In this article, we discuss the 10 best SPACs to buy according to David Einhorn’s Greenlight Capital. If you want to skip our detailed analysis of these SPACs, go directly to the 5 Best SPACs to Buy According to David Einhorn’s Greenlight Capital.
Last year, initial public offerings (IPOs) facilitated by special purpose acquisition companies (SPACs) generated more than $83 billion, according to data compiled by SPAC Insider, a New York-based online publication that focuses on the SPAC market. This amount was double the total amount of money raised through SPAC-linked IPOs in the decade preceding 2020, highlighting a new trend within the finance world. In the first six months of this year, 361 SPAC-facilitated IPOs have already raised over $111 billion.
Startups, who want to take advantage of the relaxed fiscal policies of the federal government and ride the technology bubble dominating the market that has seen company valuations soar, prefer the SPAC method of going public as it offers several benefits over a traditional listing on the market. These benefits include a faster timeline to the IPO – on average, SPAC-linked IPOs take 3-6 months, while traditional ones may take up to two years – and access to operational expertise that leads to the possibility of raising more capital at lower marketing fees.
However, SPACs have been losing traction over the past few weeks amid fears of inflation and warnings to retail investors about investments in celebrity-endorsed shell firms. There is also murmurings about saturation in the SPAC market, with hundreds of new blank cheque companies, as SPACs are otherwise known, spring up across the United States. Direct listings are also becoming more popular. Despite the bleak near-term outlook, big finance has been consistently bullish on SPACs over the past few months.
For example, New York-based hedge fund Greenlight Capital, controlled by legendary investor David Einhorn, has bought stakes in dozens of SPACs in the first quarter of 2021, according to latest filings by the fund. Some of these SPACs and the potential IPOs they are facilitating have been discussed below. Similarly, angel investors like billionaire Chamath Palihapitiya, who was one of the biggest earners from SPAC-linked IPOs last year, has registered several new blank cheques firms over the past few months in anticipation of more business.
Some of the big names in the market who went public through these special purpose companies over the past few months 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 others. Some of these IPOs, according to news publication Forbes, have also created new billionaires. It remains to be seen how SPACs fare for the rest of the year, though it is fair to say they have transformed the IPO game.
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.
With this context in mind, here is our list of the 10 best SPACs to buy according to David Einhorn’s Greenlight Capital. These SPACs were ranked according to the investment portfolio of Greenlight Capital at the end of the first quarter of 2021. Other notable holdings of the firm at the end of March were Twitter, Inc. (NYSE: TWTR) and GoPro, Inc. (NASDAQ: GPRO).
Best SPACs to Buy According to David Einhorn’s Greenlight Capital
10. ACE Convergence Acquisition Corp. (NASDAQ: ACEV)
ACE Convergence Acquisition Corp. (NASDAQ: ACEV) is a special purpose acquisition company based in Delaware. It is ranked tenth on our list of 10 best SPACs to buy according to David Einhorn’s Greenlight Capital. The firm went public in July 2020, raising more than $230 million from the initial offering. It concentrates on mergers with companies working in the technology sector in the United States. The CEO of the company is Behrooz Abdi.
ACE Convergence Acquisition Corp. (NASDAQ: ACEV) has a market capitalization of over $286 million. The company has signed a definitive agreement for a merger with Achronix Semiconductor Corp, a fabless semiconductor manufacturing firm based in California. The semiconductor firm is valued at over $2 billion.
At the end of the first quarter of 2021, Greenlight Capital owned 115,000 shares in ACE Convergence Acquisition Corp. (NASDAQ: ACEV) worth $224,000. This represented 0.01% of the investment portfolio of Greenlight Capital.
Just like the 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) have illustrated, ACE Convergence Acquisition Corp. (NASDAQ: ACEV) could be a top investment in the SPAC market. The success of Einhorn’s strategy is also apparent from his long positions on Twitter, Inc. (NYSE: TWTR) and GoPro, Inc. (NASDAQ: GPRO).
9. Forest Road Acquisition Corp. (NYSE: FRX)
Forest Road Acquisition Corp. (NYSE: FRX) is placed ninth on our list of 10 best SPACs to buy according to David Einhorn’s Greenlight Capital. It is a special purpose acquisition company based in New York. The firm went public in November 2020, raising $300 million from the initial offering. The company focuses on mergers with firms working in the technology, media, and telecommunications sectors in the United States. The CEO of the SPAC is Keith Horn.
