Analyzing Six Disruptive Technology SPACs

You’d be hard-pressed to find a Wall Street analyst incapable of telling you what stocks to invest in. Much rarer is the analyst that tells you what not to invest in. This is especially true in the world of tech stocks, where everything is focused on telling great stories. Today’s youthful investors seem more interested in an exciting story than what red flags there might be. One red flag is when a company chooses to go public using a special purpose acquisition company (SPAC), a vehicle that does retail investors no favors.

With SPAC deals being announced left and right, we have a hard time keeping up. A few we’ve invested in – Desktop Metal, Ginkgo Bioworks (a very small position), Spire Global – while the rest we’ve left alone. The biggest problem with SPACs is they don’t provide enough information to make an informed investment decision. They all spew forth glossy investor decks detailing some blue-ocean opportunity, followed by the mandatory “my revenues estimates are bigger than everyone else’s revenue estimates” slide. Unsurprisingly, the SEC has “issued a number of warnings over SPAC marketing and investor communicatio