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Ask HN: Sue after poorly managed SPAC?

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Re: Ask HN: Sue after poorly managed SPAC?

#41

Post by kolbe »

ianbutler wrote: post #9

I’m sorry you were hurt by this. SPACs in general are toxic, the vast majority are down from their listing price after 6months. A business going through a spac generally isn’t strong enough to go through the normal IPO process and the SEC has agreed that they’re generally poor for everyone but the bank and investors pushing it and have already started regulating them.

How exactly was he hurt? He worked for a low valued company that was briefly viewed as valuable. It returned to its real value shortly thereafter. He had the same net worth he had had a month before. He just wants a piece of the SPAC scam money. And I encourage him to go get some of the pie for himself, but he isn't a victim.

Re: Ask HN: Sue after poorly managed SPAC?

#42

Post by spac_throwawayy »

kolbe wrote: post #41
ianbutler wrote: post #9

I’m sorry you were hurt by this. SPACs in general are toxic, the vast majority are down from their listing price after 6months. A business going through a spac generally isn’t strong enough to go through the normal IPO process and the SEC has agreed that they’re generally poor for everyone but the bank and investors pushing it and have already started regulating them.

How exactly was he hurt? He worked for a low valued company that was briefly viewed as valuable. It returned to its real value shortly thereafter. He had the same net worth he had had a month before. He just wants a piece of the SPAC scam money. And I encourage him to go get some of the pie for himself, but he isn't a victim.

Okay with you if your brokerage stops you from selling when your stocks are up?

Re: Ask HN: Sue after poorly managed SPAC?

#44

Post by nowherebeen »

spac_throwawayy wrote: post #21
nowherebeen wrote: post #10

Earlier quoted context omitted.

Not necessary. You need to talk to a lawyer. No one here can give you legal advice.

It’s a pretty niche area of law from what I can tell. Most lawyers familiar with SPACs just set them up (already a relatively small area). Most securities lawyers familiar with similar suits don’t have SPAC experience. I’d welcome any leads on lawyers. The independent lawyers I’ve talked to say something like “sounds like you could sue, but I’m not familiar with that area of law.”

Then it becomes a question who has more money because they will do everything in their power to drag this on. I think you know the answer to this.

Re: Ask HN: Sue after poorly managed SPAC?

#45

Post by heliodor »

kolbe wrote: post #41
ianbutler wrote: post #9

I’m sorry you were hurt by this. SPACs in general are toxic, the vast majority are down from their listing price after 6months. A business going through a spac generally isn’t strong enough to go through the normal IPO process and the SEC has agreed that they’re generally poor for everyone but the bank and investors pushing it and have already started regulating them.

How exactly was he hurt? He worked for a low valued company that was briefly viewed as valuable. It returned to its real value shortly thereafter. He had the same net worth he had had a month before. He just wants a piece of the SPAC scam money. And I encourage him to go get some of the pie for himself, but he isn't a victim.

He was legally hurt. You're talking about morals.

Re: Ask HN: Sue after poorly managed SPAC?

#46

Post by compsciphd »

Not as a criticism of the OP, but assuming there's no lockup, wouldn't it make sense to buy put / sell "covered" call options as "insurance" on the price. Of course that comes with a premium, but I wonder what it would have been at the "opening" price.

Re: Ask HN: Sue after poorly managed SPAC?

#47

Post by spac_throwawayy »

compsciphd wrote: post #46

Not as a criticism of the OP, but assuming there's no lockup, wouldn't it make sense to buy put / sell "covered" call options as "insurance" on the price. Of course that comes with a premium, but I wonder what it would have been at the "opening" price.

I tried but couldn’t find options that early. Working with large brokerages and they said options wouldn’t be available for weeks or months. Not sure if that’s always the case or if the stock was just too small.

Re: Ask HN: Sue after poorly managed SPAC?

#48

Post by filoleg »

spac_throwawayy wrote: post #47
compsciphd wrote: post #46

Not as a criticism of the OP, but assuming there's no lockup, wouldn't it make sense to buy put / sell "covered" call options as "insurance" on the price. Of course that comes with a premium, but I wonder what it would have been at the "opening" price.

I tried but couldn’t find options that early. Working with large brokerages and they said options wouldn’t be available for weeks or months. Not sure if that’s always the case or if the stock was just too small.

That's fairly common, yeah. There is a list of hard rules and requirements for when options become available after the IPO, and it is very variable.

From a personal observation, I've noticed that for most IPOs i was looking at over the past few years, options became availavle only at least after a few weeks since the IPO date. Some took even longer.

Re: Ask HN: Sue after poorly managed SPAC?

#49

Post by kolbe »

spac_throwawayy wrote: post #42
kolbe wrote: post #41

Earlier quoted context omitted.

How exactly was he hurt? He worked for a low valued company that was briefly viewed as valuable. It returned to its real value shortly thereafter. He had the same net worth he had had a month before. He just wants a piece of the SPAC scam money. And I encourage him to go get some of the pie for himself, but he isn't a victim.

Okay with you if your brokerage stops you from selling when your stocks are up?

That has happened to me literally hundreds of times in my life. The real difference is my stocks aren't SPAC scams, so I'm not playing some pump and dump game needing to sell at the perfect moment, and then crying foul when a scam within a scam didn't go my way.

edit: I'm posting too fast. So my reply is here.

You didn't orchestrate the game. I get it. But your moral compass is clear when your first instinct is to try to recoup money stolen from SPAC investors for yourself, rather than for the retail investors who were actually harmed by it. You in no way were harmed--you had a couple hundred grand in stock before the IPO, and a couple hundred grand now. You're just mad that executives and Hedge Funds got to scam people and not you. That said, I wholeheartedly endorse you going after them. But go after them like a wolf, not a sheep.

Re: Ask HN: Sue after poorly managed SPAC?

#50

Post by kolbe »

heliodor wrote: post #45
kolbe wrote: post #41

Earlier quoted context omitted.

How exactly was he hurt? He worked for a low valued company that was briefly viewed as valuable. It returned to its real value shortly thereafter. He had the same net worth he had had a month before. He just wants a piece of the SPAC scam money. And I encourage him to go get some of the pie for himself, but he isn't a victim.

He was legally hurt. You're talking about morals.

I don't think the phrase "I'm sorry you were hurt" is appropriate for people who weren't morally hurt. "I'm sorry you were hurt" is appropriate for the retail investors who were bilked out of their saving by his company.
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