*As of 2:20 p.m. ET

Last week, we wrote about how IPOs are generally undervalued. Here is a look at how Special Purpose Acquisition Companies (SPAC) are influencing traditional IPOs.

What is SPAC, and how does it work?

Special Purpose Acquisition Companies (SPAC), or blank-check companies, are created solely for acquisition. They are publicly-listed and raise funds through an IPO to acquire new companies. The businesses bought by a SPAC get the benefits of avoiding the complex process of issuing an IPO, navigating through the volatility of the market, and also the probable underpricing of IPOs. Nikola CFO Kim Brady said: "If we had pursued the IPO path, we would not be a public company at this point."

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• The SPAC IPO size and count have constantly been increasing since 2016. In 2019, SPAC IPOs raised $13.6b, up 26% from $10.7b in 2018. 
• In 2020 so far, SPAC IPOs have already raised $14b, more than they raised in all of 2019, with 31% fewer deals.
• On average, SPAC IPOs raised $231m in 2019 and $312m in 2020, a 36% increase.
• In March, April, and May 2020, the count of SPAC IPOs and the deal value were equal to or more than traditional IPOs.
• Popular SPAC acquisitions: Nikola Motors was bought by VectoIQ; MultiPlan Inc. is being acquired by Churchill Capital Corp III; Fisker is planning to go public with the Spartan Energy. Last year, Virgin Galactic was acquired by Social Capital Hedoscopia.
• Pershing Square Tontine Holdings, led by Bill Ackman, is planning to go public this week and potentially raise $4b i.e., 200 million shares at $20 each. Ackman said this SPAC is created to acquire a mature unicorn.

Chevron is buying Noble Energy for $5b in 2020's largest oil deal. The deal is an all-stock transaction which means Noble holders will receive Chevron stock and will end up owning about 3% of all shares. It's one of the first oil deals to occur since oil prices went negative. Shares of Noble ($NE) jumped ~8% upon the news, while Chevron ($CVX) dipped 1%.

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• Last August, Chevron lost its bid for Anadarko Petroleum. Occidental Petroleum ended up winning the bid in a $38b all-cash acquisition. 
• Oil prices fell $0.32 (0.7%) today to $42.82 per barrel. About 30% of shale operators are technically insolvent at $30 per barrel, and 50% are technically insolvent at $20 per barrel. Oil prices briefly went below $0 in April.
• 18 oil and gas companies have defaulted so far in 2020, compared to 20 in all of 2019. 
• Decreases in airline and passenger vehicle travel contributed to the oil and gas sector being hit hard. In April, personal passenger vehicle travel dropped 48% nationally, with higher traffic areas like NYC dropping 63%. 
• Personal passenger vehicle travel has almost returned to pre-pandemic levels: 

• US airlines had 89% fewer passengers in May 2020 than in May 2019, and 96% fewer passengers in April 2020 than April 2019. The 20 largest airlines flew 7.9 million people in May 2020, compared to three million in April 2020. 
• 747,422 people flew on planes nationally yesterday compared to 2,727,355 on the same day last year per the TSA, a nearly 80% decrease. 

Taco Bell is removing 11 items from its menu next month to streamline its drive-thru service. The company said the discontinuation of some popular items would "ensure an easy and fast ordering experience."

What's disappearing?

• The items you'll no longer see as of Aug. 13: 7-Layer Burrito, Nachos Supreme, Grilled Steak Soft Taco, Beefy Fritos Burrito, Spicy Tostada, Triple Layer Nachos, Spicy Potato Soft Taco, Cheesy Fiesta Potatoes, Cheesy Potato, and Beefy Nacho Loaded Grillers,  Chips & Dips, and the Mini Skillet Bowl. (tweet this)
• The Quesarito will no longer appear on the menu but will be available if ordering via the web or app.
• Vegetarian Taco Bell fans have been expressing their disappointment at the removal of the menu's potato-based options. Taco Bell says it plans to add new items for those on plant-based diets.

Why are they doing this?

• It's cheaper. Restaurants can order fewer ingredients and focus employees on specific menu items. In late March, McDonald's temporarily suspended its all-day breakfast menu and removed other items for a similar reason.
• It'll help get people through the drive-thru fast. Though dining rooms in some states have reopened, drive-thru lanes have become crucial to the fast food industry during the pandemic. Offering fewer menu items means employees can prepare and package more efficiently. A less cluttered menu in the drive-thru also means customers won't spend so much time reading and debating what to get.

