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A Sober Look at SPACs (2020)

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Re: A Sober Look at SPACs (2020)

#21

Post by lupire »

optimiz3 wrote: post #15
woah wrote: post #10

Earlier quoted context omitted.

Chamath first came to my attention last week when he introduced his run for California governor by promising to give everyone free money and cut taxes to zero. He then bought into GameStop stock, pumped it, and sold at the top while many gullible fools lost their life savings. What a shady dude.

Chamath sold GME the day after the purchase and donated the proceeds. The purchase was announced on Twitter after soliciting a community investment idea. The sale was announced the following day on CNBC. Shady it was not, and I don't know how much more transparency you could want here.

He dumped the stock before the supposed short squeeze that was the alleged reason for the price runup.

Re: A Sober Look at SPACs (2020)

#23

Post by laughingman2 »

WanderPanda wrote: post #16
paulgb wrote: post #12

Earlier quoted context omitted.

He also fanned the flames of outrage at Robinhood over PFOF, while SPACing a competitor who does the same things he critisizes Robinhood for.[1] Probably not illegal, but leaves a bad taste. I get the surface-level appeal of this guy's narrative (especially his CNBC appearences), but I don't get the idolatry towards him. He's not some sort of people's hero, he's just another rich guy who sometimes has cathartic rants…

From my observations I think he has the gift of being utterly convincing in the way he speaks while also having a good track record. But only after listening a lot to him I started noticing, that the points he conveys of being the definitive true answer to something start contradicting other things he said earlier.

His narrative pushing feels nefarious to me. I think he is using his new tech podcast (all-in) as a new platform to build a image of a pragmatic do-gooder billionare (to whomever who would buy that shtick), spin a new narrative and test out few ideas like (remove capital gains tax, he running for governorship) for approval.

If GME debacle taught us (again?) anything, it's that markets are moved by narratives. And those raccoons who control the narrative can move the market towards their favour.

Great post on epsilon theory on this https://www.epsilontheory.com/hunger-games/

Re: A Sober Look at SPACs (2020)

#24

Post by DebtDeflation »

goat_whisperer wrote: post #14

I didn't know a great deal about SPACs, but it looks like the real winners are the initial Sponsors and IPO investors, while the losers are the suckers who pay shares after the SPAC merges with the target company. Let's examine how convoluted the SPAC process is. First, a SPAC raises money through an IPO that it will use to merge with a target company. Then, when the SPAC finds a target and proposes a merger, many of…

>As a rule of thumb, the more convoluted things get in finance, the more nefarious the intentions

Many years ago, the quote I heard went something like, "There are only 3 real asset classes: Equities, Fixed Income, and instruments designed to make money for Wall Street. Colloquially known as Stocks, Bonds, and Bullshit."

Re: A Sober Look at SPACs (2020)

#25

Post by _jal »

lupire wrote: post #18
WanderPanda wrote: post #16

Earlier quoted context omitted.

From my observations I think he has the gift of being utterly convincing in the way he speaks while also having a good track record. But only after listening a lot to him I started noticing, that the points he conveys of being the definitive true answer to something start contradicting other things he said earlier.

His track record is for making money, which isn't obviously good for anyone else

There is a category of person for whom wealth is social proof of being worth listening to. Doesn't matter how they got it, this type of person is simply attracted to wealth.

Re: A Sober Look at SPACs (2020)

#26

Post by boh »

goat_whisperer wrote: post #14

I didn't know a great deal about SPACs, but it looks like the real winners are the initial Sponsors and IPO investors, while the losers are the suckers who pay shares after the SPAC merges with the target company. Let's examine how convoluted the SPAC process is. First, a SPAC raises money through an IPO that it will use to merge with a target company. Then, when the SPAC finds a target and proposes a merger, many of…

One of the worst aspects of a SPAC is that it's essentially a grab-bag purchase since even once you know the company being bought, you still don't initially know whether it's a good investment. This is true even if you're somewhat familiar with the business. 23andMe for instance, is currently SPACing, and though you might've heard about the company before, it's still unclear how profitable it really is or how much growth we should expect from it.

S-1s really matter. WeWork is a perfect example of a seemingly successful company that was forced to reveal its failings before hitting the public market. If it SPACed instead, many investors would've likely bought it due to name recognition and found their money was now tied to a failing business model.

To be fair, the typical IPO process doesn't have too much to admire either. It ironically leaves the public out of the actual initial offering, walling off much of the initial growth of the share price (unless it’s a super-star stock which balloons once it hits the public market--which they rarely are). More companies doing direct sales is a welcome change.

Re: A Sober Look at SPACs (2020)

#27

Post by mnadkvlb »

DebtDeflation wrote: post #24
goat_whisperer wrote: post #14

I didn't know a great deal about SPACs, but it looks like the real winners are the initial Sponsors and IPO investors, while the losers are the suckers who pay shares after the SPAC merges with the target company. Let's examine how convoluted the SPAC process is. First, a SPAC raises money through an IPO that it will use to merge with a target company. Then, when the SPAC finds a target and proposes a merger, many of…

>As a rule of thumb, the more convoluted things get in finance, the more nefarious the intentions Many years ago, the quote I heard went something like, "There are only 3 real asset classes: Equities, Fixed Income, and instruments designed to make money for Wall Street. Colloquially known as Stocks, Bonds, and Bullshit."

Such an underrated comment !! +1

Re: A Sober Look at SPACs (2020)

#28

Post by _ea1k »

boh wrote: post #26
goat_whisperer wrote: post #14

I didn't know a great deal about SPACs, but it looks like the real winners are the initial Sponsors and IPO investors, while the losers are the suckers who pay shares after the SPAC merges with the target company. Let's examine how convoluted the SPAC process is. First, a SPAC raises money through an IPO that it will use to merge with a target company. Then, when the SPAC finds a target and proposes a merger, many of…

One of the worst aspects of a SPAC is that it's essentially a grab-bag purchase since even once you know the company being bought, you still don't initially know whether it's a good investment. This is true even if you're somewhat familiar with the business. 23andMe for instance, is currently SPACing, and though you might've heard about the company before, it's still unclear how profitable it really is or how much gr…

> One of the worst aspects of a SPAC is that it's essentially a grab-bag purchase since even once you know the company being bought, you still don't initially know whether it's a good investment.

Yeah, and you also don't really know if it will go through. What happens when a SPAC claims to be merging with the company but the deal never materializes?

It feels like a weird system of gambling instead of investing in that sense.

Re: A Sober Look at SPACs (2020)

#30

Post by thefreeman »

rantwasp wrote: post #20
paxys wrote: post #7

I cannot believe this game hasn't been shut down by the SEC yet.

hahahah. yes, SEC needs to shut this down. it’s right on their list after punishing hedge funds for shortselling shares that don’t exist. /s

cmon man. it's been explained countless times how short interest could be over 100% without anyone short selling shares that don't exist. if you still don't understand it you are essentially hiding your head in the sand to try to deny reality.
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