> If you invest in a SPAC at the IPO stage, you are relying on the management team that formed the SPAC, often referred to as the sponsor(s), as the SPAC looks to acquire or combine with an operating company. That acquisition or combination is known as the initial business combination. A SPAC may identify in its IPO prospectus a specific industry or business that it will target as it seeks to combine with an operating company, but it is not obligated to pursue a target in the identified industry.
It's not bad per se, it's just how it works. Like pretty much everything in life the outcome is dependent on the people involved. You're not getting the potential for more upside without the introduction of more risk.
Chamath is currently leading four biotech SPACS: DNAA, DNAB, DNAC and DNAD, each with a stated target, neurology, oncology, organs & immunology. Anyone looking to invest in the SPAC today should consider the likelihood of this happening, the potential targets, and the sponsors history.
Or you can wait for an announcement around a proposed merger, even up to the day the official stock starts being traded.
Again, just depends on risk tolerance. It's nice to least have the option to take part in these deals.
https://www.sec.gov/oiea/investor-alerts-and-bulletins/what-...
> If you invest in a SPAC at the IPO stage, you are relying on the management team that formed the SPAC, often referred to as the sponsor(s), as the SPAC looks to acquire or combine with an operating company. That acquisition or combination is known as the initial business combination. A SPAC may identify in its IPO prospectus a specific industry or business that it will target as it seeks to combine with an operating company, but it is not obligated to pursue a target in the identified industry.