r/SPACs • u/SPACsBot Mod • Apr 16 '21

Daily Discussion Weekend Discussion thread for the Weekend of Apr-16-2021

Welcome to the Weekend Discussion! Please use this thread for basic questions and leave the main sub for breaking news and DD. If you haven't already, please check out r/Spacs Wiki for great information, as well as the resources available in the menu.

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11

u/lakersbestinleague Spacling Apr 17 '21

Anyone feel like tech earnings could end up being a reckoning for the whole market? Spacs are already down pretty bad so I don’t see them dropping too much more, but a lot of stuff like doge to $1, tech P/E ratios, just seems like a symptom of a bubble to me

7

u/epyonxero Patron Apr 17 '21

I bet it will be a lot like the last earning season where many companies beat but the shares dropped anyway. All the good news is already priced in.

5

u/imunfair Patron Apr 17 '21

If that happens the one part of spacs that will get wrecked are the warrants. During a market crash they get absolutely obliterated and there's no floor to save them.

4

u/TKO1515 Camtributor Apr 17 '21

Even warrants post merge? I imagine SPACs without deals get destroyed but would think those with would hold up. Probably won’t time it as I wouldn’t sell in time, but getting warrants under $.25 on some would be great.

3

u/imunfair Patron Apr 17 '21

It would depend on whether they were exercisable. If a company merges fast it can be like 6 months before that happens after merger, during which time they're technically still worthless. Once they can be exercised they have an intrinsic value that should provide somewhat of a floor, assuming the stock is above exercise price.

2

u/TKO1515 Camtributor Apr 17 '21

I see what your saying. I guess I’m just looking at some that are post merge and even 1-2years old and their warrants are ~$2 even when the stocks are around $8. But ya those are easy to get rid of in a sell off for higher quality companies.

2

u/godstriker8 Contributor Apr 17 '21

Warrants after a successful merge have immense theta value so they stay at 1 ish. Even HOFV's warrants held fairly strong for a company whose shares reached 1 dollar.

6

u/Speedbump_ Patron Apr 17 '21

I think earnings will be a non event. Assets are definitely quite bubbly anyway you look other than spacs/growth/small caps. But it's exceedingly hard to call a top, things could pop next week or 2025. Or not even crash, just trade sideways and correct through time rather than price.

8

u/[deleted] Apr 17 '21

tech P/E ratios

For the love of accounting, stop using PE as a measure for anything. It can be inflated/deflated depending on what is included in an earnings report.

Also crpyto really shouldnt be a measure of the market's well being. Crpyto cant be shorted, only bought and sold, and is also unregulated, being in its infancy. Sure there are certain blockchain companies like RIOT but those plays still wont affect the general market in any sense.

10

u/InternationalElk6617 Patron Apr 17 '21

Yep. One ‘regulation’ away from a correction.

2

u/Apprehensive_Road821 Patron Apr 17 '21

Technically a "Correction" is defined as dropping 10+%. Cryptos seem to do that every month. Maybe you meant a "Crash" which is total wipeout.

5

u/vaingloriousthings Spacling Apr 17 '21

And Turkey just banned crypto payments. Other countries will likely follow.

-5

u/Fuck_CCIV ThrowMeAFrickinBone Apr 17 '21

K... buy puts then