Wwith companies increasingly waiting to go public in many cases, such as Airbnb (NASDAQ: ABNB) and Uber Technologies (NYSE: UBER) have done so, it can be difficult for everyday investors to seize the ground floor of growth opportunities. In this fool live Video clip, recorded on October 18, Fool.com contributors Matt Frankel, John Rosevear and Danny Vena intervene in the SPAC vs. IPO debate.
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Danny Vena: ProShopGuy declares: âand and … invest in support depending on whether or not it is an IPO, a market capitalization, a mega-capitalization or a mid-capitalization. I look at what the opportunity is and whether or not the company can capitalize on this opportunity. get to IPOs I tend to lag a bit behind, I will wait until there is data in general until they have a few quarters as a public company before I think about investing, unless there is a compelling reason to the contrary. think?
Matt Frankel: I agree with that and would say that over the last decade the trend has definitely been for companies to go public later and later in the game, I think Uber, how long have they waited to become public. I feel like the SPAC because it’s the SPAC and IPO show, I feel like the boom in PSPC, if it has a really positive effect, is to bring back the IPO earlier. You see a lot more companies being able to go public at these early stages, which goes against the trend that we have seen for several years. Many of them have worked in the auto industry, as John said. Much like the two that I’m about to talk about, these are just steps before these types of companies could have gone public. If there’s one thing about the 500 SAVS that went public in the past year, it’s a positive change in the market for IPO investors, this is it.
Vena: John, do you want to add two cents?
John Rosevear: Well, I’m going to fall back on some crazy fundamentals, which is that I’m looking for big companies at not crazy prices and prices of $ 400 million in market cap or $ 30 billion in market cap. I’m not that worried, I’m looking for opportunities everywhere. I don’t tend to gravitate towards a specific stock. I have big old industrial cyclical giants in my portfolio, and I have small, nimble emerging tech companies in my portfolio.
Again, I’m just looking for something where I can say, OK, I see why this company has an advantage and it does everything right and so on. In fact, I wouldn’t go into the details of the SAVS, you always have to wonder a little, at least in the automobile, we have had some unfortunate experiences where because when a SAVS does a merger, it can publish future financial forecasts and therefore forward where we saw that some of those projections weren’t actually based on what we thought they were based on.
Vena: On reality.
Frankel: On reality.
Rosevear: Indeed, there is therefore an additional level of caution. The other company I want to talk about as Lucid (NASDAQ: LCID), which has been patient to reach the market. It hit the market via a PSPC deal earlier this year. But this is a company that we myself and my crazy colleagues who have been obsessed with the auto industry have been following for four or five years now. It was a business that was no moonlight, “we’re going to build an electric truck someday” to name just one example from scratch. We have a factory, they actually started production. Their SPAC will close a few months ago and they have started production of their electric luxury sedan with deliveries to customers scheduled to take place like next week. To go back, the type of business matters less than the quality of the business and the quality of the opportunity to me.
Frankel: I would certainly agree with that, with the caveat that there are a lot of companies that have gone public recently and that, like Airbnb, I would have loved to invest in Airbnb three years ago. I would have loved to invest in Uber in 2014 when I first took an Uber ride. You’re letting people in at a late stage of the opportunity, so that’s my only problem with this trend and you’re absolutely right, the PSPC trend has brought some negatives on top of the positives. With projections being one thing, every state-owned company by PSPC believes it will increase its revenue 20-fold next year. Yes. Good and bad.
Rosevear: In electric vehicles. We get it all where they compare to You’re here (NASDAQ: TSLA). They forget that all of the established global auto makers are going to build electric cars as well. So, yeah okay. You are in a space that Tesla is not. Well guess what? Volkswagen comes for this space. What do you think of that? You say, well, we didn’t mention that in our presentation. There is a lot of this selective thinking.
Danny Vena owns shares of Tesla. Jean Rosevear has no position in any of the stocks mentioned. Matthew Frankel, CFPÂ® owns shares of Lucid Group, Inc. The Motley Fool owns shares and recommends Airbnb, Inc., Tesla and Volkswagen AG. The Motley Fool recommends Uber Technologies. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.