we talk a lot about the companies who do it but what about the blend tech companies themselves. here are some of the biggest offerings that have gone public. pershing square holdings on the left of your screen, bill ackman's company, rebuffed apparently by airbnb. joe, one company that has actually managed to get some deals done, blind eagle acquisition corp. joe: it is striking the size of some of these funds. this is a lot of money and you are handing over billions of dollars in some of these cases. they can hold them for up to two years. in the end, you could reject the deal but it is pretty striking.

you mentioned pershing square. some of them innovating on the inherent business model of the spac. all kinds of innovations this year so we will see where it goes. caroline: flying eagle acquisition took draft kings going public. very much in the press today with the deal with michael jordan advising the board and adding $1 billion to the market cap. also, it's legendary because today, flying eagle doing a new spac with another gaming company. joe: let's talk to someone going through this. andrew paradise, ceo of mobile gaming company skillz. thank you for joining us. to start off, just describe what is skillz for people who are not familiar with it. andrew: skillz is building the competition layer. we are the leading mobile e-sports platform in the world. that means we are a b2b2c technology platform.

allowing to build more competitive video games. in terms on the consumer side, we have a player community that andges, seeking out fair meaningful competition. 2is year, they will play billion tournaments on the platform. caroline: you have agreed to merge with flying eagle acquisition company. beingrself are spac-ed. this is the entity that helped take draft kings public. gaming is your expertise but why have you decided to go to the public market in this way? andrew: when we started the company eight years ago and when i came on seven years ago as ceo, we always planned to be ready to go public by q4 2020. the background and covid both fell into place over the past six months.

as you guys are probably aware. the video give industry has seen exceptional growth due to covid. in skillz, we have the best quarter in the history of the company in q2. route, we were further along in our plans to go public than we had anticipated a little bit earlier. it allowed us to go public faster and more importantly, we can choose our partners with the minimal cost difference in our case. we were able to get top-tier institutional partners to invest in the company via private investment, public equity. we had franklin templeton all participate in the pipe. when i think about life to go public this way, in this case, we have these great long-term institutional investors investing in the company and providing an exit for the venture capitalists who are already investors. romaine: is a long list of names

attached to this. legitimate names, well-respected names. i am curious about how some of those names or other folks in your industry either advise you or just talk to you about this process. did you sort of reach out to anyone or did anyone reach out to you and give you the lowdown on what would be the best avenue for skillz? andrew: absolutely. se have quite a number of spac approach us since the beginning of the year. because of theac incredible history they have had in running spacs successfully, most recently with draftkings. lead, he's anhe exceptional media and technology executive not jeff with draft kings but the former ceo of mgm. and also a long-term investor.

he knows a lot about our that is a major facet of this, partnering with someone who understands. heard that companies are basically engaging in things called spac-offs. there is almost this speed dating process going on between the company, all of these spacs going public and a company looking to go public. what is that process like and do you talk to any other companies that might look to acquire you? andrew: we did look at other potential suitors in the process. i think when you think about going public, there are different paths available to companies. whether it is a direct listing, traditional ipo or a spac. in our case, when you evaluate the dilution against your ability to set up the company for the long-term, for us, it

made the most sense because we view going public as an important milestone. it gives us greater access to capital, and allows us to grow faster. we are building a 100 year vision. we believe competition should have this taken. going public has always been our plan. seven years for me, eight years for in the company, 100 year plan. this is really just the beginning. caroline: i have heard of 10 year plans, but 100 year plans is a whole other level. take us on the journey. what is this money going to be used for? andrew: we talked about the competition layer for the internet. today, we expect to generate $225 million in net revenue in 2020. weeks like to grow that to $555 million in 2022. it's certainly something we are very excited about but when we think about the business, when we started the business, mobile

gaming was $8 billion. today, it is $68 billion. tomorrow in 2025, it is excited to be $150 billion. when you think about the opportunity for us to capture market share and grow our business, it is pretty incredible as we move forward. that is why we say it is so much earlier than it is late in this business because there's so much ahead of us to do. romaine: we wish you luck. great news for you. andrew paradise, ceo and cofounder of mobile gaming company skillz. coming up, we will continue our discussion about spacs, really about the process of going public. we will talk about the more traditional way of going public and it is coming from a company -- bumble set to plan an ipo. we will talk about that coming up next. this is bloomberg. ♪

