Entering text into the input field will update the search result below

Altimeter Growth Corp. 2: SPAC Investing In Tech Companies Alongside A $16 Billion Hedge Fund Manager

Feb. 01, 2021 11:27 AM ETAltimeter Growth Corp. 2 (AGCB)GRAB, GRABW, SPCX11 Comments
Pendulum profile picture


  • Altimeter Capital is a $16 billion investment firm run by Brad Gerstner and has an impressive track record investing in technology stocks.
  • I expect that Brad Gerstner will focus on a high-quality SPAC target because it is important to his reputation that the company succeeds after the de-SPACing process.
  • Altimeter seems to have good access to deal flow and has invested in Expedia, Zillow, Facebook, Uber, AirBnB, ByteDance, AppDynamics, MongoDB, Okta, Twilio, Unity, and Snowflake.
  • AGCB traded down last week, which presents a better entry point.
  • Investors should check out AGC, Altimeter's first SPAC as well.

I am interested in SPACs from high profile sponsors that I followed even before they got in the SPAC game. Furthermore, I prefer sponsors that have access to deal flow in high-growth industries (like technology).

For these reasons, I am interested in the SPACs from Altimeter. The following is an analysis of Altimeter Growth Corp. 2 (NYSE:NYSE:AGCB). AGCB is a new SPAC and its share price traded down amid the volatility last week.

Investment Thesis

1. High Quality Sponsor

Brad Gerstner founded Altimeter Capital and has grown it to $16.3 billion of Assets Under Management (AUM). He is a winner!

The key point is that he doesn't need to do a SPAC. If he invests in a controversial company (such as Nikola) he could face reputation risk, which could impact his main business. For somebody in this position, the bar is high when deciding to go after a target to merge into the SPAC. Furthermore, he has an infrastructure at Altimeter that he can leverage for diligence.

2. Technology Investing Track-Record

Altimeter focuses on investing in technology companies, especially the type of companies that are leading the current market rally. SPACs generally get a pop when they announce a target. However, if the SPAC can find the right target, it can deliver to shareholders for the long-term. The prospectus states:

"Some of Altimeter’s prior investments include Expedia, Zillow, Facebook, Uber, Airbnb, ByteDance, AppDynamics, MongoDB, Okta, Twilio, Unity, and Snowflake."

3. Experienced & Well Connected Board Members

In addition to Brad Gerstner, the board includes the following:

  • Richard Barton - Co-founder & CEO of Zillow, serves on the board of Netflix and Qurate Retail
  • Anu Hariharan - Partner at Y Combinator’s Continuity Fund, focused on growth stage investments. Led investments in: Boom, Instacart, Convoy, Brex, Gusto, Faire, Monzo, Rappi, Vouch, Snapdocs and Groww.

This article was written by

Pendulum profile picture
I am an investor and operator in private companies. I mostly write about stocks in my personal portfolio or on my watch list. Currently, I cover the following themes:1. Airlines and the rebound from COVID-19 (see articles about LUV, DAL, UAL, AAL, JETS)2. Long-term compounders (see articles about AWK)3. Market dynamics (see articles about SPY)4. SPACs (see articles about AGCB)5. Special Situations (see articles about XSPA)It's great to get comments and feedback from readers. I look forward to hearing from you!

Analyst’s Disclosure: I am/we are long AGCUU. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I am also long SPCX. I may trade any of the securities mentioned in this article at any time.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (11)


Can you provide some details on the units? I see they are about a buck higher than the AGC.

Do you know what the premium is for the warrants? They are currently at about $5.40. That’s about 4bucks plus a 1.40 over the ten buck IPO price.

FYI I just saw Gerstner on CNBC and bought and sold AGC on the spike. Then bought the B Spac at 12 which cost me a point on my timing. Looking to get back into AGC if it weakens some more. Most likely via the warrants since it I’ll be first up for a deal. Any info you can provide on the units and warrants would be helpful.  

Thanks, MM62
11 Feb. 2021

Good callout on the potential upside with warrants. I am long both their spacs. I looked up their 424B4 and seems the units have 1 share + one-fifth warrant. Checking my warrant math with you - Say if I buy 5 units and later want to redeem one full warrant....do I pay $11.50 on top of what I paid to buy the five units? At current prices of AGCUU, then the post-merger stock has to trade at $20+ for it to be a good deal. Thoughts?

RickinMiami profile picture
Great ty, spacs are a must ....

Pendulum profile picture

@RickinMiami - Thanks for the feedback!

Yuppp profile picture
Altimeter Capital spacs are high probability of success investments in my opinion. Own both spacs AGC & AGCB plus DGNR which Altimeter has a large stake in (confirmed by your recent purchases chart). Brad Gerstner & Chamath Palihapitiya are buddies and have done PIPE deals on other stocks. Lot of opportunity for access to the best private tech companies out there with their network exposure. Good article.
Pendulum profile picture
@Yuppp - Thanks for the feedback. Good luck!
Are these the first SPACs from Brad Gerstner?
Pendulum profile picture
@Phil007p - I think so, I have only seen the 2 SPACs that I mentioned in the article. If you see another one, please let me know!
Great write up, Spacs give normies a chance to invest along side the best at pre-ipo prices. Not going to last long.. get in now or miss a great opp. I believe DGNS and DGNR are in the same class. I hold IPOE, IPOE, DRNR, DGNS, AGC ,AGCB. BRAD, MARC , CHATMATH - 3 of the best of the best investors in the Valley over the past 10 years. FYI Roblox Raises $520M led by Altimeter Capital and Dragoneer Investment Group
Pendulum profile picture
@btc_guy - Thanks for the feedback! Interesting point about Roblox!
RickinMiami profile picture

@btc_guy Yeah my 7yr old is into Roblox games and testing out the game builder suite the offer for anyone to build mini games on Roblox. To me it looks like the next gen of Minecraft

Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.