Wall Street Bets: The EBR Edition

ChezCheese:) said:
But if you don't know what company the Spac is working with, then you are buying a pig in a poke. That's a real flip of the coin. Do all NAVs start at $10? And then they go up when they announce what the company is, yes? So to buy at $10, you're really taking a chance. But we are doing things differently. I'm looking to invest in companies/industries I believe in for the long term, not just working on this qtr's income.
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When you buy a SPAC at NAV, with no intention of holding it through the merger, there is no flip of the coin. The money is safe and your downside risk is practically nothing. Holding a spac through a merger is really taking a chance. If you are new to this, I would encourage you to do more research before diving in. You can lose a lot of money buying spacs that have gone up significantly past NAV, and then hold them through merger.

Good luck.
 
ChezCheese:) said:
. I'm trying to find places to park my money that will do better than the mattress or a savings acct.
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You posted this earlier in the thread...

Buying a SPAC at NAV is essentially the same thing as parking your money in a savings account, but it offers significant upside potential with negligible risk.

Don't get burned buying hyped up spacs and holding through the merger. QS is a rare exception, most all spacs fail post merge.
 
These two will be my only forays into SPACs, I think.

When you say fail, do you mean actually fail and go out of business, or do you mean, they drop down below their opening share price for awhile and may not rise for a long time and a buyer would be much better off buying later if they want that company's stock?

I bought 2 (yes, just 2😋) shares of Maxeon when it came on the market, a Singapore based solar company, a spin-off from Sunpower for international markets. It dropped, and I thought, well, there's a lesson for you 😏. But my money has more than doubled, in 6 months, so I am fine with that.
 
Fail in the sense they drop below the $10 starting price, and may not rise back above the $10/share price for a long time, if ever.
 
I'm surprised that noone is talking about Texas. Whoever gets a nice no bid contract to install the winterized controls that were left out "because it never gets cold in Texas" will have a nice big stock price jump for a few days after it's announced.
 
bikeman242 said:
Be careful buying any spac when it is trading away from the NAV floor of $10. SPACs get crushed whenever there is a general market downturn. If you are going to buy a Spac over $11, I suggest waiting for the next dip. Look at how spacs performed during the week of the Gamestop debacle, they crashed much harder then the general market. Its good to keep cash on the side for the next red week, and not chase once they start to move away from NAV.

The whole appeal of SPACs is the asymmetrical risk/reward profile, which does not exist if you start buying spacs over $12.
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As I said earlier in this thread, SPACs get crushed when the market is overall trending down. This may be a good time to buy.
 
bikeman242 said:
As I said earlier in this thread, SPACs get crushed when the market is overall trending down. This may be a good time to buy.
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The CCIV merger news is intriguing. the "buy the rumor, sell the news" is in full swing. The thing is, Lucid has all the ingredients necessary to pull off some big wins. I will consider buying to hold long term if it keeps dropping back towards $10
 
QuantumScape (QS) the start-up electric car battery company crashes after launching new share offering .
Trading today at $48 and change .
 
GameFlop (GME) Shares of the brick-and-mortar retailer tanked 33.8% after failing to give investors enough details about its turnaround plan and acknowledging in a filing that it was considering selling additional equity shares. GameStop also missed on the top and bottom lines of its quarterly results on Tuesday.
 
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