Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Aspirational Consumer Lifestyle Are Flying High Today

By Lou Whiteman - Feb 1, 2021 at 10:01AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The SPAC has a deal in place to get into the private aviation business.

What happened

Shares of Aspirational Consumer Lifestyle (ASPL) climbed 10% at the open Monday after the special purpose acquisition company (SPAC) announced a deal to merge with private aviation company Wheels Up.

So what

Wheels Up is a 7-year-old provider of small plane services, according to its website, that offers members access to private planes at a more affordable price. Wheels Up flew more than 150,000 passengers in 2020, utilizing its access to more than 1,500 owned, managed, and third-party partner aircraft.

Wheels Up also has a marketing partnership with Delta Air Lines.

Two planes flying towards each other.

Image source: Getty Images.

Aspirational Consumer Lifestyle is a SPAC launched by Ravi Thakran, a private equity investor and former managing partner at luxury brand LVMH.

The deal values Wheels Up at $2.1 billion, and should provide up to $790 million in cash proceeds to the business. That includes $240 million in cash held by the SPAC, and a $550 million private investment from a group of funds including T. Rowe Price, Fidelity, Franklin Advisors, Durable Capital, HG Vora Capital Management, Third Point, Luxor Capital, and Monashee.

The deal is expected to close in the second quarter, at which time Wheels Up would be listed on the New York Stock Exchange under the ticker UP.

Now what

In a statement this morning, Wheels Up CEO Kenny Dichter said, "We believe this will allow us to actualize our founding goal of democratizing private aviation, through our unique membership model, suite of products and benefits, and by bringing the shared economy to private aviation through our Wheels Up app."

Certainly, the transaction will provide a lot of growth capital for Wheels Up, and help the company sustain itself and be opportunistic at a time when much of the aviation industry is struggling.

But given the current excitement, and sky-high valuations, surrounding SPACs, and the uncertainty about how the travel industry will adapt once the pandemic subsides, investors would be wise not to rush on board until we learn more about the company and see how it navigates public markets for a quarter or two.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Aspirational Consumer Lifestyle Corp. Stock Quote
Aspirational Consumer Lifestyle Corp.
ASPL

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
338%
 
S&P 500 Returns
119%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/18/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.