Morgan Joseph

John Sorte Appears on CNBC’s “Squawk on the Street”
4/22/08

John Sorte, Morgan Joseph’s President and CEO, appeared on CNBC's mid-morning “Squawk on the Street” as an invited guest to discuss Special Purpose Acquisition Companies (SPACs) and the firm’s Inaugural SPAC Conference, scheduled at the Pierre Hotel in New York City the following day. Noting the recent rapid growth of SPACs, the program’s moderator, Erin Burnett, focused on investing in what she essentially indicated was a blank check company. Mr. Sorte pointed out that reputable investment banks underwriting SPACs, such as Morgan Joseph, look to the experience of the management and the structure of the transactions.

Mr. Sorte noted that investors may want to consider the management team’s prior experience. Additionally, he pointed out that investors have certain downside protection prior to the approval of an acquisition since generally about 99% of the IPO proceeds go into a trust fund which is invested in money market instruments. He added that the SPAC management typically contributes to the operating expenses of the Company while they look for an acquisition. Finally, he noted that each investor has the opportunity to vote on the proposed acquisition and has the ability to receive their pro-rata share of the amount in trust if they are not in favor of the acquisition.