Ethereum Builder ConsenSys and AMD SPAC Plows on Despite 95% of Shares Being Redeemed

Investors in W3BCLOUD’s merger with Social Leverage Acquisition Corp. voted to redeem the majority of shares, according to a filing.

AccessTimeIconJan 4, 2023 at 4:41 p.m. UTC
Updated Apr 9, 2024 at 11:29 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

W3BCLOUD, a joint venture between chip maker Advanced Micro Devices (AMD) and Ethereum builder ConsenSys, says it will plow on with plans to go public, despite investors opting to redeem 95% of the shares in the deal with blank-check company Social Leverage Acquisition Corp. (SLAC).

Billed as a decentralization-promoting alternative to Amazon Web Services, the W3BCLOUD-special-purpose acquisition company combination was expected to bring $345 million to the balance sheet of the combined business and value it at about $1.25 billion. The special-purpose acquisition company, or SPAC, will carry on with just $16.6 million remaining in its coffers for now, following the redemption vote, which was filed over the Christmas period.

  • What Happens to the Spot Ether ETF if ETH Is Deemed a Security in Hong Kong?
    00:43
    What Happens to the Spot Ether ETF if ETH Is Deemed a Security in Hong Kong?
  • Hong Kong's 'Mind Boggling' Journey to Bitcoin and Ether ETFs
    19:29
    Hong Kong's 'Mind Boggling' Journey to Bitcoin and Ether ETFs
  • Are Bitcoin ETFs Driving BTC Demand? Bored Ape NFT Prices Down 90% From Peak
    02:05
    Are Bitcoin ETFs Driving BTC Demand? Bored Ape NFT Prices Down 90% From Peak
  • Is There a 'Significant' Correction on the Horizon?
    01:09
    Is There a 'Significant' Correction on the Horizon?
  • “We remain very excited about the opportunity to merge with SLAC and become a public company,” a W3BCLOUD spokeswoman said via email.

    Last year, which turned out to be something of a nightmare for the cryptocurrency industry, saw a number of high-profile crypto firms canceling plans to go public through a merger with a SPAC. Stablecoin firm Circle and crypto exchange Bullish bowed out last month and trading platform eToro and bitcoin miner PrimeBlock terminated their plans during the summer.

    The W3BCLOUD SPAC also sought a three-month extension, giving those involved in the deal until May 17 to raise enough capital to meet the $150 million minimum cash condition to go public. (The initial announcement in August mentioned commitments for $40 million from ConsenSys and a further $10 million investment agreement with AMD, plus the intention to raise up to $100 million in capital post-announcement.)

    “As markets got tough last year, deals took longer to get done and SPACs started nearing the end of their lives,” said Alan Annex, co-chairman of law firm Greenberg Traurig’s global corporate practice. “The requirement in the charter, designed to protect the shareholders’ money, says you can't extend the life of the SPAC without offering people the option to get their money back at the time you offer that extension.”

    Some of the SPACs today that are experiencing high redemption rates may involve situations where the target wants to go public for reasons other than just raising money, Annex added.

    “When it comes to high redemption rates, it’s not that people don't like the company, just that they don't like it at $10 a share,” he said.

    W3BCLOUD aimed to dilute the high concentration of Ethereum blockchain nodes being hosted in data centers owned by giants like Amazon Web Services. The company’s goal is “advancing decentralization of the hardware layers of Web3,” ConsenSys founder Joseph Lubin said in a statement.

    Read more: What Is a SPAC?

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Ian Allison

    Ian Allison is an award-winning senior reporter at CoinDesk. He holds ETH.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.



    Read more about