5 ms·

Big SPAC deals don’t need big SPACs

50 points by feross 6y ago

sdan 6y ago
TLDR: You need PIPE investors. Though with the recent correction, its harder to get, so it seems SPACs are trying to find companies they can merge w/o the need for PIPE to fill the rest. Lucid Motors at one point was valued at 70b without a single car on the road. And although Churchhill Capital 4 raised 1b, $24 billion was filled by PIPE investors iirc.
- math-dev 6y ago
  What are PIPE investors? Do they get favourable terms?
  - texasbigdata 6y ago
    Private investment in public equity. Generally, yes, but it's negotiated arm's length yet opaque; in addition there's various consideration to the legality/optics/consequences of selling a (large) stake at a (material) discount to current market spot rates.
    - eru 6y ago
      As the article says, that's reminiscent of how bad old IPO allocations work.
    - ethanolburner 6y ago
      I think it is important to note that PIPE investors will always purchase SPACs at NAV (usually $10) with only very rare exceptions. NAV is where most of the SPACs are currently trading due to the recent pullback. Therefore, it is only more favourable when the SPAC is trading above NAV, and this is extremely uncommon [1]. [1] - https://spactrack.net/activespacs/ https://spactrack.net/activespacs/ (filter by price and see how many are trading above $10 and below $10).
    - nceqs3 6y ago
      That is why it is especially disgusting when fake populist SPAC sponsors (looking at you Chamath) pretend to be on the side of retail as they give handouts to their Wall Street lords.
lenitabinol 6y ago
I am still super long PSTH. It's the biggest SPAC ever led by a reputable value investor. The target will be huge (Stripe, Starlink, etc.)
- nceqs3 6y ago
  Ackman is an activist investor not a value investor. Ackman already said Stripe declined his approach.
  - harry8 6y ago
    An activist investor is a kind of value investor. "These assets are worth more than the market says - the discount is bad management. Let's buy the assets cheap (good value) and change the people who, as owners, we pay to manage those assets." The idea that such an approach is anything but value and anything but completely normal and somehow rebellious and untrustworthy is quite weird and speaks to some kind of capture of highly paid management position by some kind of group of people. (I really hesitate to use the word "class" because these people might be a temporary alliance including the born poor and status challenged - the marxist "born to it" doesn't help the analysis much at all. Think the cool, sports jock table at high school).
    - eru 6y ago
      > An activist investor is a kind of value investor. "These assets are worth more than the market says - [...] Isn't any investor who's not just buying an index fund a value investor by that broad definition? (Even shortsellers just say: this stuff is worth less than the market says.)
      - harry8 6y ago
        As opposed speculator. "It's going up, i just know it." Or market makers, or technical analysts, or reading tea leaves...etc Value investor suggests you have valued the assets and have reason for thinking they are underpriced. Shareholders own the company's assets. Managers are their employees and are not owned any more than any employees or indeed humans are owned.
pjc50 6y ago
Registration-walled and complains if you open it in private mode (how?)
- ev1 6y ago
  Usually easiest to drop some localStorage/cookie on another subdomain or domain you control then check if it exists
- jffry 6y ago
  By default in Firefox, indexedDB is disabled in private browsing mode (dom.indexedDB.privateBrowsing.enabled=false in about:flags), so you can detect it with something like var db = indexedDB.open("test"); db.onerror = () => console.log('private browsing'); db.onsuccess = () => console.log('not private browsing'); Based on Bugzilla, it seems like currently the backing mechanism for implementing indexedDB will write origin names to disk which is not something they want Private Browsing to do. See this older bug https://bugzilla.mozilla.org/show_bug.cgi?id=781982 https://bugzilla.mozilla.org/show_bug.cgi?id=781982 and this newer one https://bugzilla.mozilla.org/show_bug.cgi?id=1639542 https://bugzilla.mozilla.org/show_bug.cgi?id=1639542

50 points by feross 6y ago

sdan 6y ago

TLDR: You need PIPE investors. Though with the recent correction, its harder to get, so it seems SPACs are trying to find companies they can merge w/o the need for PIPE to fill the rest. Lucid Motors at one point was valued at 70b without a single car on the road. And although Churchhill Capital 4 raised 1b, $24 billion was filled by PIPE investors iirc.

math-dev 6y ago
What are PIPE investors? Do they get favourable terms?
- texasbigdata 6y ago
  Private investment in public equity. Generally, yes, but it's negotiated arm's length yet opaque; in addition there's various consideration to the legality/optics/consequences of selling a (large) stake at a (material) discount to current market spot rates.
  - eru 6y ago
    As the article says, that's reminiscent of how bad old IPO allocations work.
  - ethanolburner 6y ago
    I think it is important to note that PIPE investors will always purchase SPACs at NAV (usually $10) with only very rare exceptions. NAV is where most of the SPACs are currently trading due to the recent pullback. Therefore, it is only more favourable when the SPAC is trading above NAV, and this is extremely uncommon [1]. [1] - https://spactrack.net/activespacs/ https://spactrack.net/activespacs/ (filter by price and see how many are trading above $10 and below $10).
  - nceqs3 6y ago
    That is why it is especially disgusting when fake populist SPAC sponsors (looking at you Chamath) pretend to be on the side of retail as they give handouts to their Wall Street lords.

lenitabinol 6y ago

I am still super long PSTH. It's the biggest SPAC ever led by a reputable value investor. The target will be huge (Stripe, Starlink, etc.)

nceqs3 6y ago
Ackman is an activist investor not a value investor. Ackman already said Stripe declined his approach.
- harry8 6y ago
  An activist investor is a kind of value investor. "These assets are worth more than the market says - the discount is bad management. Let's buy the assets cheap (good value) and change the people who, as owners, we pay to manage those assets." The idea that such an approach is anything but value and anything but completely normal and somehow rebellious and untrustworthy is quite weird and speaks to some kind of capture of highly paid management position by some kind of group of people. (I really hesitate to use the word "class" because these people might be a temporary alliance including the born poor and status challenged - the marxist "born to it" doesn't help the analysis much at all. Think the cool, sports jock table at high school).
  - eru 6y ago
    > An activist investor is a kind of value investor. "These assets are worth more than the market says - [...] Isn't any investor who's not just buying an index fund a value investor by that broad definition? (Even shortsellers just say: this stuff is worth less than the market says.)
    - harry8 6y ago
      As opposed speculator. "It's going up, i just know it." Or market makers, or technical analysts, or reading tea leaves...etc Value investor suggests you have valued the assets and have reason for thinking they are underpriced. Shareholders own the company's assets. Managers are their employees and are not owned any more than any employees or indeed humans are owned.

pjc50 6y ago

Registration-walled and complains if you open it in private mode (how?)

ev1 6y ago
Usually easiest to drop some localStorage/cookie on another subdomain or domain you control then check if it exists
jffry 6y ago
By default in Firefox, indexedDB is disabled in private browsing mode (dom.indexedDB.privateBrowsing.enabled=false in about:flags), so you can detect it with something like var db = indexedDB.open("test"); db.onerror = () => console.log('private browsing'); db.onsuccess = () => console.log('not private browsing'); Based on Bugzilla, it seems like currently the backing mechanism for implementing indexedDB will write origin names to disk which is not something they want Private Browsing to do. See this older bug https://bugzilla.mozilla.org/show_bug.cgi?id=781982 https://bugzilla.mozilla.org/show_bug.cgi?id=781982 and this newer one https://bugzilla.mozilla.org/show_bug.cgi?id=1639542 https://bugzilla.mozilla.org/show_bug.cgi?id=1639542