We’ve seen some insane moves with SPACs over the last few months which have merged with disruptive companies ranging from EV’s and Fintech all the way up to space infrastructure.

Learn the basics of a SPAC including the key differences between traditional IPOs and SPACs, asymmetric risk-reward opportunity, risks and useful tools to track SPACs.

Here are a few SPACs that I’ll be focusing on for the coming weeks. Not covering the obvious SPACs that have already made a big move as there’s plenty of other resources that cover them.

I’ve highlighted the max downside that the SPAC could go to in case there’s negative sentiment or a general market correction. ‘+ time’ refers to the opportunity cost of capital which is a major risk associated with SPACs as you could be waiting for months for a positive merger announcement. During this time, an investor could have yielded better returns from other investments.

Time > Money

1. Reinvent Technology Partners Z (RTPZ)

Team: Reid Hoffman (Co-founder and Former CEO, LinkedIn; former CEO, Paypal; Partner at Greylock), Mark Pincus (Chairman and former CEO, Zynga)

Target industry: Consumer Internet, Mobile Gaming, Tech

Current Price: $11.85USD. Max downside- 15.6% + Time

Thesis

Paypal Mafia needs no introduction in Silicon valley. The founding team of Paypal which included Peter Thiel, Elon musk, Mac Levchin has 3 Billionaires and many more millionaires. Reid Hoffman with a was once the most connected man in Silicon Valley and co-founded Linkedin before making over 80 angel investments including Facebook, Zynga, Flickr, Digg and Last.fm.

The core philosophy of this company is reinvention. Invention is when companies invent core products such as Netflix starting off with the DVD market and then reinventing their entire identity by dominating the streaming market. These cycles of inventing and reinventing products and services are nothing new to Reid Hoffman and Mark Pincus. They aim to partner with one of many tech companies set to go public and help it flourish by integrating their decades of expertise within the company.

Global internet users is set for explosive growth in the coming years, especially in the emerging economies. The majority of them will be on mobile.

2. dMY Technology Group, Inc. III (DMYI)

Team: Niccolo de Masi (CEO of DMYT, DMYD), Harry You (former CFO of Oracle and Accenture), Darla Anderson (Producer, Netflix)

Target Industry: Mobile Apps, Consumer Internet, Tech

Current price: $11.22USD. Max downside- 10.9% + Time

Thesis

dMY Technology Group has a great track record with SPACs. dMY Technology Group I merged with Rush street interactive(NYSE: RSI) which is currently trading at $24.24(141.30%). Their second SPAC, dMY Technology Group II (DMYD)has announced a merger with Genius sports brand, a leading provider of sports data and technology powering the sports, betting and media ecosystem.

DMYI aims to focus its search on companies in the space of Artificial intelligence(AI), machine learning(ML), cloud infrastructure and quantum computing in the approximate valuation of $1 Billion to $3 Billion USD.

3. DPCM Capital, Inc.(XPOA)

Team: Emil Michael (former Chief Business Officer, Uber), Dr Eric Schmidt (former Google CEO and Chairman, former Exec Chairman, Alphabet), Peter Diamandis.

Target industry: North American-based tech with an enterprise value of $1 billion to $2 billion.

Current price: $10.73USD. Max downside- 6.8% + Time.

Thesis

As there are no announcements yet with this merger, the bet will be entirely on the management and their past track record.

Emil Michael has Built 3 successful companies including Tellme Networks, Klout and Uber. His investments in Bird, Codeacademy, Docker, Stripe and SpaceX are a testament to his extensive experience in discovering high growth tech businesses.

Dr Peter Diamandis sees the future as no one else does. His books including ‘The future is faster than you think’, ‘Abundance’ and ‘Bold’ are some of the best books written on how the future of humanity will look like. ‘Future is faster than you think’ has more investing ideas than any other investing book I’ve ever come across.

“The world’s biggest problems are the world’s biggest market opportunities. And that’s a huge thing. Solve hunger, literacy and energy problems, get the gratitude of the world and become a billionaire in the process.” — Peter Diamandis

4. Zanite Acquisition Corp (ZNTE)

Team: Kenneth Ricci (Principal, Directional Aviation Capital), John Veihmeyer (former Global Chairman, KPMG International; Director, Ford Motor), Larry Flynn (former President, Gulfstream Aerospace)

Advisor: Ronald Sugar (former Chairman and CEO, Northrop Grumman; Chairman, Uber; Director of Apple, Chevron, Amgen)

Target industry: Aerospace & defence and sustainable aviation with an Enterprise Value of $750M+

Current price: $10.76. Max downside- 7.1% + Time

Thesis

Combating climate change is one of the biggest focus areas of the new president, Joe Biden. Adopting a clean energy future to ensure that the US archives a 100% clean energy economy and net-zero emission by 2050 will mean that the aviation sector will have to actively work towards reducing pollution from current levels.

A team with former executives from Ford Motor, Apple, Northrop Gruman and KPMG would have the required relationship networks to discover opportunities that are usually inaccessible to retail investors.

5. Hudson Executive Investment (HEC)

Team: Doug Braunstein(Founder, HEC; former CFO JP Morgan Chase), Doug Bergeron( Former CEO, Verifone systems)

Target: Talkspace, an online and mobile therapy company

Current price: $11.61USD. Max downside- 13.9 % + Time.

Thesis

Talkspace offers services to link therapists and patients via video or text chat. The company uses machine learning and artificial intelligence to continually improve session quality and provide a better experience for customers.

Talkspace also has a partnership with United Health Group, a leader in healthcare insurance in the U.S.

The impacts of a rollercoaster year in 2020, excessive social media and digital exposure can have negative impacts on mental health. Meeting a mental health specialist face to face has many barriers including stigma and public perception but having access to services anytime through the mobile application could become normal in the coming years.

Talkspace also has the potential for an acquisition by a listed healthcare company such as Teladoc or Amwell. As the secular trend in virtual healthcare, large companies could serve more patients if they acquire a company like Talkspace by tapping into their existing infrastructure and networks.

Talkspace is also Endorsed by singer Demi Lovato and 28-time Olympic medalist Michael Phelps.

Let me know your comments below.

Feel free to reach out on Twitter for more information on SPACs and investing.

Enjoy the ‘Return of the SPAC’.

References

dMY Technology Group Inc. I — dMY Technology Group, Inc. (2021). Available at: https://www.dmytechnology.com/investor-materials

(2021) Sec.gov. Available at: https://www.sec.gov/Archives/edgar/data/1821742/000121390020031251/fs12020a1_dpcmcapital.htm#T8

Spac Track (2021). Available at: https://spactrack.net/

Special Purpose Acquisition Company (SPAC) — SPACInsider (2021). Available at: https://spacinsider.com/

Reinvent Technology Partners Z (RTPZ) Stock Price, Quote & News | Stock Analysis (2021). Available at: https://stockanalysis.com/stocks/rtpz/