OT - Dow plunges 1,175 - worst point decline in history

[C40_guy]

Anybody here playing with SPACs?

I got into one, TRINE, sorta by accident, and it has given me an appetite for more. TRINE acquired Desktop Metals, which looks to have some legs...

SPACs appear to be the current version of reverse IPOs (where a private company purchases a defunct public company shell.) A SPAC is a publicly traded investment company (or fund) that acquires a private company to become its primary business.

Just picked up a few shares of AJAX.U FEAC PSTH SNPR TREBU and GSAH.

A couple have deals in progress, the others are purely speculative.

Here's an interesting article on SPACs...

[kppolich]

Originally Posted by KarlC

We are locked at the IPO price but don't have to buy for a few days, this seams odd but I'll take it.

Let's see what happens stating tomarrow.

Karl, how much ABNB did you pick up? How much do you still have?

[KarlC]

Originally Posted by kppolich

Karl, how much ABNB did you pick up? How much do you still have?

We could only buy 200 shares at $68 thru Airbnb’s Directed Share Program, we don't plan to sell for awhile. We will see how that goes.

How about you ?

.

[verticaldoug]

Originally Posted by C40_guy

Anybody here playing with SPACs?

I got into one, TRINE, sorta by accident, and it has given me an appetite for more. TRINE acquired Desktop Metals, which looks to have some legs...

SPACs appear to be the current version of reverse IPOs (where a private company purchases a defunct public company shell.) A SPAC is a publicly traded investment company (or fund) that acquires a private company to become its primary business.

Just picked up a few shares of AJAX.U FEAC PSTH SNPR TREBU and GSAH.

A couple have deals in progress, the others are purely speculative.

Here's an interesting article on SPACs...

The issue I have with SPACs is the heavy drag of the founders shares and warrants. It closely resembles a founder compensation scheme instead of an investment scheme.

If you look at the S-1, typically in the sections marked Principal Shareholders, Certain Related Party Transactions, you will see the founders are typically awarded a large share block or warrants (10-20%) for the initial $25,000 registration fees. These shares are often called class B, but these convert to listed class A once the deal is done (so a cost price, these are typically $0.01 to $0.04 where they plan to sell shares to the public at $10. Nice gig if you can get it).

The dirty secret in the SeekingAlpha article posted, is the big guys are investing money, but typically this is for the warrants which they acquire for usually $1 or $1.5 which are 10% or 15% out of the money for the stock.

The market is super speculative right now and sure you can make some money riding the waves of this ****, just don't get married to anything.

(It is a bit like SNOWFLAKE, the compensation package of the management team is so heavy, this is a complete joke long term.)

D

[C40_guy]

Originally Posted by verticaldoug

The issue I have with SPACs is the heavy drag of the founders shares and warrants. It closely resembles a founder compensation scheme instead of an investment scheme.

If you look at the S-1, typically in the sections marked Principal Shareholders, Certain Related Party Transactions, you will see the founders are typically awarded a large share block or warrants (10-20%) for the initial $25,000 registration fees. These shares are often called class B, but these convert to listed class A once the deal is done (so a cost price, these are typically $0.01 to $0.04 where they plan to sell shares to the public at $10. Nice gig if you can get it).

The dirty secret in the SeekingAlpha article posted, is the big guys are investing money, but typically this is for the warrants which they acquire for usually $1 or $1.5 which are 10% or 15% out of the money for the stock.

The market is super speculative right now and sure you can make some money riding the waves of this ****, just don't get married to anything.

(It is a bit like SNOWFLAKE, the compensation package of the management team is so heavy, this is a complete joke long term.)

D

Thanks for the insight. I've got some money riding the waves...we'll see if I get soaked.

SNOWFLAKE is an interesting one. Good company, good technology, running as fast as they can. Probably the biggest standalone cloud-based DW available, the primary competitors are all part of tech portfolios (Redshift, BigQuery, ADW), and its a space that has struggled to get enterprise traction. That will come, as organizations continue to move off-prem, but the biggies are better positioned.

Being a boutique has served Snowflake, but as the cloud-based DWs start to take on more mission-critical (versus departmental) workloads, I think the biggies will take more share.

[verticaldoug]

Originally Posted by C40_guy

Thanks for the insight. I've got some money riding the waves...we'll see if I get soaked.

SNOWFLAKE is an interesting one. Good company, good technology, running as fast as they can. Probably the biggest standalone cloud-based DW available, the primary competitors are all part of tech portfolios (Redshift, BigQuery, ADW), and its a space that has struggled to get enterprise traction. That will come, as organizations continue to move off-prem, but the biggies are better positioned.

Being a boutique has served Snowflake, but as the cloud-based DWs start to take on more mission-critical (versus departmental) workloads, I think the biggies will take more share.

In bull markets, investing(trading) on a narrative can work, but longer term, the numbers matter. I see SNOW's competitors being AWS, Goog, MSFT, IBM cloud services. Of these four, google is the smallest at 9 b revenue. SNOW will be 575mm this year and forecasting 1b next year. There costs seem to scale, so they forecasting same amount of money lost with rising revenues.

SNOW had the same mkt cap as IBM which has 22b in cloud revenues, and 47b in total revenues.

