The median return of 2022's SPAC mergers: -82% • Hacker News Board

Re: The median return of 2022's SPAC mergers: -82%

#131

Post by epgui » Thu, Aug 24, 2023, 8:48 PM UTC

iancmceachern wrote: post #90

throwawaymaths wrote: post #85

Earlier quoted context omitted.

I lot of legitimate businesses fall into that category. Also illegitimate businesss. Theranos was definitely illegitimate (and had the characteristic of little fish investors trying to sell to bigger fish), but it would be a pretty severe category error to call it a ponzi scheme.

I dont agree, many others consider what she did no different than a ponzi scheme. It's not just me and the patent commenter: "Holmes duped just about everyone about the efficacy of Edison. For 12 years, she essentially ran a Ponzi scheme by attracting millions of dollars from primarily venture capitalists that saw it as a unique opportunity to cash in on the boom in Silicon Valley." https://www.ethicssage.com/2022/01…

> many others consider what she did no different than a ponzi scheme

I can interpret this in many different ways. Maybe they mean "no different than" in the sense of "no better than", ie.: as a moral or value judgment.

But if I interpret the words literally, then these people are just wrong. Theranos was a terrible waste of capital, and there was plenty of fraud involved, but it was not a Ponzi.

Re: The median return of 2022's SPAC mergers: -82%

#132

Post by quickthrower2 » Thu, Aug 24, 2023, 10:28 PM UTC

affinepplan wrote: post #121

quickthrower2 wrote: post #45

Earlier quoted context omitted.

Sure. What I mean is there is only so much space in a headline. Give one stat to report the success, the weighted mean is best. It represents the laymens idea if what did I get out if I put $1 across all of it. Imagine a headline about the median SPY company growth in 2022. That number isn’t how much the SPY went up.

> That number isn’t how much the SPY went up neither is the return from putting $1 across all of SPY

Unless you mean I omitted the technicalities of re-balancing, it is:

https://www.investopedia.com/ask/answers/05/sp500calculation...

Re: The median return of 2022's SPAC mergers: -82%

#133

Post by Fatnino » Fri, Aug 25, 2023, 8:34 AM UTC

bko wrote: post #58

Ozzie_osman wrote: post #41

Earlier quoted context omitted.

The interesting thing is a few years ago (before becoming the "SPAC King") he did a media tour where he criticized Venture Capital as being a "massive Ponzi scheme". [1] Then he went all-in on SPACs... Which ended up being the ultimate Ponzi. [1] https://www.cnbc.com/2018/10/10/start-up-economy-is-a-ponzi-...

How are SPACs a ponzi? My understanding is that its a pool of money that gets raised to essentially take a private organization public through a merger with (theoretically) less red tape and cost. You buy into the SPAC without knowing exactly what is being bought but at the time of purchase you have the option to redeem you investment. There are other clauses if the organizer can't find a suitable takeover target. Yo…

So theres some small startup that seems maybe interesting, you're looking forward to investing when they go public.

Suddenly you hear they are going public through a SPAC. Why? Why aren't they going through the usual channels, crossing their eyes and dotting their tees? Laying everything out on the table so everyone can feel confident?

The very fact they are going for this SPAC backdoor is a HUGE red flag.

Re: The median return of 2022's SPAC mergers: -82%

#134

Post by fsckboy » Sat, Aug 26, 2023, 3:31 AM UTC

ethbr1 wrote: post #116

fsckboy wrote: post #99

Earlier quoted context omitted.

um, lemon markets don't get fixed by simple regulation. A seller has a motivation to sell which the buyer doesn't have direct access to: "I'm moving, need to sell my car"; "I get a new car every year, sell my old one"; "this car has tons of problems". The buyer's motivation is clear, "I want a good car for the price". Since the market is a mix of lemon cars and good cars, the prices are somewhere in between. If the p…

Lemon markets can be fixed by regulation, because regulation effectively sets a floor to cheating. And it's cheating (or buyer perception of cheating) that increases the discount the lemon market takes to true value, which leads to lemons dominating non-lemons in that market. The more you can do to keep lemons out of a market via regulation, the less of a discount the buyer will demand relative to true value.

I would like to not that you didn't suggest any regulations, you just professed faith in them.

you can't have a law that people can't sell property, it's what property is, that which's ownership can be transferred. People with lemons always want to sell them, they are always in the market, always bringing prices down. You cannot create a perfect information marketplace through regulation, though you can improve it, for example major insurance incidents.