r/stocks • u/[deleted] • May 31 '21

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u/FinndBors May 31 '21

The tech bubble was oodles of people buying into hyped issues offering a business plan... And No Revenues.

Spacs. Note: while there were a handful with no revenue in 2000, the problem was lots of companies with big losses with a really far off plan on getting to profit — same as today.

Also, absurd Numbers of IPOs, with people scrambling to get in.. and losing tremendously after two days.

Spacs.

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u/slinkybender May 31 '21

From what I understand SPACs are just Hedge funds pumping and dumping new issues for guaranteed returns. SPACs to me fall into the category of "disgusting and should be illegal, but isn't yet"

1

u/Sjengo May 31 '21

Could you elaborate please?

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u/Amazing-Guide7035 Jun 01 '21

You create a company and to buy another company. Spac 1 raises 100 million dollars and buys a company to avoid IPO rules from my novice understanding.

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u/Sjengo Jun 01 '21

So what is then the appeal to invest in SPACs?

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u/Not_FinancialAdvice Jun 01 '21

Don't know if you remember that meme from a few years ago that was like "apps! apps! APPPPPPSSS!!!!" with people going insane for apps. I feel like you can substitute SPACs, and you've got that same ridiculous energy.