5 ms·

Any successful SPACs out there?

by boringg 4y ago

Glyptodon 4y ago
Successful for who? Aren't a lot of them structured so specific parties basically can't lose?
- throwaway5959 4y ago
  See: Chamath
mr_luc 4y ago
I think RocketLab qualifies.
- nordsieck 4y ago
  > I think RocketLab qualifies. They look pretty good, but I think it's responsible to hold off on calling them a success until they launch Neutron. From what I can tell, it's not very likely that they can be profitable with just Electron.
  - Octoth0rpe 4y ago
    They're a heck of a lot more than Electron at this point. They're really in the satellite parts business at this point, with launch services as a side business. For the last two quarters, they made almost 2x as much on "Space systems" (solar panels, busses, etc) as they did on launch services. Launch is nice and visual so it gets all the attention, but it's only 1/3 of their revenue. Source: https://s28.q4cdn.com/737637457/files/doc_financials/2022/q3/FINAL_Q3-2022-Rocket-Lab-Earnings-1.pdf https://s28.q4cdn.com/737637457/files/doc_financials/2022/q3...
JohnTHaller 4y ago
There are some that are successfully moving lots of money from one set of parties to another under shady circumstances.
sokoloff 4y ago
Draft Kings is probably one, depending on your definition of successful (and maybe your feelings about heavily advertised gambling).
this_user 4y ago
Not really. You just have to ask yourself why these private companies were even going the SPAC route rather than do a regular IPO. The answer was usually that these were not particularly great companies, and doing an IPO means the company is put under a lot of scrutiny. SPACs are a way to avoid that, so insiders can cash out.
- azinman2 4y ago
  Or they were high capital low margin businesses. There are many of these out there, like defense or airline businesses. We need them to exist, but investors don’t like them because it’s harder to make money from them. It doesn’t mean the business is bad, it just means payoff is longer. SPACs are one of the few ways they can get money.
  - cool_dude85 4y ago
    So then what are the high capital low margin businesses that are forgoing a traditional IPO and using a SPAC instead?
  - formercoder 4y ago
    The vast majority of businesses are high capital and low margin by HN standards. Plenty of them IPO just fine.
  - hef19898 4y ago
    Defence is a different beast, and not necessarily low margin neither. Airlines as well, except the margin are tighter there. Since both industries are rather well understood by investors, IPOs and general investment are not that much of a problem. All those companies relying on VC money to grow by selling dollars for dimes, in hopes of dumping the whole thing on retail investors through an IPO, well, those are in a lot of trouble now. As are those in need of a lot of capital to develop products, e.g. expensive hardware, that don't have a clear path to releasing a product to the market so far.
  - Grustaf 4y ago
    Why would it be different to raise money through a SPAC if you're capital intensive?
feifan 4y ago
It depends on your time horizon. Lots of people deride Chamath's SPACs, but several of them traded well above their initial $10 price for 1.5+ years until the market started dropping at the beginning of this year.
- blitzar 4y ago
  > Lots of people deride Chamath's SPAC That is because he is a shyster. Con artists make money and are equally as deserving of derision as people who go broke.
evanelias 4y ago
MP Materials is trading well above its IPO price. That said, there were some shareholder lawsuits earlier this year, alleging various sketchy things.
- celestialcheese 4y ago
  If anyone is interested here's the lawsuit. https://thebrios.com/wp-content/uploads/2022/02/2022-02-22-Bernstein-v.-MP-Materials-Corp.-2-22-cv-00315.pdf https://thebrios.com/wp-content/uploads/2022/02/2022-02-22-B...
609venezia 4y ago
You could make a case for blue owl capital
HWR_14 4y ago
Hostess decided to SPAC.
cdolan 4y ago
Archaea Energy ticker LFG. Sold to BP for $4 billion
jpgvm 4y ago
SKIN - still trading above NAV post-merger despite all the market turmoil. It's not one of the "sexy" SPACs in EVs and stuff though, they make beauty products and most of their business is consumables for those products.
- hef19898 4y ago
  You gotta love companies with a solid business, clients and products, don't you?
davedx 4y ago
Enovix (ENVX) is promising. It's the only one I kept some money in.

