Could giant SPACs be next? • Hacker News Board

Re: Could giant SPACs be next?

#11

Post by jtseun » Sun, Jan 24, 2021, 7:51 PM UTC

sgpl wrote: post #4

I'm pretty bearish on SPACs tbh. Not in the immediate future but 2-3 years out (most of 2021 will be spent on vaccines so I'm sure there will be more stimulus added to the economy). It's just bonkers that there's so many companies that you can take public with this mechanism without more than a handful being duds so it just seems like market participants who are able to launch SPACs are doing so to take advantage of…

I heard someone say "Pre-LOI SPACS are loot boxes for investors".

While they may come off as a pump & dump, all SPACs have a floor of hard cash placing them around $10; notably Ackman's PTSH is $20. Looking at IPOE popping 20% off Chamath's tweets, it does feel like some variant of musical chairs.

Re: Could giant SPACs be next?

#12

Post by creeble » Sun, Jan 24, 2021, 7:52 PM UTC

What's the difference between a SPAC and what used to be called a "reverse merger"?

I.e., when a smaller (but publicly traded) company, merges with a larger private company.

These used to be pretty common scammy ways to generate capital, usually through pump and dumps.

Same thing, just new acronym?

Re: Could giant SPACs be next?

#13

Post by the_mitsuhiko » Sun, Jan 24, 2021, 8:00 PM UTC

creeble wrote: post #12

What's the difference between a SPAC and what used to be called a "reverse merger"? I.e., when a smaller (but publicly traded) company, merges with a larger private company. These used to be pretty common scammy ways to generate capital, usually through pump and dumps. Same thing, just new acronym?

> What's the difference between a SPAC and what used to be called a "reverse merger"?

A SPAC is created for the designated purpose to become a vehicle to take another company public. In a traditional reverse merger situation both companies are engaged in some regular business activity.

Re: Could giant SPACs be next?

#14

Post by babelfish » Sun, Jan 24, 2021, 8:14 PM UTC

hkt wrote: post #8

babelfish wrote: post #3

Earlier quoted context omitted.

Exactly how it looks - “Spack”

Unfortunately, in the UK this is a deeply hateful term for disabled people. Actual hate speech if you couple it with violence etc. What's the old saying? Two cultures divided by a common language..

Wow, I had no idea - thanks for the heads up

Re: Could giant SPACs be next?

#15

Post by jfk13 » Sun, Jan 24, 2021, 8:25 PM UTC

hkt wrote: post #8

babelfish wrote: post #3

Earlier quoted context omitted.

Exactly how it looks - “Spack”

Unfortunately, in the UK this is a deeply hateful term for disabled people. Actual hate speech if you couple it with violence etc. What's the old saying? Two cultures divided by a common language..

Interesting -- as a UK native, I don't recognise that. Maybe it's limited to certain regions/subcultures/???

Re: Could giant SPACs be next?

#16

Post by hakfoo » Sun, Jan 24, 2021, 8:30 PM UTC

dmurray wrote: post #9

gundmc wrote: post #5

What's driving the recent popularity explosion of SPACs? They've been around since at least the early 2000s, but total capital participating has risen nearly tenfold since 2014.

From the company's side, there is a willingness to explore non-traditional methods of going public (see also: direct listings, or not going public at all). I would say this has been driven directly by a perception that companies leave money on the table in traditional IPOs, and indirectly by the rise of the "disruptor" mindset led by tech companies where CEOs are more willing to challenge the status quo. From the inv…

I'd suspect there's two different flows towards "non-traditional" listings.

There's the firms with clear market appeal who think they're getting underpriced by a conventional IPO model, but I suspect there's also firms who just want to bust onto the market and sidestep the normal disclosure and research cycle.

Re: Could giant SPACs be next?

#17

Post by totalZero » Sun, Jan 24, 2021, 8:40 PM UTC

sitkack wrote: post #10

Could someone ELI 15?

Sure. What part?

SPACs are basically stocks in search of a company. People put their resources together, and then eventually the guy who runs the SPAC finds a great company to invest in, and uses the SPAC to buy it.

Nowadays, some companies are using SPACs to go public instead of using an IPO. In some ways it's like the work-from-home version of an IPO; the investors are already subscribed, and the stock is already public.

So far, we have seen small companies get acquired by SPACs. However, there are many private and established companies out there. The article asks whether any of those much larger companies are going to become SPAC targets.

Re: Could giant SPACs be next?

#18

Post by np_tedious » Sun, Jan 24, 2021, 9:01 PM UTC

creeble wrote: post #12

What's the difference between a SPAC and what used to be called a "reverse merger"? I.e., when a smaller (but publicly traded) company, merges with a larger private company. These used to be pretty common scammy ways to generate capital, usually through pump and dumps. Same thing, just new acronym?

My understanding is that a SPAC is more or less a corporation/fund that exists solely for the aim of doing a (or multiple?) reverse merger

Re: Could giant SPACs be next?

#19

Post by missedthecue » Sun, Jan 24, 2021, 9:14 PM UTC

hkt wrote: post #8

babelfish wrote: post #3

Earlier quoted context omitted.

Exactly how it looks - “Spack”

Unfortunately, in the UK this is a deeply hateful term for disabled people. Actual hate speech if you couple it with violence etc. What's the old saying? Two cultures divided by a common language..

Wow never heard of this and I lived in the UK for an extended period of time. Thanks for the info.

Re: Could giant SPACs be next?

#20

Post by Judgmentality » Sun, Jan 24, 2021, 9:19 PM UTC

the_mitsuhiko wrote: post #13

creeble wrote: post #12

What's the difference between a SPAC and what used to be called a "reverse merger"? I.e., when a smaller (but publicly traded) company, merges with a larger private company. These used to be pretty common scammy ways to generate capital, usually through pump and dumps. Same thing, just new acronym?

> What's the difference between a SPAC and what used to be called a "reverse merger"? A SPAC is created for the designated purpose to become a vehicle to take another company public. In a traditional reverse merger situation both companies are engaged in some regular business activity.

You make a SPAC sound even shadier than a reverse merger.