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A Sober Look at SPACs (2020)

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Re: A Sober Look at SPACs (2020)

#61

Post by babyshake »

HNfriend234 wrote: post #52

I invest in SPACs regularly and have made a killing off investing in them. Plain and simple, SPACs are all about hype in terms of how much hype the target company can garner. I only buy pre-LOI SPACs and then consider selling them on the merger announcement or right before the merger completes. This strategy works because of social media. People go around social media to hype up the company so to a certain extent it…

Is there a good place to get a feed/alert/calendar on LOIs, announcements and merger completion without a bunch of other noise?

Re: A Sober Look at SPACs (2020)

#62

Post by hattmall »

whymsicalburito wrote: post #58
HNfriend234 wrote: post #52

I invest in SPACs regularly and have made a killing off investing in them. Plain and simple, SPACs are all about hype in terms of how much hype the target company can garner. I only buy pre-LOI SPACs and then consider selling them on the merger announcement or right before the merger completes. This strategy works because of social media. People go around social media to hype up the company so to a certain extent it…

Do you have any tips on good screeners or places to find these SPACs? I've never invested in them yet and don't know too much about them. Are they traded just like regular stocks?

Spachero.com

I look for them close to NAV don't like buying much out from there. The current best opportunities I see are, FPAC, TWCT, AACQ. They are priced well and should move when rumours come out. If you want one a little bit riskier but with a potentially sooner payoff, FUSE, rumoured to merge with Money Lion.

If your into options, SPACs with options create some great opportunities for Call Debit Spreads instead of having to buy commons and front the $10 redemption value.

There's also warrants which have more risk. FPAC+ and TWCTW are in my mind the best current warrants.

There is also Units! The best unit play right now I see is COOLU, its due to split soon and you will get one common and 1/3 of a warrant per unit, so buy in multiples of 3.

All of the tickers I mentioned are tech focused and backed by VC firms with a history of successful tech companies and SPACs.

There are a lot of garbage SPACs so you have to be careful.

Overall, your number one source for information should be SEC filings on Edgar. Read the documents there, research the management team, learn what the target payouts are and see who else is buying in.

SPACs are great and should last through the fall, the exchanges are looking at making direct listing much easier though and that will kill SPACs and probably be the move the pops the bubble.

The good thing about SPACs is that you have a focused management team of seasoned investors and you are investing with them and have the redemption price of $10 typically if there is a problem.

Re: A Sober Look at SPACs (2020)

#63

Post by hattmall »

dasm wrote: post #57
HNfriend234 wrote: post #52

I invest in SPACs regularly and have made a killing off investing in them. Plain and simple, SPACs are all about hype in terms of how much hype the target company can garner. I only buy pre-LOI SPACs and then consider selling them on the merger announcement or right before the merger completes. This strategy works because of social media. People go around social media to hype up the company so to a certain extent it…

Effective strategy. It seems your edge comes from 1. learning about SPACs early and 2. identifying which ones will be successful. How do you get #1?

Look at the IPO calendar. Most IPOs are SPACs.

Re: A Sober Look at SPACs (2020)

#64

Post by [deleted] »

HNfriend234 wrote: post #52

I invest in SPACs regularly and have made a killing off investing in them. Plain and simple, SPACs are all about hype in terms of how much hype the target company can garner. I only buy pre-LOI SPACs and then consider selling them on the merger announcement or right before the merger completes. This strategy works because of social media. People go around social media to hype up the company so to a certain extent it…

[deleted]

Re: A Sober Look at SPACs (2020)

#65

Post by optimiz3 »

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

A track record for making money is usually one of the first things people consider when evaluating who to invest along side of.

Re: A Sober Look at SPACs (2020)

#66

Post by vasco »

dontreact wrote: post #56
HNfriend234 wrote: post #52

I invest in SPACs regularly and have made a killing off investing in them. Plain and simple, SPACs are all about hype in terms of how much hype the target company can garner. I only buy pre-LOI SPACs and then consider selling them on the merger announcement or right before the merger completes. This strategy works because of social media. People go around social media to hype up the company so to a certain extent it…

Dumb question: how do you decide which SPACs to buy if it's before the LOI and you can't figure out what company they will be hyping?

Not OP but have researched a few. If you're following the hype train as OP suggests, management team is really the only thing you have going for you. SPACs have specific rules about what they can disclose, so they won't be able to tell you in advance which company they'll have as a target. Usually it boils down to the industries the management team has worked in before as well as previous SPACs they may have ran successfully till merger.

Re: A Sober Look at SPACs (2020)

#67

Post by [deleted] »

dasm wrote: post #59
ashika wrote: post #54

Earlier quoted context omitted.

>but no one cares about that long-term indeed. and i congratulate you on your recent success in predicting the tastes of others who buy equities based on speculative price action. spac management likely makes their decisions largely focused on share price, which i suppose as an equity investor would feel like they have your back. but when you consider the role equity is meant to play in corporate finance, you would c…

It seems you are implying that this sort of arrangement is fundamentally unhealthy for a market focused on accurate price discovery, and I think that's trivially true. Some investing incentives are aligned with accurate price discovery, some are not (warren buffet vs a pump and dump).

[deleted]

Re: A Sober Look at SPACs (2020)

#68

Post by jtdev »

mikeyouse wrote: post #53
jtdev wrote: post #38

Earlier quoted context omitted.

I'd love to see where this has been explained. I've not seen this anywhere.

One such example: https://www.fool.com/investing/2021/01/28/yes-a-stock-can-ha... > As an example, take a situation involving four investors. Annie owns shares of GameStop, and Annie and her broker have an agreement that allows the broker to lend Annie's shares to short-sellers. It lends them to Bob, who subsequently sells those borrowed shares short in hopes that GameStop's share price will fall. > An investor named…

Okay, but this still seems like a perversion of market mechanics that should be regulated/banned.

Re: A Sober Look at SPACs (2020)

#69

Post by ashika »

dasm wrote: post #59
ashika wrote: post #54

Earlier quoted context omitted.

>but no one cares about that long-term indeed. and i congratulate you on your recent success in predicting the tastes of others who buy equities based on speculative price action. spac management likely makes their decisions largely focused on share price, which i suppose as an equity investor would feel like they have your back. but when you consider the role equity is meant to play in corporate finance, you would c…

It seems you are implying that this sort of arrangement is fundamentally unhealthy for a market focused on accurate price discovery, and I think that's trivially true. Some investing incentives are aligned with accurate price discovery, some are not (warren buffet vs a pump and dump).

and dont get me wrong, i am glad all types exist and meet in the market.

what i am implying above is that i view a management team that makes decisions based on share price as about as delusional as one that drinks its own urine for power ahead of important meetings.

Re: A Sober Look at SPACs (2020)

#70

Post by stevievee »

HNfriend234 wrote: post #52

I invest in SPACs regularly and have made a killing off investing in them. Plain and simple, SPACs are all about hype in terms of how much hype the target company can garner. I only buy pre-LOI SPACs and then consider selling them on the merger announcement or right before the merger completes. This strategy works because of social media. People go around social media to hype up the company so to a certain extent it…

This has been my investing thesis on SPACs as well. While it may be obvious to most investors, comments like this that share the idea will make it harder for me to get in early. Selfish, I know.
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