FAANG stocks may or may not provide impressive price growth from here. Regardless, an Israeli SPAC is going public on the U.S. market and it's looking to produce the impressive returns it already has in the past.
FAANG stocks have been seemingly unstoppable in the past several years and, after enjoying an explosive run as a group for more than a decade, are still outperforming the U.S. stock market in 2020 by an incredibly wide margin. Now, with stay-at-home services like e-commerce, cloud and streaming potentially seeing massive demand pulled forward from later years and a correction already in for 2020, some investors are looking for alternatives to FAANG stocks for their growth capital.
First off, the IPO market in the U.S. is expected to be $80 billion in 2020. The highest total for IPOs in a year in the U.S. since 1990 has been $60 billion. Some on Wall Street pose that IPOs are stealing the thunder of FAANG stocks of late.
Enter ION Acquisition Corp., which just last week listed on the New York Stock Exchange and raised almost $260 million after targeting a capital raise of about $230 million. The SPAC manages about $2 billion. Founded by experts investing in Israeli technology companies, Ion is seeking to buy new Israeli tech companies whole. Israel has one of the highest start-ups per capita in the world, so while the economy may not be sizable, it is fertile for innovation and promising for growth investments.
Ion invested in Mellanox, which was later sold to chip giant Nvidia (NVDA) - Get NVIDIA Corporation Report for almost $7 billion and it invested in Mobileye, which was sold to Intel (INTC) - Get Intel Corporation (INTC) Report for $15 billion. Ion CEO Gilad Shany told TheStreet his SPAC recently financed a company at a $600 million valuation and after taking it public, saw the valuation jump to $6 billion.
And Ion may have some more tricks up its sleeve.
Monday.com, Shany says, could go public within the next 12 months and is expected to become one of the world's most present business-to-business workspace collaboration software systems. It was recently valued at $2.7 billion earlier this year.
Shany also said "in our pipeline, there are about 50 to 80 companies that we think are gong to be unicorns or multi-billion dollar companies," which Ion can take public. While exit strategies in Israel have recently been hard to come by, Ion is looking to the U.S. public market for sales.
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