AWS is approx 32b and MSFT AZURE is approx 45b in revenue. I think it is a market with strong incumbents.

Hey, but its a bull mkt.

[C40_guy]

Originally Posted by verticaldoug

The issue I have with SPACs is the heavy drag of the founders shares and warrants. It closely resembles a founder compensation scheme instead of an investment scheme.

Yes, saw that in a filing earlier this year. They split in the spring...

Doug, I don't understand something. I bought shares of Trine Acquisition Corp, which then acquired Desktop Metals. Now I own the same number of shares of DM, which is to be expected, and yielding a 50% return on an investment held for three months.

However, TRINE_u is still trading, and I received no shares of it. Is Trine operating like a PE firm, spinning off multiple holdings? I kinda assumed that these blank check companies would be one and done situations.

Just found another one, btw, STIC.U, which is expected to take BarkBox public. An interesting play given the current puppy mania...

[Tony T]

Markets close 2020 at All Time High

[mg2ride]

Originally Posted by mg2ride

Because the professional analyst have it all completely wrong. This was a once in a lifetime driver for this "Crash" and terms like earnings and guidance will have nothing to do with it's rebound. We will likely see another "big" drop (otherwise known as the last, best buying opportunity) but it won't go lower than we have already seen. It will rebound back to within 10% of it's February high by elections and take another small surge after that. By this time next year our 401Ks will be back to all time highs (assuming you didn't panic out and miss the rebound) and those of us that threw some chump change into the market over the last month will EASILY see 100% returns on it.

You read it here 1st.

I have a reminder set for 1 year from now and I will reply to this thread so everyone can tell me how smart I am!

This post was in April 2020 so I'm a tad early and I must admit I slightly under estimated the rebound. How did it work out for those that suggest4d shorting it in April?

[veloduffer]

I don't anyone could have predicted the Fed response and how it quieted the markets. The markets were starting to free fall and liquidity in the credit markets was drying up. Without the Fed intervention and subsequent fiscal package, the economy and markets would have probably mirrored the Financial Crisis in severity.

But the equity markets are still not indicative of the economy, which still has high unemployment, high number of small businesses closing (which provided 44% of GDP pre-COVID) and large number of permanent job losses, particularly hitting minorities and workers over 50. Income inequality is much wider and now we have a more contagious variant of COVID combined with slow vaccine rollout.

For cities like NY and SF, this is an economic depression as only 10% of offices are occupied. All the surrounding eateries and shops are crushed. And with 33% of workers wanting to work from home permanently, a shakeout in commercial real estate is still yet to come.

On a macro level, the fiscal packages are providing survival for recipients but are leaving the US highly indebted and fiscal deficits at record levels; moreover, state and local governments are strapped and will be cutting services (for us roadies we might not see repaving for quite a while). But it had to be done and leaves the US in a vulnerable position.

[Louis]

Originally Posted by veloduffer

But the equity markets are still not indicative of the economy, which still has high unemployment, high number of small businesses closing (which provided 44% of GDP pre-COVID) and large number of permanent job losses, particularly hitting minorities and workers over 50. Income inequality is much wider and now we have a more contagious variant of COVID combined with slow vaccine rollout.

I suppose it does make sense that as a coda to 2020, on one hand we have this type of post (which seems perfectly reasonable to me) and on the other a thread being driven by bitcoin speculation.

And our 401k's and IRAs hang in the balance...

[mg2ride]

After 2 very good days in the market, I'm anxious to see how it reacts to the "insurgence" on our Capital this afternoon. I spent the afternoon buying software companies.

[oldpotatoe]

Originally Posted by mg2ride

After 2 very good days in the market, I'm anxious to see how it reacts to the "insurgence" on our Capital this afternoon. I spent the afternoon buying software companies.

I don't know diddly squat about the market but since congress has 'certified' the electoral college count early this AM..I'm betting it will be bullish...IMHO and all that.

[buddybikes]

I thought the markets would be expecting a split authority but instead bulled after the 2 Georgia D senators won. Now totally confused what to do with my money on the sideline since start of the pandemic.

Congress, new Pres -- get to work we need you

[morrisond]

Originally Posted by oldpotatoe

I don't know diddly squat about the market but since congress has 'certified' the electoral college count early this AM..I'm betting it will be bullish...IMHO and all that.

Have you ever heard the expression - "Buy on Rumor - Sell on News"?

The markets may continue higher for some time (and there still may be profits to be made) but if you expect to make much money on a go forward basis from these levels over the long term (10 Years) you are probably SOL. The valuations are absolutely insane. The same thing happened in 2000.

From 2000-2003 the Nasdaq declined by about 82% from Peak to trough. It took until about 2015 for Investors who held at that peak in 2000 to get back to even.

When we get to extremes you always want to buy what people hate. Back last March - people hated stocks - it was a great time to buy. Now almost everyone loves them(stocks) - which means almost no one left to buy.

Just like back in March there is one asset class right now that people absolutely hate and are convinced will fall in value. This asset was a great buy at this time last year as well. If you have never looked at it before you should consider it as a way to diversify a portfolio and protect yourself if we get a violent or prolonged sell-off.