Could giant SPACs be next? • Hacker News Board

Re: Could giant SPACs be next?

#31

Post by stewbrew » Sun, Jan 24, 2021, 10:11 PM UTC

legym wrote: post #22

Been trading SPAC's recently. Seeing a huge influx of SPACs in renewable energy. Jump in at the beginning and the most you can lost is 10$ if the SPAC fails. When it receives a letter of intent(LOI) you'll see a big boost to the stock price. When the definitive agreement (DA) is announce there is another 20% jump. After the merge and symbol change, the price drops and then slowly comes up. With so many coming out, ju…

I think this is a rather oversimplified view of SPACs. Matt Levine recently wrote a nice piece about the magic of SPACs. Here is a paper he cites: https://corpgov.law.harvard.edu/2020/11/19/a-sober-look-at-s...

Re: Could giant SPACs be next?

#32

Post by emteycz » Sun, Jan 24, 2021, 10:14 PM UTC

Judgmentality wrote: post #20

the_mitsuhiko wrote: post #13

Earlier quoted context omitted.

> 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.

To me it sounds like all cards are on the table, as opposed to reverse mergers.

Re: Could giant SPACs be next?

#33

Post by [deleted] » Sun, Jan 24, 2021, 10:20 PM UTC

toomuchtodo wrote: post #26

nibsfive wrote: post #25

Earlier quoted context omitted.

It's more an indication of how (irrationally) intent companies are on staying private well into their days as a global empire.

Why is it irrational to stay private? Going public constrains you with oversight and public shareholder demands. If you can get access to capital without public shareholders, you absolutely should.

[deleted]

Re: Could giant SPACs be next?

#34

Post by totalZero » Sun, Jan 24, 2021, 10:26 PM UTC

silexia wrote: post #30

legym wrote: post #24

Earlier quoted context omitted.

I've been following other boards, but saw this website floating around. Many of them have active excel sheets monitoring which ones have announced https://spactrack.net

A SPAC has no actual competitive edge in the market. They are literally all hype. As long as the stock market goes up, you probably will make money. But be very careful as if the market turns down, I think these will turn out to be worthless.

To take the other side of this perspective:

The edge is twofold. First, it's a way to pool funding using an exchange rather than getting some bank to underwrite an IPO. Second, many of the people who run SPACs are famous investors who have a track record of success and have greater information and access than most investors.

Re: Could giant SPACs be next?

#35

Post by chris_j » Sun, Jan 24, 2021, 10:52 PM UTC

jfk13 wrote: post #15

hkt wrote: post #8

Earlier quoted context omitted.

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/???

The word was definitely used (and was understood to be offensive) when I was growing up - in Worcestershire in the 90s. I wonder if it's fallen out of use since then.

Re: Could giant SPACs be next?

#36

Post by Judgmentality » Sun, Jan 24, 2021, 11:02 PM UTC

toomuchtodo wrote: post #26

nibsfive wrote: post #25

Earlier quoted context omitted.

It's more an indication of how (irrationally) intent companies are on staying private well into their days as a global empire.

Why is it irrational to stay private? Going public constrains you with oversight and public shareholder demands. If you can get access to capital without public shareholders, you absolutely should.

It seems like the only rational reasons to IPO are out of necessity (you need to raise the money, your employees will quit without liquidation, etcetera), or short-term greed. What other reason would you want to be public?

Re: Could giant SPACs be next?

#37

Post by thesausageking » Sun, Jan 24, 2021, 11:06 PM UTC

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.

A combination of the Fed printing tons of money along with a lot of retail investors with extra cash and time on their hands.

Re: Could giant SPACs be next?

#38

Post by erik_seaberg » Sun, Jan 24, 2021, 11:16 PM UTC

I keep wondering what a minimum viable public company would look like with open-book accounting. How much of the SOX compliance burden is merely auditing that your public numbers are close enough to your secret numbers?

Re: Could giant SPACs be next?

#39

Post by gbolcer » Sun, Jan 24, 2021, 11:20 PM UTC

What's the old saying? If everything is "special" then nothing is.

Re: Could giant SPACs be next?

#40

Post by naruvimama » Sun, Jan 24, 2021, 11:30 PM UTC

If you do not want to hold your money in the bank.

Nor do you want to invest your money in artificially inflated stock.

Coming out of the pandemic we are going to see a monumental shift in lifestyle and economics. It is that crisis that replaces old guards with new champions.

SPACs had a bad reputation, but in the current circumstances seem pretty reasonable. I guess in terms of risk-benefits it is an intermediate between VC & established stocks (and we have seen how stable that has been in 2020 :) )