SPAC merger companies - alternative to IPO

[kettunen]

@Hereford_Picnic

This probably belongs in the “Course Speculations, etc., etc.” thread, but it’s probably more interesting to SPACland residents what’s happening:

I’ve come across a few of these recently—not in my own holdings, but similar situations.

When the redemption portion of a merger pulls >90% out of the free float, shorts get into a tight spot.
Arb funds don’t care what happens afterward. They take their sure couple of % profits and run.

DFNS / Ironnet most recently
https://twitter.com/JulianKlymochko/status/1431037898103480324?s=20

@Torniojaws

I guess people have woken up to this, as almost every SPAC drops like a stone after the merger.

The rules of the game are changing again when arbitragers and short-sellers are in the same waters at the same time.

Let’s see how it still works; I’ve reopened a position in SPNV / OfferPad.
Merger next week on Tuesday, August 31.

Ostin/myin juuri äsken -ketju (Osa 3)

@Torniojaws

So, for the most part, it’s smarter to wait until after the merger before buying an interesting SPAC, as you’ll get it “at a discount” then

For long-term holding, the best time to buy has seemed to be after the first quarterly report following the merger. Merger costs significantly impact EPS (earnings per share), and these are usually not accurately factored into analysts’ forecasts. This results in a big dip before returning to normal in the next quarter.