Forbes confirms end of deal to sell part of company to exchange Binance

Charlie Taylor

The media group Forbes announced that the agreement by which the cryptocurrency exchange Binance would acquire part of the shareholding control of the platform was not closed. In February of this year, the exchange had announced that it would enter the communications field through the famous magazine – which also includes news portals in several countries – with a contribution of US$ 200 million. Forbes public relations director Bill Hankes told Portal do Bitcoin that the exchange had until June 1 to formalize the deal, which was not done. “In February, Binance committed to investing in PIPE in conjunction with Forbes’ SPAC. On June 1st, the transaction for SPAC expired and Forbes terminated the deal. This includes PIPE, so Binance’s investment has not been completed,” said Hankes. “PIPE” is the acronym for private investment in public capital, as Forbes itself explained when reporting the agreement with Binance. “Binance’s investment will take place through the signing of subscription agreements, representing $200 million of a total of $400 million in private investment in public equity (“PIPE”),” Forbes reported. It is also necessary to explain what a SPAC is. It is the process of opening the capital of a company through the process of acquiring another company. A Forbes report exemplified how the financial tool works: “A person X creates a company A, a Spac, which pays all the fees to make an initial public offering of shares. This company, however, has no structure (employees, machinery, revenue, etc.). It is composed only of person X, who wished to create it. This sole owner negotiates with potential investors to buy the shares of company A, with the prospect of future strategic acquisitions.

Mistrust with SPACs

The New York Times published a report on May 31 explaining that Forbes had aborted the plan to go public through a SPAC. Two sources who gave an interview to the newspaper anonymously said that precisely the financial tool of the SPAC started to generate distrust in the financial market. According to the newspaper, the SPACs failed to live up to the expectations of their investors. And on top of that, regulation got tighter. “Regulators – including SEC chief ary Gensler – have increased scrutiny of SPACs and the stock of several companies that went public through blank check companies plummeted,” the report says.

“Media is a key element,” said CZ

At the time of the announcement, Binance CEO Changpeng CZ Zhao gave a statement about entering the world of journalism: “As Web3 and blockchain technologies advance and the cryptocurrency market matures, we know that the media is a essential element for building a broad understanding and educating users”. Details were even announced on what the structure of the company would look like with the entry of Binance. Patrick Hillmann, COO of Binance, and Bill Chin, head of Binance Labs, Venture Capital Arm and Incubator of Binance, would join the board of directors of Forbes – which will not happen with the cancellation of the deal.

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