In this article, we discuss the 10 best cheap SPACs to buy according to Reddit. If you want to skip our detailed analysis of these SPACs, go directly to the 5 Best Cheap SPACs to Buy According to Reddit.
Special Purpose Acquisition Companies (SPACs), perhaps one of the biggest earners in the stock market over the past year and a half, have been steadily losing traction in the finance world over the past few weeks as more startups opt for direct listings or a traditional IPO on the market. In the past eighteen months, there were more than 600 SPAC-facilitated mergers that generated over $195 billion, according to data compiled by SPAC Research, an online publication tracking the performance of special purpose companies in the United States.
As of July 13, there are a total of 577 active special purpose firms in the US with a total trust size of $177 billion. Out of these, 422 SPACs are still searching for mergers while 154 have signed definitive agreements with startups that aim to go public soon. Some of the biggest names in the market, like Masayoshi Son of SB Management and David Einhorn of Greenlight Capital, have loaded up on SPAC stocks in the first quarter of 2021, betting hundreds of millions on these special companies to deliver record returns.
The top SPAC picks of Son can be accessed here while those of Einhorn are available on this link. Even as these legendary investors bet big on SPACs, there is reason to exercise some caution about the future of special purpose companies in the market as the reopening of the economy changes business dynamics. Firms who preferred going public through SPACs in 2020 might think twice about doing so in 2021 as other avenues for raising capital open up, investor sentiment cools, and the SPAC market becomes more saturated.
Another possible factor influencing SPACs this fiscal year will be retail investor interest. According to a study by Goldman Sachs, retail investors are going to spend close to $400 billion on equities in 2021. Most of these investors use internet platforms like Reddit as their primary source of information about the world. These Redditors have been the biggest influencers in the market over the past six months. As such, following Reddit forums to track the latest SPACs occupying the interest of these investors is a good exercise for research purposes.
Some of the big names to go public in the past few months through merger deals with special purpose acquisition companies include DraftKings Inc. (NASDAQ: DKNG), ChargePoint Holdings, Inc. (NYSE: CHPT), Virgin Galactic Holdings, Inc. (NYSE: SPCE), Nikola Corporation (NASDAQ: NKLA), and Opendoor Technologies Inc. (NASDAQ: OPEN), among several others. These firms have market valuations in billions and will likely deliver investors handsome returns in the coming weeks and months.
The finance world is evolving. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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With this context in mind, here is our list of the 10 best cheap SPACs to buy according to Reddit. These companies were ranked keeping in mind the hype around them on Reddit, the funds they raised at their initial public offering, and the mergers they are presently involved in.
Best Cheap SPACs to Buy According to Reddit
10. Altitude Acquisition Corp. (NASDAQ: ALTU)
Altitude Acquisition Corp. (NASDAQ: ALTU) is a special purpose acquisition company that is run from Georgia. It is placed tenth on our list of 10 best cheap SPACs to buy according to Reddit. The firm went public in December 2020, managing to raise close to $300 million from the initial offering. It focuses on mergers with companies working in the travel and tech businesses. The CEO of the firm is Gary Teplis.
Altitude Acquisition Corp. (NASDAQ: ALTU) has a market capitalization of over $366 million. The 52-week price range of the stock is between $9.6 and $14.4. The firm is still searching for a merger deal.
The blockbuster IPOs of DraftKings Inc. (NASDAQ: DKNG), ChargePoint Holdings, Inc. (NYSE: CHPT), Virgin Galactic Holdings, Inc. (NYSE: SPCE), Nikola Corporation (NASDAQ: NKLA), and Opendoor Technologies Inc. (NASDAQ: OPEN) were facilitated by SPACs much like Altitude Acquisition Corp. (NASDAQ: ALTU), one of the best cheap SPACs to buy according to Reddit.
9. RedBall Acquisition Corp. (NYSE: RBAC)
RedBall Acquisition Corp. (NYSE: RBAC) is a special purpose acquisition company based in New York. It is ranked ninth on our list of 10 best cheap SPACs to buy according to Reddit. The company went public in August 2020, raising over $575 million from the initial offering. The firm mainly concentrates on mergers with companies working in the sports, media, and data analytics fields in the United States.
RedBall Acquisition Corp. (NYSE: RBAC) has a market capitalization of over $704 million. The CEO of the firm is Alec Scheiner. The 52-week price range of the company’s shares is between $9.7 and $12.4. The average volume of the stock is 220,868. The special purpose firm is still searching for a deal for a merger.
