Yeah - Nikola is fraud, I think it’ll go to zero it’s just hard to know when.
This is also the general problem I have with SPACs. The incentives are all wrong.
If you’re a founder and some SPAC approaches you wanting to merge to take you public it means they think they can get a deal from you. They promise price certainty over an “uncertain market”, but if they’re willing to make the deal it’s because they’re betting the market will be good to them.
Why would the founder take that?
They should do their own IPO then if that’s the case or they’re getting ripped off.
Unless their company is fraudulent bullshit in which case they might as well take the SPAC deal and then they can dump their position on the public (after hyping it up of course). Then you can buy your $33M ranch in Utah [0] and retire on the winnings from your successful con.
Founders and SPAC investors cash out rich and the public is left holding the bag.
At best the founder is lazy and doesn’t want to deal with the logistics of a direct listing or IPO and that doesn’t bode well for my impression of the founder either.
I won’t invest in a SPAC and my prediction is that companies that go public via a SPAC will underperform those that go public by other means (especially those that do a direct listing).
This is also the general problem I have with SPACs. The incentives are all wrong.
If you’re a founder and some SPAC approaches you wanting to merge to take you public it means they think they can get a deal from you. They promise price certainty over an “uncertain market”, but if they’re willing to make the deal it’s because they’re betting the market will be good to them.
Why would the founder take that?
They should do their own IPO then if that’s the case or they’re getting ripped off.
Unless their company is fraudulent bullshit in which case they might as well take the SPAC deal and then they can dump their position on the public (after hyping it up of course). Then you can buy your $33M ranch in Utah [0] and retire on the winnings from your successful con.
Founders and SPAC investors cash out rich and the public is left holding the bag.
At best the founder is lazy and doesn’t want to deal with the logistics of a direct listing or IPO and that doesn’t bode well for my impression of the founder either.
I won’t invest in a SPAC and my prediction is that companies that go public via a SPAC will underperform those that go public by other means (especially those that do a direct listing).
[0]: https://www.latimes.com/business/real-estate/story/2019-11-1...