Forest Road Acquisition Corp. (NYSE: FRX) has a market capitalization of over $450 million. The firm signed a definitive agreement for a pre-unit split with Beachbody and Myx Fitness, a health and wellness company based in Connecticut. The company is valued at close to $3 billion.
At the end of the first quarter of 2021, Greenlight Capital, which also has stakes in Twitter, Inc. (NYSE: TWTR) and GoPro, Inc. (NASDAQ: GPRO), owned 147,100 shares in Forest Road Acquisition Corp. (NYSE: FRX) worth $395,000. This represented 0.02% of the investment portfolio of Greenlight Capital.
Just like the 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) have illustrated, Forest Road Acquisition Corp. (NYSE: FRX) could be a top investment in the SPAC market.
8. Sports Entertainment Acquisition Corp. (NYSE: SEAH)
Sports Entertainment Acquisition Corp. (NYSE: SEAH) is a special purpose acquisition company based in Florida. It is ranked eighth on our list of 10 best SPACs to buy according to David Einhorn’s Greenlight Capital. The firm went public in October 2020, managing to raise more than $450 million from the initial offering. The CEO of the company is John Collins. It concentrates on mergers with companies working in the sports and entertainment sectors, with key focus on the technology and services sub sectors.
Sports Entertainment Acquisition Corp. (NYSE: SEAH) has a market capitalization of over $567 million. The firm has signed a definitive agreement for a merger with Super Group, an online sports betting and gaming company. The sports firm is valued at close to $5 billion.
At the end of the first quarter of 2021, Greenlight Capital owned 55.976 shares in Sports Entertainment Acquisition Corp. (NYSE: SEAH) worth $547,000. This represented 0.03% of the investment portfolio of Greenlight Capital.
The firm also has stakes in several growth stocks as of the end of Q1, including Twitter, Inc. (NYSE: TWTR) and GoPro, Inc. (NASDAQ: GPRO).
Just like the 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) have illustrated, Sports Entertainment Acquisition Corp. (NYSE: SEAH) could be a top investment in the SPAC market.
7. Property Solutions Acquisition Corp. (NASDAQ: PSAC)
Property Solutions Acquisition Corp. (NASDAQ: PSAC) is placed seventh on our list of 10 best SPACs to buy according to David Einhorn’s Greenlight Capital. It is a special purpose acquisition company based in New York. It went public in July 2020, managing to raise close to $230 million from the initial offering. The company concentrates on mergers with firms working in the real estate services and property technology sectors. The CEO of the SPAC is Jordan Vogel.
Property Solutions Acquisition Corp. (NASDAQ: PSAC) has a market capitalization of over $450 million. It has signed a definitive agreement for a merger with Faraday Future, the California-based technology company that focuses on electric vehicle development. Faraday is planning to go public soon and is valued at close to $3.5 billion.
At the end of the first quarter of 2021, Greenlight Capital owned 284,000 shares in Property Solutions Acquisition Corp. (NASDAQ: PSAC) worth $727,000. This represented 0.05 % of the investment portfolio of Greenlight Capital.
Just like the 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) have illustrated, Property Solutions Acquisition Corp. (NASDAQ: PSAC) could be a top investment in the SPAC market. The success of Einhorn’s strategy is also apparent from his long positions on Twitter, Inc. (NYSE: TWTR) and GoPro, Inc. (NASDAQ: GPRO).
6. Altimeter Growth Corp. (NASDAQ: AGC)
Altimeter Growth Corp. (NASDAQ: AGC) is a special purpose acquisition company based in California. It is ranked sixth on our list of 10 best SPACs to buy according to David Einhorn’s Greenlight Capital. The firm went public in October 2020, raising over $500 million from the initial public offering. It focuses on mergers with companies working in the technology sector in the United States. The CEO of the firm is Bradley Thomas Gerstner.
Altimeter Growth Corp. (NASDAQ: AGC) has a market capitalization of more than $730 million. It has signed a definitive agreement for a merger with Grab, a Singapore-based transport company that is soon going to go public. Grab is valued at close to $40 billion.
At the end of the first quarter of 2021, Greenlight Capital owned 75,000 shares in Altimeter Growth Corp. (NASDAQ: AGC) worth $778,000. This represented 0.05% of the investment portfolio of Greenlight Capital.
Just like the 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) have illustrated, Altimeter Growth Corp. (NASDAQ: AGC) could be a top investment in the SPAC market.
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Disclose. None. 10 Best SPACs to Buy According to David Einhorn’s Greenlight Capital is originally published on Insider Monkey.
