SPACs - What do YOU think?

I’ve been looking at this idea of SPACs and personally quite like them. SPACs are ways for emerging Companies to generate finance, giving us the ability to get in on those 10X opportunities.

I’m specifically liking the ETF SPAC approach… A diversified opportunity which includes emerging companies with expected future explosive growth.

According to the FT, $48bn has been raised by US SPACs. That’s up 3X from 2019. Now, there’s talk of the UK following suit.

What do you all think about them? Let me know in the comments!!

Here are a few articles of interest:

FT, - https://www.ft.com/content/af75ce79-2bcd-46c4-92f4-8886513e539c
TechCrunch, - https://techcrunch.com/2020/08/21/almost-everything-you-need-to-know-about-spacs/
Forbes, - https://www.forbes.com/sites/simonmoore/2020/10/05/why-spacs-are-exploding-a-ceos-take/#3be1aaf83f87

Disclaimer: any information found on the Community platform does not constitute any form of advice or recommendation by Crowdsense Ltd. and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Appropriate independent advice should be obtained before making any such decision.

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Very interestind articles Philip!! Thank you for shareing :+1:

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From the bit of reading I’ve done, they are risky and speculative and some compare them to penny stocks…BUT! They are gaining in popularity and as long as proper research is done, they can be a very profitable investment.

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I’d say these are interesting investment vehicles to provide finance to new businesses, and in a much more speedy manner
But from I understand, the constitution of a SPAC will be different from any other, and investors may be blind to operational risks inherent to the SPAC they’re investing in; potentially even the SPAC’s management team itself.
I guess with SPACs, much depends on what the acquisition company defines as its goals, what it offers to investors, what the investors’ expectations are, the degree of operational complexity that will be brought upon, the management team; and ultimately if all of these converge in a realistic deal for the parties involved.

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No problem, hope you enjoy them!

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Yeah definitely agree, Karen. As with anything, proper research is required. That’s why I like it on here, people catch things easily missed when you are trawling through hundreds of opportunities!

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Yeah for sure. I’m quite interested in the ETF offerings and their structures in relation to these bespoke products. I think there should be some strong governance as a result of the regs surrounding these products… But I suppose as with everything, regulators can often miss the mark! Proper DD is definitely required!

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Yes @pf1, and like with most things, first comes the innovation and then the regulation… as of now, SPACs in most cases are higher risk than other investment vehicles

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This, for me, rules it out for retail investor, unless you have 1. a very reliable old school tie community, 2. belong to all the right clubs and 3. are inclined to network heavily.

I am starting to appreciate that half of the skill in investing is to know HOW NOT to invest, and other half is WHAT to invest in.

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