In 2020, Special Purpose Acquisition Company (or SPAC) stocks became increasingly popular and it looks like this alternative form of going public is only going to get more popular in 2021. These SPAC deals give sponsors a chance to become dealmakers, it gives companies a chance to go public without having to rely on the traditional IPO process, and it gives mainstream investors a chance to buy at a pre-deal or even what can be considered as a pre-IPO price.
The first SPAC stock article I wrote was on August 6, 2020, and it was about Landcadia Holdings which at that time, was trading for about $12 per share. It has since turned into Golden Nugget Online Gaming (GNOG) and recently traded for over $27 per share. I have since sold that position and increased my focus on other high potential SPAC stocks.
Most investors never get a chance to buy at an IPO price, because unless you have connections and a strong relationship with your broker, many investors are only able to buy a new offering right after it goes public and that often means paying double, triple or even more than the IPO price. A recent example of this is Airbnb (ABNB) which had an IPO price of $68, but surged to around $150 as soon as the stock opened on the first day of trading. When buying a SPAC stock at the typical $10 offering price or even at a premium, investors have been able to participate in some of the hottest stocks of 2020. This includes deals like when Kensington Capital (KCAC) was trading for about $10 per share, which later surged to around $130 per share after the deal closed and the company started trading as QuantumScape (QS).
While 2020 was a big year for
