Investing

SPAC stocks - the new hot thing in the market

  • Last Updated:
  • Dec 1st, 2020 6:20 pm
[OP]
Member
User avatar
Aug 12, 2018
269 posts
35 upvotes
Vancouver

SPAC stocks - the new hot thing in the market

After the very recent red-hot success of VectorIQ stock which got converted as Nikola (NASDAQ:NKLA), there is an increased interest in SPAC or blank-check companies that are already listed in exchanges and looking for acquisition-merger with promising companies for IPO. This thread is for such SPAC stocks for investors.
What is SPAC:
A special purpose acquisition company (SPAC) is an entity that's set up as a company with no existing business purpose of its own. Each SPAC make an acquisition of an existing business which are not publicly traded. It does a merger with such an existing business and from then on, the SPAC takes on the identity of the business that it's acquired and gets traded.
VectorIQ the SPAC was trading at around $10 until the news broke out on the Nikola merger and was later trading at $34 on the day before it got listed as Nikola. And on Nikola's listing day, it started trading at over $65 and went all the way close to $90. That's a return of 8X within a span for 3-4 months.
Other examples of SPAC success recently:
  • Virgin Galactic Holdings (NYSE:SPCE) in late 2019.
  • In April, DraftKings (NASDAQ:DKNG) merged with Diamond Eagle Acquisition
Risks:
  • The trading price post merger could be lower
  • The deal could be called off despite the companies confirming initially which means investors have to wait more and price will come down.
Feel free to contribute to anything related to such SPAC.
Last edited by AlexPete on Dec 1st, 2020 12:36 pm, edited 4 times in total.
45 replies
Newbie
Apr 12, 2019
88 posts
64 upvotes
What is a SPAC?
simple definition :
A 19 yrs old gold digger that looking for a sugar daddy!

How successful this relationship is? Ask the sugar daddy
Deal Addict
Aug 17, 2008
4504 posts
3752 upvotes
SPAC def'n: The new name for the 40 year old "Shell Company" playbook that retired VSE promoters used.
Images
  • SPAC.JPG
[OP]
Member
User avatar
Aug 12, 2018
269 posts
35 upvotes
Vancouver
Bill Ackman's $4 Billion IPO (the biggest ever SPAC) got listed on Jul 23 as units (to be split as stock and warrants in couple of months) under the ticker PSTHU. Its aiming for matured cos like AirBNB (just an example). Floor price was $20 and traded at around $21.5 on Day 1.
Deal Expert
User avatar
Sep 19, 2004
23700 posts
5384 upvotes
where I belong
I always think of SPAC as SPEC(ulation), it's just that, FOMO stocks until they aren't

Take NKLA
It went to $90 and now it's $35

SPCE went to $40 and down to $15, now to $24-$27 again

They move on ANYTHING, or NOTHING
Which Credit Cards to sign up? >> Jerry's List of Credit Cards with $200+ Welcome bonus/Aeroplan & AMEX Churning FAQ
AMEX Personal 60K || Business Platinum 75K || Biz Gold 40K
[OP]
Member
User avatar
Aug 12, 2018
269 posts
35 upvotes
Vancouver
That’s why it’s important to invest before the pre-merger or reverse ipo happens. Why should one had waited for Nikola to trade when they could have purchased Vectoiq (SPAC) even on the day before Nikola was traded. I purchased Vectoiq at $16 after the merger announcement and sold half at $68 after it changed to Nikola.
There are dozens of activate and inactive SPAC and choose and invest wisely after any deal is announced and all will have ample time to evaluate and invest before the merger.
SHLL and SPAQ could be the next Nikola with their Hyliion and Fisker deals respectively. All have 1-2 more months to invest at their pre-merger price currently.Smiling Face With Smiling EyesSmiling Face With Smiling Eyes
Deal Fanatic
User avatar
Feb 28, 2006
7148 posts
666 upvotes
Richmond Hill
I think they are great medium term investments if you can get in near the bottom $10-15. Once FOMO comes, and depending on the target, you can then start banking. But you can also see that sometimes after the merger, things aren't always on the sunny side. Take $GPAQ and $HOFV (after merger ticker), concept sounds amazing but it has lost quite a bit since the ticker change.
Deal Addict
User avatar
May 6, 2010
2848 posts
275 upvotes
Markham
I think Al Rosen railed against this. There was an article, not sure who or when, about how Chinese companies were swindling Western investors through reversed merger.

Bought SPCE, and DKNG before I read up on SPAC. SPCE because of Branson and space tourism sounds interesting. DKNG because it's a gambling stock. Can't go wrong. Made money on SPCE and down about 25% of DKNG.

Bought 200 shares of CCXX, after I read up on SPAC. And this was the latest stock. Currently, down 14%. And I have no clue what the stock is for. Pure gambling that it will take off ala NKLA and SPCE for the first few months.
[OP]
Member
User avatar
Aug 12, 2018
269 posts
35 upvotes
Vancouver
Utz, one of the biggest snacks company is going to debut by end of this week through a reverse merger with a SPAC company - CCH.
CCH currently trades around $14 and is expected to go $18+ post merger. Utz is into its 100 year, consistent profit making and growing 10-15% annually. Expects to pay $0.20 as dividend this year.
[OP]
Member
User avatar
Aug 12, 2018
269 posts
35 upvotes
Vancouver
It seems many are now focusing on ipo via SPAC and the space is now having good quality companies. All the prices I mentioned in my initial post on Jul 18 had given excellent returns.
The SHLL stock which was was trading at $23 is now $50 and poised to grow even more as the merger with Hyliion is expected in a couple of weeks.
The SHLL warrants which was $7 is now $21 giving the highest returns!
Happy investing Smiling Face With Smiling Eyes
[OP]
Member
User avatar
Aug 12, 2018
269 posts
35 upvotes
Vancouver
alanbrenton wrote: What would be some good ones to get into?
For short term, SHLL is expected to go up 50-100% in 2-3 weeks time. For medium term, OPES (merging with BurgerFi), SPAQ (merger with Fiscker EV) looks good for the price currently at $13-16. Im planning to switch from SHLL to these two by end of this month.
Sr. Member
Feb 15, 2013
780 posts
251 upvotes
Toronto
add $kcac .. EV play.. bill gates + volkswagen.. I had chance to add around $16 but missed the boat.. this will swing until s1 filing..
[OP]
Member
User avatar
Aug 12, 2018
269 posts
35 upvotes
Vancouver
gskn4u wrote: add $kcac .. EV play.. bill gates + volkswagen.. I had chance to add around $16 but missed the boat.. this will swing until s1 filing..
True...Im waiting for it to cool down after the initial bumps and still have 3 months for the merger :)
Deal Expert
User avatar
Apr 21, 2004
54082 posts
18994 upvotes
AlexPete wrote: For short term, SHLL is expected to go up 50-100% in 2-3 weeks time. For medium term, OPES (merging with BurgerFi), SPAQ (merger with Fiscker EV) looks good for the price currently at $13-16. Im planning to switch from SHLL to these two by end of this month.
What do you think about Kensington with Quantumscape?

Top

Thread Information

There is currently 1 user viewing this thread. (0 members and 1 guest)