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I don't understand the mindset of the people who are the investors in the SPAC IPO though. They are buying a loot box which could turn out to contain anything.
by kryptiskt 4y ago
I don't understand the mindset of the people who are the investors in the SPAC IPO though. They are buying a loot box which could turn out to contain anything.
- pavlov 4y agoIt’s not as bad as that. SPAC investors can get their money back after the deal is announced and before the merger is consummated. Some SPACs had over 90% of such redemptions, which makes it complicated for the private company being acquired: the SPAC may appear to have, say, $300 million in cash, but when the merger is through you only have less than $30 million. Bad news for loss-making growth businesses.
- doktorhladnjak 4y agoSounds to me like you understand the mindset perfectly!
- smabie 4y agoI mean, it's pretty similar to investors in VC or PE or mutual / hedge funds: you are investing in the managers skill / talent to generate you a return.