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April 3, 2021 SPACs have so dominated Wall Street thinking this year that they are now the stuff of memes and ironic t-shirts. Thanks to their burst in popularity with celebrity and retail investors alike, more than half of companies that went public last year happened through a SPAC. But the promise of these unconventional investment vehicles of bigger, more efficient returns on a shorter timeline than traditional IPOs may be starting to fall short. Also termed blank-check companies, SPACs are shell companies that take private firms public by raising money on an exchange and then merging with or acquiring them to take their place on the exchange. It’s a back door for private firms to go public without bothering with the tedious IPO or direct listing process. Recent data on the trajectory of SPAC acquisitions show a strong run-up in the number and size of those deals last year, followed by a steep one-month drop-off in March. The number of deals fell more than 50% be ....
Investors are viewing the recent slump and volatility in SPAC names differently, and some of them have placed massive shorts on high-profile SPACs. ....
Us and them XLFleet is being sold on a blue-sky story, with exponential growth in sales estimates, Block said, justified by a $1.4 billion sales estimate in 2024 that he called a joke. In talking to former employees, the hedge fund has found this estimate has been created using an order backlog worth $200 million, he said. That backlog is greatly misrepresented. I mean maybe even to the point where you call it an outright lie, he said, adding: We can extrapolate that this $1.4 billion is just farcical. He said: What we learned from talking with three former salespeople is that they keep track of leads in Salesforce. If they have an initial call, they re told by their sales managers to put in an exaggerated probability of that closing, along with a really optimistic to the point of being ludicrous number of potential units. ....