Do Chamath's SPACs Make Money? All About the Entry Point

Chamath Palihapitiya is undoubtedly one of the greatest SPAC stock promoters, but he's come under fire lately. So, as the pitchforks start to come out, we check-in on his combined 14 SPACs and PIPEs.
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Chamath Palihapitiya is undoubtedly one of the greatest SPAC stock promoters today with at least 14 SPAC related deals to his name. He's been able to sponsor and get to de-SPAC on 3 big deals via his Social Capital Hedosophia SPAC line (IPOA -> SPCE, IPOB ->OPEN, IPOC -> CLOV), and a fourth on the way as IPOE has struck a deal to take SoFi public, and has been in at least 8 SPAC PIPEs. 

But, he is increasingly getting heat from the FinTwit and WallStreetBets crowd as they've become disgruntled with the performance of the SPACs, quality of the deals (e.g. Clover which had a blistering short seller report come out on it), and some of his large stock sales (SPCE). We take a quick look at his track record: 

Chamath's SPACs

Chamath's 6 SPACs. Stock prices as of COB Apr-5

Chamath's 6 SPACs. Stock prices as of COB Apr-5

CLOV has been a laggard, mostly given the negative news. While you'll see that OPEN is down 33% from De-SPAC, important to realize the stock is still over 2x its IPO price. Meaning, if you got in early, you are still likely pleased. SPCE has been a surefire winner, and was at the early end of the recent SPAC renaissance. 

Chamath's PIPEs

Chamath and team have also participated in 8 SPAC stock pipes. 3 of those SPACs have already de-SPAC'd: MP Materials (MP), Desktop Metal Inc (DM), and Metromile Inc (MILE). The remaining 5 are all pending completion and, with the exception of ACTC / Proterra, may be within a price range for Chamath fans to get excited about if they believe there is big news yet to be announced:

ACTC - ArcLight Clean Transition Corp is taking Proterra Inc public with a $415 million dollar PIPE. Yesterday it closed at $ 17.88 down -2.7%.

RAAC - Revolution Acceleration Acquisition Corp is taking Berkshire Grey public with a $165 million dollar PIPE. Yesterday it closed at $ 10.24 up .8%.

RMGB - RMG Acquisition Corporation II is taking ReNew Power Private Limited public with a $855 million dollar PIPE. Yesterday it closed at $ 10.07 down -1.0%.

SPRQ - Spartan Acquisition Corp II is taking Sunlight Financial LLC public with a $250 million dollar PIPE. Yesterday it closed at $ 10.31 up .2%.

TSIA - TS Innovation Acquisitions Corp is taking Latch, Inc. public with a $190 million dollar PIPE. Yesterday it closed at $ 10.97 up .6%.

Take Away

Investors' views on Chamath and his SPACs will most likely be informed by when they decided to invest. For those that invested at "peak SPAC", when prices were inflated, there will certainly be disappointment, but for others that got in at reasonable prices (e.g. SPCE and OPEN) they will be more content. The situation with CLOV and his selling of SPCE will rightly serve as a caution flag for investors as the various Chamath SPACs and PIPEs move forward.

Overall, the message for SPAC investors remains the same: do the homework, don't invest based solely on celebrity, and make sure to get in at the right price.