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Buy DMYQ.U, the best new SPAC opportunity, after its $10 IPO this morning. Units will be available in the secondary market by noon. If you have a problem finding them, just ask your broker (instead of asking this author).
$300 million dMY Technology Group, Inc. IV (DMYQ.U) trades for the first time on Friday, March 5, 2021. When you buy a unit, you get a share of equity, upside in the form of a fifth of a warrant that you can exercise later for $11.50 and downside protection in the form of $10 of trust value. They describe their target as,
Companies that have created, or enabled the creation of, compelling mobile app experiences with significant growth in segments such as gaming, entertainment, education, work productivity, e-commerce, financial technology, and health and wellness, as well as companies developing disruptive and key enablement technologies for consumer-facing apps in these segments, such as artificial intelligence ("AI"), machine learning ("ML"), cloud infrastructures and quantum computing, as well as environmental, social and governance ("ESG")-focused businesses and companies developing satellite and space rocket technologies.
CEO Niccolo de Masi is one of the most experienced and successful SPAC sponsors of all time. He is in the very top tier of SPAC sponsors. He was named CEO of Glu (GLUU) in January 2010 and subsequently also served as chairman. Investors did extremely well under his leadership.
When he got there, shares traded for around $1. Today, Electronic Arts (EA) is buying the company for $12.50 per share in all cash. The deal is scheduled to close sometime in June.
Niccolo was hired as president of products and solutions at Resideo (REZI) in February 2019. Investors have made about 24% since then.
dMY is my favorite SPAC sponsor. Their prior deals have earned them a lot of confidence. dMY Technology Group, Inc. (DMYT.U) deSPACed Rush Street Interactive (NYSE:RSI). IPO investors got a share and a half of a warrant for $10. Today, the shares are at $16.16 and the warrants are at $4.52, so IPO investors made over 84% on our original investment.
dMY II (DMYD.U) closed at $16.05. They are deSPACing Genius Sports.
dMY Technology Group, Inc. III (DMYI.U) is in talks to deSPAC IonQ to make one of the very first public quantum computing companies. Investors are likely to include Silver Lake, Michael Dell, and Bill Gates. Shares last traded at $12.66.
Your downside is protected by $10 of cash in their trust.
In the past, this sponsor has made investors almost 10x our money on GLUU, over 80% on the first dMY SPAC, over 60% on the second and over 25% on the third so far. The average SPAC performance is over a 50% return. The sponsor's corporate history goes back further and has an average return of over 500%.
Your potential risk is pennies and potential reward is dollars. Today is the best time in months to buy SPACs and this is today's best. If you own only one SPAC, it should be this one.
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This article was written by
Chris DeMuth Jr., is founder of event driven hedge fund Rangeley Capital. Its strategy is to invest in mispriced securities with limited downsides and corporate events that unlock shareholder value. Rangeley exploits the seams between other hedge funds’ mandates.Chris runs the investing group Sifting the World, in which he shares his best ideas, deep research, extensive resources and real time updates as investments play out. The group contains an experienced community that shares specialized knowledge when members have local knowledge of opportunities under discussion. Learn more.
Analyst’s Disclosure: I am/we are long DMYQ.U. 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.
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.