Alex Rodriguez's Slam Corp, the shell company he founded, has granted a three-month extension to its merger deadline with Lynk Global. However, this extension comes with a significant cost: Slam Corp is required to refund $81 million to investors who chose to redeem their shares rather than participate in the direct-to-smartphone satellite operator's venture. The new deadline for the merger is March 25th, according to a December 26th regulatory filing.
Slam Corp, a special purpose acquisition company (SPAC), initially secured $575 million through a Nasdaq listing in February 2021. Subsequent waves of investor redemptions have significantly depleted its trust account, leaving only $23 million remaining. The original merger deadline was February 2023, but it was extended by a year, triggering an initial wave of redemptions. A non-binding letter of intent to merge with Lynk was then signed in December 2023.
In September, following a four-month extension to the merger deadline (initially set for December 25th), Lynk Global's CEO, Dan Dooley, cited the need for more time to navigate the Securities and Exchange Commission (SEC) regulatory process. The introduction of stricter SPAC merger regulations in 2024, aligning them with traditional IPO requirements, likely contributed to these delays.
Lynk Global planned to raise at least $110 million through the SPAC merger, utilizing existing funds and a private share sale. However, high SPAC redemption rates, a common trend across various industries, have presented challenges. Lynk Global also faces competition from SpaceX and AST SpaceMobile, as their direct-to-smartphone satellite projects progress.
The company outlined plans for a $40 million Series B funding round alongside the SPAC merger, but recent updates on this haven't been released. Lynk Global requires additional capital to expand its constellation, having already deployed five, in-house built, pizza-box-sized satellites. This constellation currently supports intermittent texting and other low-bandwidth services in the Solomon Islands, Cook Islands, Palau, and several other countries via collaborations with local telecom companies.
Expanding the satellite constellation will improve coverage and reduce latency, enhancing connectivity for users beyond cellular reach. Lynk Global's ultimate goal is to deploy 5,000 satellites for global coverage.