DraftKings CEO sounds alarm on SPAC market: 'Hopefully the market settles down a little bit there'

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DraftKings' success going public through a special purpose acquisition vehicle helped kick off a surge in SPACs this year. CEO Jason Robins says the market may overheat.

There are several different factors to consider for companies deciding if they want to merge into SPACs, said Schachter. The most important is finding the right fit between the investor base that has put money into the blank-check company and the company, itself. SPAC owners should have a track record taking companies from the private market to the public market, either financially or operationally, Schachter said.

"Just because you've made money doesn't mean you're going to be a successful SPAC issuer," Schachter said. "LeBron James or Michael Jordan might be the best basketball player, but if you gave them ice skates, I'm not sure they'd be Wayne Gretzky. Just because you've been successful doing one thing doesn't mean you will be successful doing something else.

While most SPACs are targeted, the focus of the investment vehicle is less important than the actual track records of the individuals operating the shell company who will continue to invest in the company moving forward. In recent weeks,

 

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Jason Robins should focus his time on DraftKings

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