𝐒𝐏𝐀𝐂-𝐀𝐭𝐭𝐚𝐜𝐤! Billion-$ IPOs for companies without product have now surpassed […]

𝐒𝐏𝐀𝐂-𝐀𝐭𝐭𝐚𝐜𝐤!
Billion-$ IPOs for companies without product have now surpassed the dot com bubble, thanks to SPACs.
Concept-stage SPACs have supplanted traditional IPOs of late. Due to an SEC loophole, the CEOs of these public companies can make any forward-looking statements about future financial performance that they want — in fact, that’s what they mainly do. They draw investor attention to forecasts of what revenue and profit might be… years in the future.

From the WSJ today: “On average, companies going public with little revenue perform poorly.”
— https://www.wsj.com/articles/spac-frenzy-emboldens-silicon-valley-startups-to-forgo-venture-funding-11614344154

Legendary investor Charlie Munger spoke a bit more colorfully: “I hate this luring of people into engaging in speculative orgies. Robinhood may call it investing, but that’s all bullshit… I don’t participate at all in SPACs, and I think the world would be better off without them.” — https://www.wsj.com/articles/warren-buffetts-annual-letter-is-about-to-land-11614364099