RUNNING OF THE BULLS
musician (also goes by just one name, Ciara) were involved in raising funds for these shell acquisition companies. While athletes are certainly capable of having other skills (basketball legend Shaq(pictured) has built a solid record as an investor off the court), touting them as headliners for shell companies suggests that some investors have way too much capital burning holes in their pockets. The most worrisome part of this? All but one of the SPACs listed in the article – from a bit more than a month ago – have already gone public, raising hundreds of millions of dollars. There’s just one more sign of the bubble market that hasn’t happened yet...
TOO MUCH MONEY TO GO AROUND... THE SHAQ SPAC
I recently wrote about "kamikaze capital" as a twisted way to invest to try to make a point – rather than to make money. We see that in GameStop Robinhood speculators who want to make a point to hedge-fund managers, even if it costs them their life savings... and we also see it in investing that has social justice or the environment – rather than generating a return – as its main objective. And then there are the celebrity SPACs. (A “SPAC” stands for a special purpose acquisition company, which is essentially a shell company set up by investors with the sole purpose of raising money through an IPO to eventually acquire another
company. SPACs are becoming increasingly popular.) This is an actual headline from February 9 from an otherwise mostly credible investment news website: “5 ‘Celebrity SPACs’ To Consider: Shaq, Serena, Steph, A-Rod And Ciara.” It lists a number of SPACs where sports stars – well-known enough to be identified by one name – and a
While athletes are certainly capable of having other skills, touting them as headliners for shell companies suggests that some investors have way too much capital burning holes in their pockets.
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March 2021
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