SPAC & IPO Ideas

Dr.Retarded said:

Will you let us know when the next dip happens or what you think is a viable option. I wouldn't mind trying to get back into it.

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CCIV is a tough bitch to nail down because it is all being driven by hopium right now. You cant model fomo. If it gets the Lucid deal it could run up a ton more. If it doesnt get it, it could dropback down to $10. Seriously $10. It was just above $10 when they were in the running for DirecTV. The chart doesnt really help because the entire stock price is about the Lucid rumor. I have bought it at $10.02 and sold it a week later at $16.41. No regrets. When it kept running, I played it with options and have done so since. I made more selling puts on the stock than I did the 60% I made on the stock.

At this point I would only play it with options selling puts. The implied volatility makes the premium a better investment than the stock. I got paid $3 to write the $20 strike puts expiring 3/19. That premium means I am profitable all the way down to a share price of $17. On the stock side to make that $3 return you need a 10% run up after purchase. My advice is to write way out of the money puts and if it keeps going up just keep closing them out for pennies and writing more. This chart is not something I am buying into.

Dr.Retarded said:

Goddamit. I cashed out I think it was earlier in the week for a nice little profit but Jesus Christ. Still, that's not near as much of a potential profit that Big Phoenix had with SNDL.

I feel for ya buddy. You could have bought that pallet of 556 with those tendies.

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I missed around $150k on SNDL over the past week and a half or something like that.
Whatever 45,000 shares at $1.12 translates to $4 or whatever it was AH that one day.

Rais said:

reading some of your posts I had picked this up at like 24. I’m still trying to learn the warrants and stuff. If CCIV does hit the jack pot with Lucid, wouldn’t it be worth it to hang on through the ipo and hold on to the warrants and then cash in? I think if it goes through it’s going to be regarded like Tesla.

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TheBeagle said:

This is what I did when it first broke through $30. All my shares now are on house money, but I really want to be able to look at my retirement account in ten years and see shares of Lucid sitting there at a cost basis of $10.20.

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Fogel said:

Sure, that's possible, but the reverse is possible too. If you have faith that it can be the next tesla at least protect your profits and sell enough to cover your buy in, then you can ride the rest of the shares on essentially free money.

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I am gonna pull a Vanessa and multi-quote.

The in-and-out SPAC moves (buy as low to $10 as possible and get out between $15 and $20 or so) is the normal SPAC trade. Now, one reason I stress doing due diligence on the companies they merge with is you might find a gem in the slop. I thought GMHI/LAZR was one of those and planned to hold it as a long term investment. I got cute and sold covered calls on my position and got assigned. I have plans to buy back in but the price never came back down. I keep following it and once I see their first earnings report I will make some decisions. Same with FVAC/MP. Same with NFIN/TRIT. There are some quality companies merging to go public. The vast majority are trash though. Or at least no where near ready to be publicly traded companies. You really should always dig into the companies that are SPAC-ing.

As to warrants... Think of warrants as stock options. If you own 100 warrants, you own the right to exchange those 1:1 for shares in the company at a fixed price (usually $11.50 for almost all SPACs). Now there is a set of criteria the company must meet before being able to call the warrants for exercise. You cant do the swap until they call for them. When you buy units in a SPAC it is composed of both shares and warrants so you own those warrants as part of your initial purchase. If on the other hand you buy warrants for lets say $4, they are worthless to you unless the stock price is $15.50 or more at the time of exercise. This is because you paid $4 and you have to pay $11.50 to exchange thus $15.50 is the break even point. Most warrants have a 5-year life, so they are like buying call options with an $11.50 strike and a 5-year expiry. The price of shares and warrants SHOULD stay in tune with each other to a significant degree because one is based on the other. The trick with warrants is you can trade them like stocks but can't exchange them until called for and when called for, they will created a dilution in the share price.

I don't believe in a one-size-fits-all strategy for SPACs. I view the vast majority as flips before the vote for profit. A few however I see as potential ground floor investments in a breakout company.

Furious said:

Hey Sanrith Descartes , could you recommend a good book on options trading for a beginner?

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If you want to get into the Greeks, Blazin recommended something to me. I'll try to find what it was. If you don't know what the Greeks are in terms of options, then skip it for now and focus on the basics. I didnt use a book, I used websites and videos.

What I like about options is the more I learn the more I realize how little I actually know. It'd a deep people and has lots of different moving parts. I would begin with just terminology. I like investopedia for this because you can just search it everytime you see a term you aren't familiar with. Blazin is working on a lot of the basics in the options thread. That's a solid start too.

Conceptually, grab the idea that calls = the right to buy and puts equal the right to sell. You can choose either side of those two option choices (write (sell) or buy). For a football analogy, sellers are always trying to run out the clock. Time is on their side. Buyers are trying to score before before clock runs out. When you write options (either one) you already got paid (are winning) and you want to clock to expire without the other guy scoring (having the option hit the strike price).

I linked a couple of sites and a video or two over in the option thread. Start there. Once you have the basics down, then it's a lot of philosophy. What side of the trade do you want to be on. How much risk versus how much reward. Do you only want to focus on stocks/sectors you are familiar with? It's pretty nuanced.

Jackie Treehorn said:

I missed around $150k on SNDL over the past week and a half or something like that.
Whatever 45,000 shares at $1.12 translates to $4 or whatever it was AH that one day.

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Reading SPAC shit on Twitter is hysterical.
"Dumping <insert random no-deal SPAC here>. I have had it for two weeks and it has barely moved."
"Everyone thinking CCIV to $100? Imma buy in at $40 on Tuesday before it goes higher."
"If NKLA went to $100, CCIV going to $300 no problem."

These people, dear friends, are the ones on the other sides of the trade from you. No pity. No remorse.

Explain to me again why a SPAC with no merger agreement is trading at 300% to NAV?

Sanrith Descartes said:

Explain to me again why a SPAC with no merger agreement is trading at 300% to NAV?

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These people are dumb as fuck and obviously haven’t read anything about how SPACs work. It’s quite amazing really. GME / AMC has created legions of inexperienced future bagholders.

Jackie Treehorn said:

These people are dumb as fuck and obviously haven’t read anything about how SPACs work. It’s quite amazing really. GME / AMC has created legions of inexperienced future bagholders.

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God love 'em

Locnar said:

Those people are going to cost me all of my CCIV shares come Friday that I did a CC with at 35 strike .... this new element of social media crazy , just can't predict anything anymore

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On high vol stuff, you really need to way out of the money unless you don't mind losing it. It's like my KO, I go close because I don't care of I lose it.