Maverick 22:31 PM - Mar 03 2021

SPACageddon 2.0?

If you've been playing SPACs, then you know the pain the last two weeks have been.

I survived SPACageddeon 1.0 back in October 2020.  That said, I didn't remember it well, since it was so damn painful.

So tonight, did some quick research to see if we were in SPACageddon 2.0 right now - which was overdue by amount a month, in my opinion.  The sector is just too crowded and I am seeing absolutely stupid deals (pre revenue, pre product) and ridiculous valuations.

The power has actually shifted over to the companies instead of the SPACs.  There are many, many more SPACs than a year ago and way less good deals by the day.

Going forward, you'll need to be very selective in what you buy.  Not everything will pop.  It needs to be sexy and at a good valuation.

So, let's get into where I think we are on the timeline

Two samples from SPACageddon 1.0 (both of which I was in at various times):
SHLL/HYLN - October 1 to November 2, 2020 - topped out at 55 on September 29, cliff dived to 18.50 on November 2.
DPHC/RIDE - October 1 to November 2, 2020  - topped out at 31, cliff dived to 13 on November 2, then almost fully bounced back to ATH by November 23.

...fast forward to February 2021

CCIV hits 58 on Feb 18, then started its nose dive (already down 60% as of today)

I think CCIV (that valuation was bubblelicious) started SPACageddon 2.0.  Bond yields rising aren't helping, either -- risk off can be quick and severe.

If history repeats itself (unlikely, but what else do we have to use?), then I think we're looking at late March before we see the good stuff back to its previous highs.

This could actually play out well - if you can sustain the pain. We still do not have merger vote dates from $GIK , $NGA , or $TPGY  (all quality and good valuations).  The closer these happen to late March/early April, the better we should be.

Wild card: Bond yields continuing to cause problems -- this is a big, big liquidity drain that was not part of SPACageddon 1.0.
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Comments

Maverick - 2 years ago
This went on a full month longer than I was thinking - the volume just dried completely up.  However, in the last few days, it's been nothing but green.  Are we back or another dead cat bounce?

I am wondering if it's all coming back now that the SEC has grinded to a halt on new submissions, which just leaves us with what's there....and there's simply a flight to quality on SPACs.  
Maverick - 3 years ago
This is all looking on schedule, still.  🤞

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.
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