The Big Picture: Several fast-food and quick-service companies have announced plans to increase the use of drive-thrus and mobile ordering during the pandemic.

• Starbucks announced plans in June to open more drive-thru locations and focus on mobile ordering. Even before the pandemic, 80% of Starbucks transactions were considered "on-the-go," with customers not lingering in the store after making a purchase.
• Chipotle last week said it would hire 10,000 employees in the coming months and that 60% of new restaurants will include a drive-thru lane.
• According to NPD Group, drive-thru lanes at most fast-food chains account for 70% of all revenue.

Taco Bell's updated menu, as of Aug. 13.

Time to let us know what you think:

Productivity Tool of the Day: Here's a tool for managers who can handle constructive criticism: Ratethemeeting by SurveySparrow connects to your Google account and allows each remote Google meeting participant to rate its usefulness and provide feedback. Managers can customize the feedback settings, but default rating prompts include "Goals Were Accomplished' and "Structured Agenda Present" while allowing participants to add their comments.

Something for your kids to do: NYC's Kaufman Music Center has been hosting a series of "Bach Yard Playdates" for kids since April. Every few weeks, pianist Orli Shaham presents a different clip from the center's interactive classical music series for children. The most recent episode included a demonstration of instruments from J.S. Bach's Two-Part Inventions. Upcoming episodes on July 26 and Aug. 2 will feature music by Hector Del Curto and Florence Price.

Pfizer ($PFE) and BioNTech ($BNTX) are supplying the U.K. with 30 million doses of a mid-stage COVID test vaccine. The companies are on track to begin the safety and efficacy test stage this month and get a regulatory review in October. They are prepared to manufacture 100 million doses by the end of the year, and 1.3 billion doses by 2021 if successful.

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• The U.K. now has three different types of vaccines it has ordered for testing, the other two coming from AstraZeneca ($ANZCF) and European company Valneva ($INRLF). Valneva trades on the Euronext and the Vienna Stock Exchange. 
• The U.S. is trialing vaccines from Moderna, Inovio, AstraZeneca, and Pfizer/BioNTech and has had 107,000 of the needed 120,000 volunteers sign up for testing. Moderna claimed last week that its vaccine produced antibodies in 100% of patients, which caused its stock to surge 18%. 
• As of this writing, Inovio ($INO) is at $25.03 a share, up from $4.28 on Feb. 28. Moderna ($MRNA) is trading at $83.00 per share up from $25.93 on Feb. 28. Moderna's 370% rally has cost short-sellers over $1.5b.
• Today, over 300,000 Robinhood users own Moderna stock, up from Feb. 24, when only 12,000 Robinhood users owned any. In addition, 220,000 Robinhood users own Inovio stock, up from 57,000 on Feb. 24. 

eBay plans to merge its classified-ads business with Norway’s Adevinta in a $9b deal that would leave eBay with a minority stake in the division. eBay’s classifieds portfolio includes Kijiji, Gumtree, and motors.co.uk.  

eBay classifieds revenue in the last five quarters:

• Q1 2020: $248m
• Q4 2019: $269m
• Q3 2019: $265m
• Q2 2019: $271m
• Q1 2019: $256m

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• eBay’s classified business generated $1.1b in revenue last year and was valued at $8.5b before the pandemic.
• eBay decided not to sell the classifieds ad business as it would still keep a stake in the division in case of a merger. The Financial Times reported that with a merger, eBay would also benefit from saving taxes. 
• The deal is set to make eBay focus on its core market place business which generated $7.6b in revenue last year.
• Last month, eMarketer reported Walmart exceeded eBay's online sales for the first time, based on May 2020 data. Walmart is now second only to Amazon in online sales, and eBay comes in third.

QUICK HITS

• Facebook's top advertiser for the first half of 2020, The Walt Disney Company, significantly cut its ad spending on the platform.
• Ant Group, the payment arm of Chinese e-commerce giant Alibaba, is planning a public offering in Hong Kong and Shanghai.
• Microsoft's Minecraft will stop using AWS and move to its own Azure cloud service.
• Cal-Maine Foods announced a 62% increase in sales in its latest quarter from the previous year due to a sharp uptick in egg purchases during the pandemic.
• Most security companies send a technician to your home. SimpliSafe doesn’t. Order online. Set it up in 30 minutes. After that you’re protected 24/7.*

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