VGAC is currently trading down ~10% > https://finance.yahoo.com/quote/VGAC/
Thanks for the tip! Just bought some. Does this mean I own some 23andme now? I'm a bit ignorant of how SPACs work.
Who cares, the stock went up!
23andMe to merge with VG Acquisition Corp. to become publicly-traded company
81–90 of 181 posts
Re: 23andMe to merge with VG Acquisition Corp. to become publicly-traded company
#82Earlier quoted context omitted.
I wouldn't consider it a hole in the rules, it's more of an alternative listing method. In my view, nothing materially changes. If 23andMe is a turd then an IPO through Goldman or JPMorgan isn't going to really change that, and neither will an SPAC. Although it's a little bit "gambling" because you don't know what the SPAC acquisition will be ahead of time, I think the SPAC vehicle is great for retail investors. If y…
What? At least as described above, the material requirements for disclosures changes. Is the description above wrong or do you not find disclosures to public market investors to be material?
I don't think they're material. The IPO prospectus for companies is a sales pitch with a bunch of legal "we may never make money" comments. If you commit fraud you'll wind up in court, disclosures or otherwise. Oh and nobody reads any of these documents, let alone any quarterly numbers.
I think SPACs are certainly a more risky way to put your money to work, but they're fine.
Companies that don't make money, have never made money, and to my eyes have absolutely no path to profitability IPO too - the banks just like to collect fees to get you to the public market. Does it really matter if they do it through an SPAC? I don't think it does.
Re: 23andMe to merge with VG Acquisition Corp. to become publicly-traded company
#83Earlier quoted context omitted.
There's a weird push and pull on Hacker News where if a company does something unethical it's: "Well what did you expect, they have an obligation to maximize shareholder value", but at the same time founder and CEOs are often venerated as hard-working, almost selfless individuals who dedicated their lives to make the world a better place in spite of their own self-interest. It's pretty jarring.
Try not thinking of Hackernews, or any forum on the internet, as a single entity, but as many individuals. Some of them have conflicting views with the others. Averaging the thoughts of a diverse group will just end up as white noise.
Do you not believe in culture?
Re: 23andMe to merge with VG Acquisition Corp. to become publicly-traded company
#84Earlier quoted context omitted.
I've seen it correctly predicted a few times in investing subreddits.
This is what I want to read. I know WSB banned SPACs. Did you see it on /r/investing? SeekingAlpha has a lot of writeups on SPACs, but I don't think they're as savvy as Reddit. Totally a mixed bag.
It's pretty hard to predict when a SPAC will merge, that's basically what your risk is: the time value of your money. However if you're buying at NAV, there's almost no downside risk other than that.
Re: 23andMe to merge with VG Acquisition Corp. to become publicly-traded company
#85Earlier quoted context omitted.
Thanks! It does explain why the stock price is low. I do have some problems with 23andme (and I've sent Anne a few emails about things over the years about a few simple things that they still haven't corrected, which is a bit worrisome), but that being said, who else comes close to doing what they do? I invested a lot in FitBit (lost a lot), but also Garmin and AAPL and MSFT (I just liked the wearable sector). Simila…
I don't know the space well, but I have been in a position to have purchased a few (IIRC at least 4) genetic tests used in clinical diagnoses. 23andMe was not a vendor that was used in any of those situations. Also, those tests cost a lot more than 23andMe's tests (this can be good if you are an investor). Even if you suspect something based on a 23&M test, your doctor will likely require confirmation from a clinical…
Yeah Lab Corp and all them work a lot on the supply side, but last mile consumer experience is awful. I think it's equally as hard to perfect that last mile consumer UX and distribution challenge, and probably more valuable long run (if you own the customer relationship, you have a lot of leverage to negotiate prices with vendors, and swap them out lego lego pieces, a la Apple).
Not to say that 23andMe will be the Apple of the space (and realistically Apple with Apple Health has a good shot at it), but I definitely don't think anyone wasting time with the B2B businesses will be the big gorilla in 10 - 20 years, and instead it will be a consumer facing company like 23andMe or someone.
