Sumary of Here's the Biggest Predictor of a SPAC's Success:
- When it comes to investing in special purpose acquisition companies, or SPACs, there is no shortage of choices.
- com contributor Matt Frankel, CFP, and Industry Focus host Jason Moser talk about the one factor that is turning out to be the best predictor of long-term SPAC returns.
- Jason Moser: Matt, we talk a decent bit about SPACs on this show, we even ran a four-part series on SPACs earlier this year.
- But this data from Wolfe Research says that on average, SPACs with experienced sponsors record greater returns since by sponsors, that’s the blank check company that’s bringing the actual business into its universe, to bring it public.
- In 2018, there were 46 SPACs that went public, in 2019 there were 59, in 2020 there were 248. Moser: Holy cow.
- It used to be that when you were a SPAC sponsor, it’s because you knew something about the business or the industry you were trying to go after.
- Moser: I was going to say it doesn’t even feel like you really need that credibility.
- Moser: Or Papa John’s (NASDAQ:PZZA) maybe I could see at least some pizza place because he sits on the board of Papa John’s I think still- Frankel: He owns a lot of Five Guys.