A SPAC Checklist
In 2020 we've learned that SPACs have the ability to offer some life changing financial gains. I've engaged in some short and long term trades with these financial instruments, but about 90% of my trades are long term focused. This is a check list I use to determine the viability of a SPAC. Note that some of the points listed can't really be figured out until a merger announcement is made. But things like the SPAC management team or industry can be found in the S-1*.:
*Industry targets are often vague in S-1s but you can usually infer what it will be from the industries the management team has experience in or the hedge fund - private holding company they're associated with.
1. Management team. Their connections and affiliations with other companies/ industries
2. Does the company have a product or service that will "disrupt" their industry? Is it revolutionary like a a new type of battery tech, sports gambling platform, or just another generic electric car?
3. The viability of their acquisition target. Do they have an actual product? Are they already profitable ?
4. Market potential of acquired company. Is the market they in growing rapidly?
5. Competitors. Who are the big players if any in their industry ?
*Industry targets are often vague in S-1s but you can usually infer what it will be from the industries the management team has experience in or the hedge fund - private holding company they're associated with.
1. Management team. Their connections and affiliations with other companies/ industries
2. Does the company have a product or service that will "disrupt" their industry? Is it revolutionary like a a new type of battery tech, sports gambling platform, or just another generic electric car?
3. The viability of their acquisition target. Do they have an actual product? Are they already profitable ?
4. Market potential of acquired company. Is the market they in growing rapidly?
5. Competitors. Who are the big players if any in their industry ?
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SPAC Central
Created By: | Maverick |
Created: | Jun 21, 2020 |
Total Followers: | 7 |
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SPACs ("Special Purpose Acquisition Companies") are blank check companies that have cash in them and are seeing a target to acquire. These can be fun because it's a 🕵️♀️ game of who they're going to acquire. It can be profitable if the target company ends up being something in a hot space.
Make sure to do your DD on management behind the SPAC, cash position, and target sector.
Make sure to do your DD on management behind the SPAC, cash position, and target sector.