Real Money's Rev Shark has some thoughts about how the average investor can invest in SPACs like the pros.
"Many market strategists are convinced that this explosion in the numbers of SPACs will lead to sub-par performance as there are fewer quality deals remaining and more SPACs competing for the best ones. That is likely to be the case, but there will continue to be some very interesting opportunities among the SPACs that are able to find great deals," he wrote in a column on TheStreet. "SPAC stocks can be divided into two main groups -- pre-deal and post-deal. Both groups have already corrected from recent highs, but it is the pre-deal sector that has been under the most pressure in recent months as worries about finding deals increase."
"One of the primary reasons that so many SPACs were able to go public in recent months is that it has been so easy for them to raise money. What makes SPACs special is that if you invest in one and it doesn't find a deal, then you will be able to recoup a certain minimum amount of cash, which typically is $10. The sponsors of the SPAC are obligated to return those funds, minus some miscellaneous expenses, to investors if they can't close a deal," he continued.
And this comes as a Reuters report suggests that the SEC is looking into SPACs.
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