Investment banks have made billions of dollars off the blank-check craze, and they’ve done it largely without risking any of their own money on hundreds of transactions that have resulted in crushing losses for many investors. A look at one of these transactions demonstrates how.

Acies Acquisition Corp obtained $215 million in an initial public offering in late 2020, capitalizing on investor demand for blank-check corporations, often known as special purpose acquisition firms, or SPACs. JPMorgan Chase & Co, Morgan Stanley, and Oppenheimer & Co were among the investment firms Acies signed up to underwrite the IPO.

Acies, which was essentially a shell business when the offering closed, followed the SPAC design. It had two years to identify and merge with a private firm seeking a stock market listing, or return the money to investors, with the funds it had raised. Acies announced that it was looking for a business in the “experiential entertainment market.”

The team did not have to search for long. According to regulatory documents, bankers advising Play studios Inc contacted Acies manager’s hours after the IPO ended to inform them that the Las Vegas-based creator of mobile casino games was for sale. JPMorgan employed those bankers as well. The two firms announced plans to merge in early 2021, valuing Play studios at $1.1 billion.

Play studios claimed a bright future in the run-up to the merger and the offering of the combined company’s shares. Surging ad sales, a new role-playing game, and cross-marketing opportunities to game players are expected to boost income by 20% in 2021 and 33% this year, according to the report.

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