SPACs helped DraftKings Inc. (NASDAQ: DKNG), ChargePoint Holdings, Inc. (NYSE: CHPT), Virgin Galactic Holdings, Inc. (NYSE: SPCE), Nikola Corporation (NASDAQ: NKLA), and Opendoor Technologies Inc. (NASDAQ: OPEN) to go public through record initial offerings, and RedBall Acquisition Corp. (NYSE: RBAC), one of the best cheap SPACs to buy according to Reddit, could soon follow their lead.
8. Lefteris Acquisition Corp. (NASDAQ: LFTR)
Lefteris Acquisition Corp. (NASDAQ: LFTR) is a special purpose acquisition company headquartered in Boston. It is ranked eighth on our list of 10 best cheap SPACs to buy according to Reddit. The company concentrates on initial public offerings related to the financial technology sector. It went public in October 2020 and raised more than $207 million from the offering. The CEO of the company is Karl Roessner.
Lefteris Acquisition Corp. (NASDAQ: LFTR) is still searching for a merger deal. The stock has a 52-week price range between $9.6 and $12.4. The average volume of the stock is 66,452. Morgan Stanley is the left lead on the special purpose firm. The company has a market capitalization of $252 million.
Lefteris Acquisition Corp. (NASDAQ: LFTR), one of the best cheap SPACs to buy according to Reddit, is aiming to replicate the success of firms like DraftKings Inc. (NASDAQ: DKNG), ChargePoint Holdings, Inc. (NYSE: CHPT), Virgin Galactic Holdings, Inc. (NYSE: SPCE), Nikola Corporation (NASDAQ: NKLA), and Opendoor Technologies Inc. (NASDAQ: OPEN) on the open market.
7. Dune Acquisition Corporation (NASDAQ: DUNE)
Dune Acquisition Corporation (NASDAQ: DUNE) is a special purpose acquisition company run from Florida. It is ranked seventh on our list of 10 best cheap SPACs to buy according to Reddit. The firm targets mergers with other companies in the software as a service sector. It went public in December 2020 and raised more than $172 million from the offering. The CEO of the firm is Carter Glatt.
Dune Acquisition Corporation (NASDAQ: DUNE) is still searching for a merger to facilitate an initial public offering. The 52-week price range of the stock lies between $9.5 and $10.2. It has an average volume of 35,153. It has a market capitalization of $131 million. Cantor Fitzgerald is the left lead on the firm.
SPAC-facilitated IPOs of DraftKings Inc. (NASDAQ: DKNG), ChargePoint Holdings, Inc. (NYSE: CHPT), Virgin Galactic Holdings, Inc. (NYSE: SPCE), Nikola Corporation (NASDAQ: NKLA), and Opendoor Technologies Inc. (NASDAQ: OPEN) are proof that companies like Dune Acquisition Corporation (NASDAQ: DUNE), one of the best cheap SPACs to buy according to Reddit, can also follow their lead.
6. Burgundy Technology Acquisition Corporation (NASDAQ: BTAQ)
Burgundy Technology Acquisition Corporation (NASDAQ: BTAQ) is a special purpose acquisition company based in Cayman Islands. It is placed sixth on our list of 10 best cheap SPACs to buy according to Reddit. The company went public in August 2020 and raised more than $345 million from the initial public offering. It targets mergers with firms working in the technology sector and based in Europe, the US, or Israel. It presently has a market capitalization of close to $436 million. The CEO of the company is Leo Apotheker.
Burgundy Technology Acquisition Corporation (NASDAQ: BTAQ) is still looking for a merger partner. The 52-week price range of the stock is between $9.6 and $11.9. It has an average volume of 209,441. The company is closely following crypto startups and could aim for a merger with a crypto firm in the coming weeks and months.
DraftKings Inc. (NASDAQ: DKNG), ChargePoint Holdings, Inc. (NYSE: CHPT), Virgin Galactic Holdings, Inc. (NYSE: SPCE), Nikola Corporation (NASDAQ: NKLA), and Opendoor Technologies Inc. (NASDAQ: OPEN) chose the SPAC route to go public, and Burgundy Technology Acquisition Corporation (NASDAQ: BTAQ), one of the best cheap SPACs to buy according to Reddit, is looking for a merger deal on similar lines.
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Disclose. None. 10 Best Cheap SPACs to Buy According to Reddit is originally published on Insider Monkey.