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Comment by boringg | Hacker News Reader

Any successful SPACs out there?

Not really. You just have to ask yourself why these private companies were even going the SPAC route rather than do a regular IPO. The answer was usually that these were not particularly great companies, and doing an IPO means the company is put under a lot of scrutiny. SPACs are a way to avoid that, so insiders can cash out.

Or they were high capital low margin businesses. There are many of these out there, like defense or airline businesses. We need them to exist, but investors don’t like them because it’s harder to make money from them. It doesn’t mean the business is bad, it just means payoff is longer. SPACs are one of the few ways they can get money.

So then what are the high capital low margin businesses that are forgoing a traditional IPO and using a SPAC instead?

The vast majority of businesses are high capital and low margin by HN standards. Plenty of them IPO just fine.

Defence is a different beast, and not necessarily low margin neither. Airlines as well, except the margin are tighter there. Since both industries are rather well understood by investors, IPOs and general investment are not that much of a problem.

All those companies relying on VC money to grow by selling dollars for dimes, in hopes of dumping the whole thing on retail investors through an IPO, well, those are in a lot of trouble now. As are those in need of a lot of capital to develop products, e.g. expensive hardware, that don't have a clear path to releasing a product to the market so far.

Why would it be different to raise money through a SPAC if you're capital intensive?

One that I know of is Wheels Up. It's a membership company for flying privately.

Private flights are insanely expensive, so at least there's a need. Unfortunately, there are also pretty high costs. No idea what Wheels Up financials look like.

UP probably not the best example of a successful public offering: https://www.google.com/finance/quote/UP:NYSE

where do I say it was successful?

that was an answer to "not really"

You were replying to a comment asking “Ant Successful”, so…

Draft Kings is probably one, depending on your definition of successful (and maybe your feelings about heavily advertised gambling).

There are some that are successfully moving lots of money from one set of parties to another under shady circumstances.

Successful for who? Aren't a lot of them structured so specific parties basically can't lose?

See: Chamath

SKIN - still trading above NAV post-merger despite all the market turmoil. It's not one of the "sexy" SPACs in EVs and stuff though, they make beauty products and most of their business is consumables for those products.

You gotta love companies with a solid business, clients and products, don't you?

It depends on your time horizon. Lots of people deride Chamath's SPACs, but several of them traded well above their initial $10 price for 1.5+ years until the market started dropping at the beginning of this year.

> Lots of people deride Chamath's SPAC

That is because he is a shyster.

Con artists make money and are equally as deserving of derision as people who go broke.

Archaea Energy ticker LFG. Sold to BP for $4 billion

I think RocketLab qualifies.

> I think RocketLab qualifies.

They look pretty good, but I think it's responsible to hold off on calling them a success until they launch Neutron. From what I can tell, it's not very likely that they can be profitable with just Electron.

They're a heck of a lot more than Electron at this point. They're really in the satellite parts business at this point, with launch services as a side business. For the last two quarters, they made almost 2x as much on "Space systems" (solar panels, busses, etc) as they did on launch services. Launch is nice and visual so it gets all the attention, but it's only 1/3 of their revenue.

Source: https://s28.q4cdn.com/737637457/files/doc_financials/2022/q3...

MP Materials is trading well above its IPO price. That said, there were some shareholder lawsuits earlier this year, alleging various sketchy things.

If anyone is interested here's the lawsuit. https://thebrios.com/wp-content/uploads/2022/02/2022-02-22-B...

You could make a case for blue owl capital

Enovix (ENVX) is promising. It's the only one I kept some money in.

Hostess decided to SPAC.

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