Last Monday morning, I woke up to an interesting text from my roommate. It was a screenshot he got from a friend of an email the friend got from his prime broker, talking about how they would be restricting leverage on SPAC plays going forward. After some conversation, It seemed as though this was a street wide phenomenon, and not just a single desk doing this. As a result, I liquidated my entire SPAC portfolio Monday at the open, with the expectation that funds would have to sell out of some of their SPAC holdings. As this week progressed, the combination of general risk off (prompted by the TLT move) and this (assumed) de-grossing on the part of funds holding these instruments resulted in a fire sale in some of my favorite names.
Throughout the week, I did some research about which SPACS I would like to scoop up after the carnage was over, and I've settled on the following names, all of which I bought Friday morning.
QELL
PSTH
BTWN
GSAH
AJAX
IMPX
SV
STWO
IPOF
FIII
DGNS
I've picked these names due to some combination of track record & management, potential, size & ESG cred. I'm not going to go into a deep dive on all of their fundamentals, but my two favorites are DGNS and IMPX. DGNS has a real shot at merging with a moderately mature silicon valley company due to Dragoneer's well connected-ness, and IMPX is a climate ESG SPAC which I like a lot. There are so many billions of dollars looking for climate deals and only so many vehicles available. Look at what happened to CLII when it announced a deal.
I also like that many of these names, after the derisking, are trading close-ish to their NAV, which presents and EXTREMELY attractive R:R opportunity for simply holding the stock. Either you lose $0.50-$1.00 per share, or you make $10.00-$20.00 on an announcement with follow through. Seems like a good setup. Some of these also have options, which could make for a fortuitous trade. Selling puts in IPOF, for example, near NAV, would reduce risk to virtually 0 + earn you a gain, but potentially remove some of the upside.
This list is hopefully just something to get you started, but you could do worse than doing some DD starting with my list above.
Cheers!
Throughout the week, I did some research about which SPACS I would like to scoop up after the carnage was over, and I've settled on the following names, all of which I bought Friday morning.
QELL
PSTH
BTWN
GSAH
AJAX
IMPX
SV
STWO
IPOF
FIII
DGNS
I've picked these names due to some combination of track record & management, potential, size & ESG cred. I'm not going to go into a deep dive on all of their fundamentals, but my two favorites are DGNS and IMPX. DGNS has a real shot at merging with a moderately mature silicon valley company due to Dragoneer's well connected-ness, and IMPX is a climate ESG SPAC which I like a lot. There are so many billions of dollars looking for climate deals and only so many vehicles available. Look at what happened to CLII when it announced a deal.
I also like that many of these names, after the derisking, are trading close-ish to their NAV, which presents and EXTREMELY attractive R:R opportunity for simply holding the stock. Either you lose $0.50-$1.00 per share, or you make $10.00-$20.00 on an announcement with follow through. Seems like a good setup. Some of these also have options, which could make for a fortuitous trade. Selling puts in IPOF, for example, near NAV, would reduce risk to virtually 0 + earn you a gain, but potentially remove some of the upside.
This list is hopefully just something to get you started, but you could do worse than doing some DD starting with my list above.
Cheers!
Comment:
Meant to add CCAC to this list as well.
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