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Two SPACs that hit that list were Chamath Palihapitiya's Social Capital SPACs and former Citigroup exec Michael Klein's Churchill Capital Corp IV (Robinhood restricted purchasing to a single share).

For those interested in SPACs there's another forum on Reddit which is also catching attention. r/SPACs, a rapidly-expanding community which counted more than 99,000 members as of Tuesday afternoon, has been a great treasure trove of innformation for retail investors. Two of it's moderators reported Monday that they are running a forum that's markedly different from WallStreetBets. For one, r/SPACs is dedicated to sharing intel about a different kind of company than r/WallStreetBets.

"SPACs have had a pretty significant momentum since the beginning of the pandemic," said Gal, 29, one of the moderators that operates under the username u/Masculiknitty.

"There's just been a steady increase in the number of SPACs and the volume of their trading, just consistently since basically April."

Jon, 32, the other moderators who spoke with reporters operates under the handle u/NoeticOptions. The r/SPACs forum first emerged in May 2020 (r/WallStreetBets dates back to 2012).

SPACs are, essentially, roving, publicly-held engines of capital that exist to buy private companies and bring them onto public markets. In 2020, there were a record 248 SPAC IPO's with an average IPO size of nearly $335 million. For comparison, there were just 59 SPAC IPO's the year prior, in 2019, with an average IPO size of $230 million. Now, just over one month into 2021, there have already been 96 SPAC IPOs, with an average of $291 million each. Goldman Sachs projection estimated that SPAC mergers could drive as much as $300 billion in M&A activity in 2021.

"Up until 2020, they were viewed negatively as kind of like a back-door method of getting into the stock market," Jon said. "Now, it's a little bit different, because the IPO process is unable to accurately give a price target for a lot of these companies," he added (referring to companies like Airbnb and DoorDash).

"If you're knowledgeable enough about SPACs and you understand options — or even if you don't — you can find these very profitable, asymmetric risk-reward profiles, that you can make a significant amount of money," Jon said.

Before a SPAC does an acquisition, called "de-SPACing", traders can buy into it for a relatively low share price, which typically hovers around $10 per share. (some SPACs like Bill Ackman's Pershing Square set their IPO price for $20 per share, but those are a rare.)

Prior to de-SPACing, traders have the option to redeem their shares at the original net asset value, with a bit of additional interest on top of it. This makes buying SPACs almost as riskless as holding cash. Additionally, SPAC shares are generally issued with warrants that later on can be traded. If investors don't like the acquisition target they can ask for their money back but keep the warrant.

Institutions like Goldman Sachs, SoftBank, and Richard Branson's Virgin Group have been among the many to raise hundreds of millions of dollars for SPACs of their own.

"Especially in the last month, at IPO, a lot of these newer SPACs that have very well-renowned management teams are actually trading already significantly above the net asset value," he said. "It's the belief that those management teams have the connection to engage in a very lucrative merger," Jon said.

"People really underestimate how intelligent these retail investors are," Jon said, adding later: "The power of crowdsourcing in Reddit in general, and, in particular, our subreddit, is going to be far and away better than any analyst or group of even 10 analysts."

"It's all basically mirroring the hot sectors that are concurrent to the market," Jon said, naming markets like electric vehicle and green technology, cannabis, and financial technology. Palipahpitiya's SPAC Social Capital Hedosophia Holdings Corp V agreeing to taking personal finance app SoFi public at a $9 billion valuation comes to mind. Personal-finance app MoneyLion going public through Fusion Acquisition Corp. is another.

Gal and Jon said they're taking measures to clamp down on attempted "pumps and dumps" when they do arise.

r/SPACs' users quickly spot and flag questionable posts that make claims about SPACs which aren't backed up by trustworthy sources like news articles, market research, or other verifiable sources, like a company announcement, the moderators said. Then, those posts can be swiftly removed.

Gal explained "We want it to be: 'Here's the news of the day for SPACs; this merger was announced,'" he said. "We don't want that announcement to be a thousand times in people's face, because that has a psychological effect."

"It has this effect of like, 'Oh, everyone's posting about it. It must be something I should buy,'" he said.

Those who break the rules multiple times could finds themselves eventually removed from the group through a strike system that the moderators are building.

The group forbids "uninformed or brazen speculation," too. "If you think you have big info, please bring the facts to support it," it says in another guideline. "The burden of proof is on you."

While the r/WallStreetBets has become a profanity ridden and other offensive commentary "it's literally their language," the flagrant uncouth language won't be tolerated in r/SPACs'.

"We've banned the use of those words," Gal said.

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