Re: 23andMe to merge with VG Acquisition Corp. to become publicly-traded company
#86Re: 23andMe to merge with VG Acquisition Corp. to become publicly-traded company
#87Earlier quoted context omitted.
The company gets to go public without having to immediately provide all the materials for due diligence for public investors. The companies shares get peddled to the general public and the SPAC investors and the company both win. The public is left holding the bag.
Wow that seems like the kind of behaviour you'd see in a massive speculative bubble. People buying blank cheque companies without knowing what they're going to get.
If you don’t like what the SPAC is going to do then you can get your money back before it’s used in the acquisition.
Re: 23andMe to merge with VG Acquisition Corp. to become publicly-traded company
#88Earlier quoted context omitted.
Right now it kind of seems like every IPO does happen this way. There's kind of a SPAC mania going on. I can name at least 5 companies that are going public through SPACs, and two more that are rumored to be doing the same soon (Virgin Orbit and Lucid Motors).
What I mean is why don't traditional businesses IPO in this way? If it's a pain to do due dilly with a real business, why isn't this a back door?
SPAC acquisitions raise significantly less money for the target acquired company, so generally a target only goes the SPAC route if their financials aren't in good enough shape to go the traditional IPO route (offering, dutch auction, or otherwise).
Most SPAC acquisitions involve high-risk companies, for recent examples: Lucid (10 years on and still no actual product for sale), Nikola (fraud), 23andMe (its financials are reportedly not in great shape), Opendoor (huge portfolio of risky real properties), EVgo (history of massive losses), Clover Health (accusations of fraud, under DOJ investigation).
SoFi is the only company I can think of that is going the SPAC route that was potentially in the shape to IPO (their potential IPO was tenatively valued at $17 billion at the start of 2020, but the SPAC acquired them for around 8.65 billion). They apparently chose not to IPO because they wanted "deal certainty." However, leaving that much money on the table is a huge red flag for a financial company; it suggests that 2020 was a bad year for them and that they wanted to avoid disclosure, or that their financials are not in great shape.
Re: 23andMe to merge with VG Acquisition Corp. to become publicly-traded company
#89Earlier quoted context omitted.
Funny, I have her 2006 letter and there seems to be some inconsistencies: "As you all know, I'm rich enough from Google that I could just go kick it on a South Pacific Island. Instead though, I'm going to spend the next 15 years of my life grinding, taking flak of the press and internet trolls, so that I can set the record for helping the most people in the world learn there ancestry and pioneer mass genetic testing…
There's a weird push and pull on Hacker News where if a company does something unethical it's: "Well what did you expect, they have an obligation to maximize shareholder value", but at the same time founder and CEOs are often venerated as hard-working, almost selfless individuals who dedicated their lives to make the world a better place in spite of their own self-interest. It's pretty jarring.
It's indicative of the tradeoffs in any human endeavor and the shades of gray that come into play when evaluating those endeavors in moral terms. It can be both. Also, it's way easier to retire young if you have made a good amount of money and to live with a higher quality of life than a lot of CEOs who just have more property than they can do anything with. Being a quiet multimillionaire is great. Being a hardworking American Stakhanovite-CEO is, indeed, a lot of sacrifice for not a whole lot of real individual or familial gain. 23andme has done a lot of good and has accomplished a laudable mission, but there are also concerns that many people share about its activities or the potentially abusive things that could be done with the customer data.
Re: 23andMe to merge with VG Acquisition Corp. to become publicly-traded company
#90Earlier quoted context omitted.
The company gets to go public without having to immediately provide all the materials for due diligence for public investors. The companies shares get peddled to the general public and the SPAC investors and the company both win. The public is left holding the bag.
Don't forget skimping out on the fees and money left on the table when dealing with a traditional investment bank.
SPACs acquire targets for significantly less than the potential IPO price, and their are still fees and deal costs associated with the merger, so from the target's perspective, you still end up with less than you would with a traditional IPO even after the fees of a traditional investment bank.
So why would a company ever go the SPAC route? SPACs are all about avoiding the (financial) disclosure required for a company going public the traditional way, and if you take a look at the list of companies getting acquired by SPACs this year, every single one of them has a red flag that would make their IPO risky (see, e.g., We).