Any successful SPACs out there?

Glyptodon 4y ago

Successful for who? Aren't a lot of them structured so specific parties basically can't lose?

throwaway5959 4y ago
See: Chamath

mr_luc 4y ago

I think RocketLab qualifies.

nordsieck 4y ago
> I think RocketLab qualifies. They look pretty good, but I think it's responsible to hold off on calling them a success until they launch Neutron. From what I can tell, it's not very likely that they can be profitable with just Electron.
- Octoth0rpe 4y ago
  They're a heck of a lot more than Electron at this point. They're really in the satellite parts business at this point, with launch services as a side business. For the last two quarters, they made almost 2x as much on "Space systems" (solar panels, busses, etc) as they did on launch services. Launch is nice and visual so it gets all the attention, but it's only 1/3 of their revenue. Source: https://s28.q4cdn.com/737637457/files/doc_financials/2022/q3/FINAL_Q3-2022-Rocket-Lab-Earnings-1.pdf https://s28.q4cdn.com/737637457/files/doc_financials/2022/q3...

JohnTHaller 4y ago

There are some that are successfully moving lots of money from one set of parties to another under shady circumstances.

sokoloff 4y ago

Draft Kings is probably one, depending on your definition of successful (and maybe your feelings about heavily advertised gambling).

this_user 4y ago

Not really. You just have to ask yourself why these private companies were even going the SPAC route rather than do a regular IPO. The answer was usually that these were not particularly great companies, and doing an IPO means the company is put under a lot of scrutiny. SPACs are a way to avoid that, so insiders can cash out.

azinman2 4y ago
Or they were high capital low margin businesses. There are many of these out there, like defense or airline businesses. We need them to exist, but investors don’t like them because it’s harder to make money from them. It doesn’t mean the business is bad, it just means payoff is longer. SPACs are one of the few ways they can get money.
- cool_dude85 4y ago
  So then what are the high capital low margin businesses that are forgoing a traditional IPO and using a SPAC instead?
- formercoder 4y ago
  The vast majority of businesses are high capital and low margin by HN standards. Plenty of them IPO just fine.
- hef19898 4y ago
  Defence is a different beast, and not necessarily low margin neither. Airlines as well, except the margin are tighter there. Since both industries are rather well understood by investors, IPOs and general investment are not that much of a problem. All those companies relying on VC money to grow by selling dollars for dimes, in hopes of dumping the whole thing on retail investors through an IPO, well, those are in a lot of trouble now. As are those in need of a lot of capital to develop products, e.g. expensive hardware, that don't have a clear path to releasing a product to the market so far.
- Grustaf 4y ago
  Why would it be different to raise money through a SPAC if you're capital intensive?

feifan 4y ago

It depends on your time horizon. Lots of people deride Chamath's SPACs, but several of them traded well above their initial $10 price for 1.5+ years until the market started dropping at the beginning of this year.

blitzar 4y ago
> Lots of people deride Chamath's SPAC That is because he is a shyster. Con artists make money and are equally as deserving of derision as people who go broke.

evanelias 4y ago

MP Materials is trading well above its IPO price. That said, there were some shareholder lawsuits earlier this year, alleging various sketchy things.

celestialcheese 4y ago
If anyone is interested here's the lawsuit. https://thebrios.com/wp-content/uploads/2022/02/2022-02-22-Bernstein-v.-MP-Materials-Corp.-2-22-cv-00315.pdf https://thebrios.com/wp-content/uploads/2022/02/2022-02-22-B...

609venezia 4y ago

You could make a case for blue owl capital

HWR_14 4y ago

Hostess decided to SPAC.

cdolan 4y ago

Archaea Energy ticker LFG. Sold to BP for $4 billion

jpgvm 4y ago

SKIN - still trading above NAV post-merger despite all the market turmoil. It's not one of the "sexy" SPACs in EVs and stuff though, they make beauty products and most of their business is consumables for those products.

hef19898 4y ago
You gotta love companies with a solid business, clients and products, don't you?

davedx 4y ago

Enovix (ENVX) is promising. It's the only one I kept some money in.