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Post by anitya on Feb 15, 2021 19:37:37 GMT
Just creating a thread for SPAC investing. Some folks wonder if they would not be richer if they had access to investing in pre-IPO hyper-growth companies and in special situations. So, let us discuss how to access these markets through SPACs and which SPACs folks in this forum are investing in.
As a starter, Yogi's Barron's summary from a couple of days ago included the following:
ETFs of SPACs, “wrappers” for “blank-check/shell” companies. 250 SPACs raised $83 billion in 2020, and 2021 is already half there. Indexed ETF SPAK has 40% in pre-merger-SPACs and 60% in post-merger/IPO companies. Active ETF SPCX is 100% in pre-merger SPACs, and active SPXZ has 33% in pre-merger SPACs and 67% in post-merger/IPO companies. SPAC holders get into related IPOs at IPO prices, just like big institutions, while retail customers have to buy IPOs in the secondary market."
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Post by Capital on Feb 16, 2021 15:52:23 GMT
finance.yahoo.com/video/spac-frenzy-tells-us-market-144047991.htmlInteresting discussion above. Of note - mentioned in the video SPACs have not performed as well as IPOs even though SPACs are a backdoor way to do an IPO. The entire concept just reminds me of the Pink Sheets traded Shell Companies I lost money on 20-25 years ago. Just an observation - not necessarily what is going on here. I do admit that purchasing these via the ETF route makes me feel better about the idea. I would opt for an actively managed ETF personally.
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Post by yogibearbull on Feb 16, 2021 16:01:19 GMT
Capital , difference today is that many SPACs are listed on exchanges. After the merger, they often take on the name of the company acquired and also may change the ticker. But you are correct, it is another way to go public today that doesn't require much scrutiny. 3 ways to go public today are the traditional IPO way, direct-listings [rules were recently relaxed so that these can also raise new money], and SPAC mergers.
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Post by Chahta on Feb 16, 2021 16:13:13 GMT
With the markets doing so well for so long, why would regular Joe invetors feel the need to invest that way. I suspect the SPACs are the ones making the big money.
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Post by Capital on Feb 17, 2021 17:00:56 GMT
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Post by Capital on Feb 17, 2021 18:01:48 GMT
yogibearbull what are you thoughts on how Creation Units will work for these ETFs. Potentionally significant portions of the portfolios will not be traded on markets.
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Post by yogibearbull on Feb 17, 2021 18:15:41 GMT
M* provides indicated IV for ETFs from which current premium/discount can be deduced. But M* doesn't provide IV for SPAK, SPCX, SPXZ.
One can use previous day's NAV [as is done for CEFs] but that is not ideal.
Basically, if creation/redemption processes for ETFs don't work well, or are disrupted, ETFs may trade at CEF like premium/discounts.
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Post by Capital on Feb 21, 2021 13:01:41 GMT
M* provides indicated IV for ETFs from which current premium/discount can be deduced. But M* doesn't provide IV for SPAK, SPCX, SPXZ. One can use previous day's NAV [as is done for CEFs] but that is not ideal. Basically, if creation/redemption processes for ETFs don't work well, or are disrupted, ETFs may trade at CEF like premium/discounts. I've had more time to dig into SPCX. The vast majority of its holdings, over 99%, are all trading on an exchange. It will be the trading companies that it holds that will be holding the yet to be listed companies. That should make the creation unit issue much more viable. Of course that makes the DD a bit more challenging since it owns over 70 positions - LOL. I think I will look at those postions exceeding 2% of the portfolio. That pares down the list to just 11 listed companies to review. The Advisor is actively managing this thing. I really want to know more about the Advisor. That will probably be more informational than the positions held by this EFT. Very little history to this EFT as it was formed in 12/2020. Edit to add - I looked at the top five holdings of SPCX and found it to be fruitless. You are buying the "come" in this segment and there is virtually no "was" at which to see. The four were mostly cash and expenses. The Advisor is Tuttle Tactical Management. They manage six ETFs. They use what they call Trend Aggregation in making investing and holding portfolios. Matthew Tuttle is the key person there. I did find a circa 40 minute interview of this gentleman on the internet by "Eventual Millionaire. I had never heard of "Eventual Millionaire" before today and have no idea of who they are; however, you can at least hear Matthew speak for most of 40 minutes. eventualmillionaire.com/millionaire-interview-matthew-tuttle-founder-and-chief-investment-officer-of-tuttle-wealth-management-llc-and-author-of-how-harvard-and-yale-beat-the-market/Books by Matthew Tuttle www.amazon.com/How-Harvard-Yale-Beat-Market-ebook/dp/B00245A4H8www.amazon.com/Financial-Secrets-Wealthy-Grandparents-Inspiring/dp/0595406319 |
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Post by javajoe on Feb 21, 2021 16:01:55 GMT
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Post by Capital on Feb 21, 2021 16:42:38 GMT
javajoe thanks for the article. It just seemed like the latest gimmick to me; but, for some reason I was interested. What was really telling was the last paragraph of the article: "Under the rules governing them, SPACs must identify firms they can merge with within 24 months after they have raised their funds or they will be wound up and the IPO proceeds returned to investors. More than 300 SPACs need to pull that off this year or risk being liquidated. But with only so many quality targets to go round, and SPAC founders’ strong incentive to close deals — even at the expense of shareholder value — SPACs may well end up in a negative spiral of poor quality/bad press/tighter regulation. And we know how that ended for reverse mergers" I think I will reinvest my dividends from where the came from for the time being. I lost enough money on the reverse merger gimmick of the 2000-2005 era to last for a lifetime.
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Post by Capital on Sept 28, 2021 14:30:48 GMT
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Post by mrbilbobaggins on Oct 2, 2021 20:21:59 GMT
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