One reason SPACs work is that Apple, Google, Amazon, Facebook, Berkshire Hathaway and (to a lesser extent) Microsoft are sitting on huge cash piles and not doing acquisitions. For almost a decade. So of course high quality mid-caps are going to be "cheap." So while I appreciate your appeal to stuff that isn't fundamentals, it seems like the imbalance between supply of midcaps and demand for acquiring them would be an opportunity.
Microsoft last bought LinkedIn - for $22b in cash and stock, that one acquisition is really expensive and definitely not “midcap.” NVIDIA got ARM for $12b cash, $21.5b stock. Also huge.
Facebook is really interesting in this regard because its multi billion acquisitions - Instagram, WhatsApp, Oculus - all had finance people saying they overpaid. Maybe they did overpay! In the sense that if those companies SPAC’d instead, the price the vehicle would pay would be lower - not in some subjective sense if those were or were not good acquisitions, they obviously were.
So if I had the opportunity to bid against Facebook for Instagram or against PayPal for Honey, I would! SPACs let me do that. The curious thing is that Facebook isn’t bidding on those companies anymore - Snap said no and TikTok isn’t possible - so... does that mean Instagram would have been cheaper? That would have been an amazing opportunity.
Otherwise we’re talking about smaller acquisitions. For example, Apple bought a lot of companies that probably chose acquisition because they would have been microcap IPOs and thus not tradable by Robinhood users - and maybe that’s really the flip side of this.
But I don't think this has anything to do with cash piles at large cap firms.
indeed. and i congratulate you on your recent success in predicting the tastes of others who buy equities based on speculative price action. spac management likely makes their decisions largely focused on share price, which i suppose as an equity investor would feel like they have your back. but when you consider the role equity is meant to play in corporate finance, you would concede that in an ideal world management would not pay attention to share price at all, they would be working on making the most money possible using the assets and equity they already had, and then either returning or reinvesting those profits. the equity markets will always have a chaotic bent in the short term, so we should be careful of the ways we let them influence policy. its really a circular dependency if you think about it.
Some investing incentives are aligned with accurate price discovery, some are not (warren buffet vs a pump and dump).
what i am implying above is that i view a management team that makes decisions based on share price as about as delusional as one that drinks its own urine for power ahead of important meetings.
If you're just chasing hype, you buy one of Chamath's myriad of SPACs and trust in his ability to pimp himself at every opportunity.
I look for them close to NAV don't like buying much out from there. The current best opportunities I see are, FPAC, TWCT, AACQ. They are priced well and should move when rumours come out. If you want one a little bit riskier but with a potentially sooner payoff, FUSE, rumoured to merge with Money Lion.
If your into options, SPACs with options create some great opportunities for Call Debit Spreads instead of having to buy commons and front the $10 redemption value.
There's also warrants which have more risk. FPAC+ and TWCTW are in my mind the best current warrants.
There is also Units! The best unit play right now I see is COOLU, its due to split soon and you will get one common and 1/3 of a warrant per unit, so buy in multiples of 3.
All of the tickers I mentioned are tech focused and backed by VC firms with a history of successful tech companies and SPACs.
There are a lot of garbage SPACs so you have to be careful.
Overall, your number one source for information should be SEC filings on Edgar. Read the documents there, research the management team, learn what the target payouts are and see who else is buying in.
SPACs are great and should last through the fall, the exchanges are looking at making direct listing much easier though and that will kill SPACs and probably be the move the pops the bubble.
The good thing about SPACs is that you have a focused management team of seasoned investors and you are investing with them and have the redemption price of $10 typically if there is a problem.
Edit: For the sake of clarity, what I hate is the amount in which influencers and social media impact the market.
This strategy works because of social media. People go around social media to hype up the company so to a certain extent it is a giant pump and dump scheme but the pumping is done by the collective internet communities on social media.
Typical aspects of the company don't matter. What matters is being able to hype the company. That's why stuff like electric vehicle makers, fintech and clean energy is stuff that everyone focuses on. Right now the average joe strongly believes that electric cars and clean energy are the future so they're more likely to buy into these SPAC companies because they're sold as "the next big thing" even though the reality could be that they're very risky but no one cares about that long-term because we all dump the SPAC shares before the merger completes anyways.