SPAC Investing

[ValueArb]

Plenty of higher quality new issues at or below $10.00.  I like FVIVU, FRWAU, KAHCU, LAACU and ROSSU as cash alternatives.

 

Hmm, my broker is telling me that only FRWAU exists?

[djleeam]

In IBKR the units are sometimes listed as, for example, FVIV U, KAHC U

[shamelesscloner]

In IBKR the units are sometimes listed as, for example, FVIV U, KAHC U

 

He must not be dealing with IB if someone is actually telling him something ;)

[ValueArb]

In IBKR the units are sometimes listed as, for example, FVIV U, KAHC U

 

Thanks, thought I tried that but evidently I did not. FVIV should return FVIV U as a option but doesn't, and apparently I didn't think to type it in directly.

[rosemontseneca]

Some of the new issues are really struggling.  Presume they have to turn the tap off at some point?

 

Picked up AFAQU at 9.85 just now

 

A-rod spac (SLAMU) also now below 10

[lnofeisone]

Bringing this back a bit now that SPAC-mania died down. Anyone looking at companies that got merged. Looking at Cano Health and Indie Semiconductor (EV/auto-tech) plays. 

[whatstheofficerproblem]

Noticed something really interesting, Lee Ainslie's Maverick Capital and a lot of other Hedge Funds own a ton of SPACs. Here's where things get interesting, More than half of their holdings are not SPAC common stock, but SPAC.U - The Units. What is even more interesting is that, most of the SPACs of which this fund in particular owns Units of, are liquidating early with shareholder approval or are close to it. What do you think they are doing?

[gfp]

8 hours ago, whatstheofficerproblem said:

Noticed something really interesting, Lee Ainslie's Maverick Capital and a lot of other Hedge Funds own a ton of SPACs. Here's where things get interesting, More than half of their holdings are not SPAC common stock, but SPAC.U - The Units. What is even more interesting is that, most of the SPACs of which this fund in particular owns Units of, are liquidating early with shareholder approval or are close to it. What do you think they are doing?

 

After your post I went and looked at Maverick Capital's portfolio.  Jesus what a mess.  I couldn't even count the number of positions and inconsequential trades made every quarter.  To answer your question, they were probably buying the units at IPO knowing that they had some optionality and couldn't lose money on a cash substitute with the possibility of a pop.  There are companies that were specializing in these pre-deal SPACs and it was popular when interest rates were lower and SPACs sometimes went up.  Now not so much.  Guys that routinely did this would get the calls to be offered the new SPAC offerings and the warrants were sort of "free" and had value when they separated.  You can still make money buying a SPAC below trust value and voting to redeem when the time comes but there are better opportunities out there.  Also a one year t-bill yields 4.63% today so that raises the hurdle on what is worth doing.

[Gregmal]

One thing to remember is that the SPAC keep money in trust. So the interest element is a wash. Theyre buying the same t-bills you are. So in 2020 you would get back $10+ accrued interest. Today its the same but interest will be higher so maybe you get back 10.35 plus keep the warrant. 

[whatstheofficerproblem]

The following SPACs: LIBY, ERES, ACAX, FEXD, HHGC, JWAC & PAFO have entered agreements for de-SPACs. These were on my tracking list from a VIC write up, assuming they will be successful at the merger, what do you guys suggest, the 'Rights' or the 'Warrants'? The rights are literally trading for 1-2 cents except for PAFO. While the warrants are trading at 0.0x, 10th of a cent. What would maximize returns? The companies they are merging with are decent even if they are not excellent, in my opinion. Will they hold $10 or above, never know, SPACs in general are sold into oblivion once the de-SPAC is complete, so, this has been on my mind.

Edited November 16, 2022 by whatstheofficerproblem