What are SPACs?
SPAC stands for Special Purpose Acquisition Company. SPACs are investment vehicles that go public seeking capital in order to merge with the unlisted target company in a reverse merger (business combination). Here is the process behind SPAC:
(a) The establishment of the SPAC
(b) The IPO of the SPAC
(c) The search for a target company, with the appropriate requirements in relation to the investment project, to be presented to the market as the target of the subsequent business combination
(d) The vote by the meeting on the business combination. in case of a positive outcome of the vote, the merger and/or integration is proceeded with, if necessary, and the dissenting members are liquidated. Instead, in the event of a negative outcome, dissolution of the SPAC and return of capital to investors will take place.
Why are we interested in SPACs at this time?
Because there are so many EV (Electric Veichles) related companies that are listing on the market through this process. At this time we are seeing a real hype in the markets about this area. Classic FOMO (fear of missing out), or the fear of missing out on opportunities, is disrupting the market. Accomplice also to the news about the vaccine and a presidential Biden, the Electric sector is literally flying. Let us also not forget Tesla’s entry on the main U.S. index, which brought further euphoria.
How then can these SPACs be exploited?
You have to go and scout out potentially upwardly explosive companies that will merge with the vehicle SPAC. How is it done? Clearly with research, study and analysis. Activities we do for you in our premium club. In less than a month we have uncovered several very interesting Spacs. I will mention two of them: SBE (which we also talked about at LeFonti.tv bringing home a +43% profit in three days) and DPHC. The latter in particular has morphed into RIDE aka Lordtown motors: a manufacturer of electric pickup trucks. For now, the company does not generate profits and does not sell, so we rely on a future expectation. We, however, care little, we must take advantage of the moment and read the market. You can see the results for yourself. The advice I can give is to take advantage of the euphoria of the moment but tread carefully. The risk of jumping into these transactions completely independently and without careful prior analysis is high. Just as there are 10 SPACs that can do +400% in a very short time, there are just as many that burn capital. I invite you to follow us in the community to learn more.