It has been a turbulent period for recent market darling, SPACs, also known as Special Purpose Acquisition Companies. Although SPACs began almost three decades ago, they only recently surged in popularity. In fact, more U.S. companies went public through SPACs than traditional IPOs in 2020. Fir Tree Partners has a long history investing in SPACs, and Managing Partner, David Sultan, joins the conversation to provide some perspective.
In this episode, we define SPACs and how they work, discuss how the current wave of SPACs differs from past waves, and speculate as to whether the current craze is a bubble. Listeners will also learn about the various ways to invest, some of the craziest SPACs to date, and concerns that have brought about scrutiny from regulators.
Chapters
0:00 Intro
0:30 Episode Overview
1:17 Welcome and Fir Tree Introduction
1:44 What is a SPAC?
3:33 When did SPACs first hit the market?
4:15 When did Fir Tree start investing in SPACs?
6:01 How is the current wave of SPACs different from previous waves?
7:51 Why a SPAC versus an IPO?
9:57 What is the incentive for sponsors?
10:51 How can an investor invest in SPACs?
13:20 How can managers invest in SPACs?
16:49 Are we in a SPAC bubble?
19:25 The craziest SPAC to date
20:25 A look at the major industries attracting market attention
22:10 Increased regulatory pressures
24:27 What's next for SPACs?
25:35 Closing thoughts
26:15 Disclosures