♪ today, we are focused on blank check companies and

their surgeon popularity. don't forget about a way to go public, the ipo. when you look at the performance, it does seem as though initial public offerings are outperforming in the s&p 500 if you've gone public. joe: absolutely. butt of hype around spacs, easy to forget, a lot of companies still ipo-ing and a lot doing phenomenally well. caroline: we still see today, they are the ones we are talking about going public. airbnb turning down a spac, wanted to go the normal route. and little-known or very well-known bumbling data app. romaine: bumble, very popular app. married so we are not involved in any of that but it is taking a more traditional route of going to the public market. reporting on this story for us a little bit earlier was -- we can

bring in katie roof, bloomberg news reporter, who broke this story earlier about bumble. give us a little sense about what bumble will be valued at here. >> great to be with you. we are hearing they are expecting to be valued between $6 billion and $8 billion and they go public. this is bumble, the parent company which includes the popular dating app and some other dating and social apps they have in europe and russia. so, they are planning to go public early next year and they are talking to bankers right now. joe: why go public? one of the questions we are asking is, is there some quality difference between the companies that choose to go that spac versus the companies that choose to go the traditional ipo route? we know that dating absurd doing extremely well businesswise. if you look at match's performance, x ordinary. is bumble in the same category

of a company absolutely killing it? >> yes, sources say they have done better in the pandemic. , as you can imagine, it is hard for people to meet organically at bars and other social places right now. bumble is doing well right now. match group's stock has done well. maybe they will get a similar revenue multiple when they go public. it makes sense, investors feel like it makes sense for bumble to look at the public markets right now. especially because the public markets are doing well right now. in terms of the question about stack, all of a sudden -- spacs, all of a sudden we are seeing a lot of spacs. many tech companies are talking to spacs. we have no indication bumble plans to go that route given how many there are, it would not shock me if spacs ends up proposing them. spacs used to have a different reputation. major companies were

serious about looking at spacs. as bloomberg reported earlier today, even airbnb had conversations with bill ackman's spac. up until recently, he would never expect a company of that size and caliber to even engage with a spac. we're reporting that airbnb is planning to go the ipo route. certainly, many companies are talking to spcs right now. caroline: remind us of the journey of bumble itself. originally founder of bumble and then elevated to ceo of the holding company, the family of apps they look under. i'm interested in how this company was initially called magic lap and then a stake taken by blackstone. amazing earning it blackstone will be making on this if your evaluation is right. it was just $3 billion last year. katie: that is right.

bumble,der and ceo of she was the founder of bumble, the app, now she is the ceo of not just the app, for the company which includes other apps. she previously was a cofounder at tinder and an executive there. she hada departure -- had a departure there. there were some bad blood that was highly publicized. she replicated the success by creating something new with bumble which is very similar to tinder but has a different reputation partly because women initiate the conversations on the app. it is a women first app. they set the tone of the conversations. it is a different reputation. very similar with the swiping on the app. yes, basically, blackstone took a majority stake which was announced late last year and finalized earlier this year. caroline: a great scoop.

it has been great talking to you about it. you can continue our coverage of the tech ipos with kathleen smith as well. we have been talking a lot about ipos. i have a pop quiz for you guys. romaine, i want your story and answer first. apple, when did it first sell shares? romaine: i believe it was 1980. caroline: i ask you, what else very notable happened in 1980? romaine: i don't know. someone incredibly important to us all was born in the year 1980. joe weisenthal. happy birthday. joe: thank you. romaine: 40 years. caroline: can we show the parabolic growth from just a one million-dollar valuation all the way to $2 trillion. i feel like this is your life. joe: i will now be really resentful that no one got me as a birthday gift back then.

just one share, i would have been happy with that. that's all. i still would work here. romaine: 21% average annual return. you could have been rich. now you work with us. caroline: that is offer what you missed. joe: bloomberg technology is next. this is bloomberg. ♪

emily: welcome to "bloomberg technology." i'm emily chang in san francisco. stocks jumping today to new highs, but not driven by apple, tesla, or zoom. returning to the broader market. but still big news in tech ipo's. offer,rebuffs a merger choosing ins