Yahoo Finance’s Brian Cheung explains why SPACs are increasing in popularity.
#SPACS #blankcheck #IPO
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This is awesome!!!!!
It would be nice if this were more technical. Understanding the warrants and legal implications of SPAC vs. IPO would be more useful.
Yeah this is a little less detailed than it should be for a 7 min video.
As someone who was looking for ‘SPAC explained’ this was exactly what I needed. Although yes, 4 min would have been fine
So couple of questions.
Investors of a SPAC buy it’s shares at what valuation. The book value? But it’s an empty company at this point.
Doesn’t the SPAC have to pass some sort of scrutiny by the exchange before going public even though it doesn’t have any business?
Are the SPAC creators banking on the fact that the general public will not buy the SPAC and it will be taken up the investors who are looking to buy into the target company ipo?
Very helpful. Tx very much
Thanks – very helpful
Thank you. Good lesson
with SPACs you have to do your homework on the people running them then make a decision
SOOOO TRUE! Investors quite literally don’t know what private company the SPAC is taking public so you have to really believe in the management.
excellent video – these knowledge shares are great, i particularly like how they are kept under 15 mins
I have bought some HCAC, my share price is $11. Currently the market cap of HCAC is 500 M. But when we merge with CNOO the market cap will be 2,5 – 3 B. I would like to know what is going happen to my $11 share price in the moment we merge? I have a hard time understanding this aspect of SPAC. I mean going from a 500 M market cap to a 3 B market cap, must do something to the stock price, right? So I am not talking about the fluctuations of share price. Only what will happen to the SPAC share price when it merges with another company? I don’t think you talked about that in the video?
I have the same questions.
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As a retail investor, you are free to sell your shares when you want. When canoo becomes a public company, it will either go up based on speculation as more retail investors rush in from the media circuit (like NKLA). This will drive the 11/share price up. Or it can go below 11 dollars as investors sell off their shares maybe because they don’t see a future in Canoo. The company’s evaluation has nothing to do with your 11 dollars, take a look at some of these tech stocks (Snow has a 100:1 price to sales ratio which is crazy overpriced and it doesn’t even make a profit). I think you’re confusing market cap with evaluation (or I am) At this point you simply own parts of a public company and you must decide whether canoo has potential. Consider yourself lucky if you can hit 2-4x initial buy-in. Spacs are hot righr now because of the speculative nature of the tradition market (exhibit a: TSLA). Not my strategy but if many spac retail investors sell half their positions at merger and keep the other half IF IF IF you believe in the company. Otherwise take your earnings and look into other spacs. Do your due diligence on both the spac and partner company. Canoo has a great team from the BMW EV side and a future huyndai partnership. However like any companies that hasn’t made a product or profit it’s all very speculative and risky. You just don’t know if investors will see a future in Canoo or not. Personally, I think EV (chargepoint, canoo, workhorse (not a spac)) and online gambling (dkings, gold nugget) will do ok past Christmas if the market doesn’t adjust significantly. Also speculation is at an all time high so if the trends keep up and spacs pick some good targets, investors will stand to profit. Good luck.
It’s essentially a reverse merger and the concept has been around forever. The only difference is that the SPAC is newly public. Traditional reverse mergers involve existing public companies that have been dormant, empty shells.
Does it seem conceptually similar to mutual funds or private equity?
Never heard of it.
Great explanation! Thank you.
Thank you! Very informative demo and so simply explained!
i don’t trust anyone that made 9 kajillioin in fees
What’s the difference between THIS and a hedge fund or private equity firm or VC? They all do this same thing.
So Chamath Palihapitya’s SPACS are all based on the average investor trusting him and his track record.
Yup.
Sounds like a great new way to 割韭菜! Play the naive investors for a sucker.
Why would the business owner – Cheung’s shoe go through the SPAC process and not the traditional IPO if he really believed in his own business? If you’re getting less for your idea, why would Cheung’s shoe accept the SPAC deal ? Can’t imagine Bezos at the start of Amazon going through a SPAC…which to me tells me most of the business ideas aren’t good enough for the traditional IPO route. What am I missing?
MUST TRUST MANAGEMENT! I can’t emphasize this enough. When investing in a SPAC, investors have to believe in the management team.