“To be fair, all of his SPACS are up since IPO”
IPOC which became CLOV isn't
> To be fair, all of his SPACS are up since IPO, except for the ones that aren't
SPAC Wipeout Is Punishing Followers of Chamath Palihapitiya
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Re: SPAC Wipeout Is Punishing Followers of Chamath Palihapitiya
#12Scammers have also made millions of dollars in Bitcoin with the twitter giveaway scam impersonating Chamath. The people who follow Chamath and other gurus tend to be 'professional morons'---people in professional lines of work who have a lot of disposable income and wealth but are also somewhat dim and easily swindled and persuaded by jargon. Think the pointy-hired boss from Dilbert. See also Putt's Law.
Re: SPAC Wipeout Is Punishing Followers of Chamath Palihapitiya
#13SPACs should be banned. They’re a vehicle for perpetuation of the market as a gambling platform, while undermining the transparency requirements of the market.
I don't think they should be banned , but I seriously don't understand how someone could invest in one. You don't know what it's going to acquire, so it's a bet that the leadership finds a good company at a good price that you'd be interested in owning. SPACs have nothing else going for them. That said, it sounds a lot like VCs who invest in the founder, not the company.
As I understand it, if you don’t like what the SPAC acquires you can demand your money back.
Re: SPAC Wipeout Is Punishing Followers of Chamath Palihapitiya
#14“To be fair, all of his SPACS are up since IPO”
That isn't a realistic representation.
SPACs usually start at $10 when formed, then shoot up at least 4x on announcements and hype, the early investors (i.e. people like Chamath) cash out at the peak, then the stock price tanks to $15. Technically the stock is "up" from the original listing price, but it's really just a big scam.
Re: SPAC Wipeout Is Punishing Followers of Chamath Palihapitiya
#15Earlier quoted context omitted.
I don't think they should be banned , but I seriously don't understand how someone could invest in one. You don't know what it's going to acquire, so it's a bet that the leadership finds a good company at a good price that you'd be interested in owning. SPACs have nothing else going for them. That said, it sounds a lot like VCs who invest in the founder, not the company.
As I understand it, if you don’t like what the SPAC acquires you can demand your money back.
Minus fees, obviously. They make money no matter what drivel they buy.
Re: SPAC Wipeout Is Punishing Followers of Chamath Palihapitiya
#16Chamath is one of the most self-serving-pretending-to-be-altruistic salesmen to ever set foot in SV. If you were still a “follower” after doing even the slightest bit of due diligence into the man, you deserve to lose money.
Definition of a snake oil salesman. Even great companies like SoFi that went public via one of his SPACs still end up screwing investors because of disadvantageous promote and PIPE. When the ticker change happens watch it drop and then wait for PIPE dump and it will drive it below IPO of the SPAC itself.
Re: SPAC Wipeout Is Punishing Followers of Chamath Palihapitiya
#17SPACs should be banned. They’re a vehicle for perpetuation of the market as a gambling platform, while undermining the transparency requirements of the market.
I don't think they should be banned , but I seriously don't understand how someone could invest in one. You don't know what it's going to acquire, so it's a bet that the leadership finds a good company at a good price that you'd be interested in owning. SPACs have nothing else going for them. That said, it sounds a lot like VCs who invest in the founder, not the company.
I would break SPACs currently in the market down into 2 categories; pre-DA and post-DA.
In other words, there are a number of SPACs which have already posted their target company, their financials, future projections, as well as other things like PIPE investors, % SPAC ownership etc. Most of these, due to the current climate, are trading at or slightly above NAV, therefore, they are akin to buying stock in any other company with a small downside if the deal does not materalise [1].
What you would be referring to in your example are pre-DA SPACs, in which you are correct as it relies on the sponsors prior performance and praying they will find a good target at an appetizing valuation. However, even here there is a small downside, since of the 430 SPACs searching for a target [1], the majority are trading at or below NAV with very few breaking this rule, which is why it is so lucrative for investors and arbitrage HFs.
For instance, if you do proper due diligence on a particular SPAC sponsor and have mild conviction on their ability to obtain a good target, chances are their SPAC is trading at or below NAV, therefore, it opens an opportunity to invest in something near risk-free. If a deal does not materalize, then you get $10 (or NAV) back, and if it is a good target you reap relatively good rewards. If it is a bad deal or you do not like the company, you have the ability to sell at or near the same price you bought (provided it was close to NAV), since very rarely in the window of post-DA to de-SPAC will the SPAC price fall below NAV. The only significant downside is opportunity cost since the core idea revolves around parking money and not utilizing until the sponsor announces a deal, and other investments even in index funds may have provided higher returns in that timeframe, which could be a good or a bad thing, especially in volatile markets.
Re: SPAC Wipeout Is Punishing Followers of Chamath Palihapitiya
#18SPACs should be banned. They’re a vehicle for perpetuation of the market as a gambling platform, while undermining the transparency requirements of the market.
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Re: SPAC Wipeout Is Punishing Followers of Chamath Palihapitiya
#19Earlier quoted context omitted.
As I understand it, if you don’t like what the SPAC acquires you can demand your money back.
Minus fees, obviously. They make money no matter what drivel they buy.
I don’t believe minus fees. The fees are generally the extra shares when it de-spacs. In fact for spacs that trade below nav they are like variable cash instruments.
Re: SPAC Wipeout Is Punishing Followers of Chamath Palihapitiya
#20Chamath is one of the most self-serving-pretending-to-be-altruistic salesmen to ever set foot in SV. If you were still a “follower” after doing even the slightest bit of due diligence into the man, you deserve to lose money.
Strongly agree. I listened to Chamath's talks for a couple hours. The impression one gets is a smart, charismatic and driven guy... Who uses every dishonest fake-populist rhetorical trick in the book.
I still think he's an interesting listen, but you've got to be thoughtful about it. Slippery dude.