Thread by @knowledgenets

Earlier today, @JonahLupton hosted an informational webinar titled “Everything about SPACs”. Great summary with lots of educational knowledge about SPACs. 👏 👏 👏

#spacs #Markets #investing

Here are the highlights below:

1) The webinar discussed SPACs, PIPEs, SPAC sponsors, warrants, and examples of SPACs. The webinar also discussed the SPAC process, de-SPAC process, and the redemption feature.

(Past performance is not indicative of future returns, and risks are present in SPAC investing.)

2) Most PIPE investments get completed at $10 per share.

Many SPAC warrants have a 5-year expiration timeline with a $11.50 strike price. SPAC warrants provide leveraged exposure to the target private company that is being taken public via a SPAC.

3) Although many SPAC sponsors typically target a 20% "promote", there is increasing competition & negotiation about the SPAC ”promote” due to both the large number of SPAC launches and a limited supply of high-quality, high-growth private companies at reasonable valuations.

4) Currently, there is lots of media coverage and retail interest in SPACs.

Guidance from the webinar: Read the corporate filings, understand investment risks and your own risk tolerance, try to pick the winners, and be cautious of over-hyped SPACs.

5) Prospective targets of SPAC sponsors include the following:

1. Private companies with “unicorn status” (valuation greater than $1B) in America

2. Private international companies

3. Corporate carve-outs & spin-offs

Currently, there are over 500 private unicorn companies.

6) SPACs can provide attractive risk-reward profiles for many SPAC investors. In the webinar, the speakers characterized this risk-reward tradeoff as “bond-like downside volatility with equity-like upside appreciation potential” for specific SPACs prior to deal announcement.

I hope everyone enjoyed this thread of thoughts! 😃
Thank you @JonahLupton for hosting the webinar.