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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
by 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 agoSo then what are the high capital low margin businesses that are forgoing a traditional IPO and using a SPAC instead?
- formercoder 4y agoThe vast majority of businesses are high capital and low margin by HN standards. Plenty of them IPO just fine.
- hef19898 4y agoDefence 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 agoWhy would it be different to raise money through a SPAC if you're capital intensive?