Tag: SPAC

Warren Buffett Defends Berkshire’s Moves Over Pandemic Year

Mary Pat Campbell

Link: https://www.wsj.com/articles/warren-buffett-set-to-discuss-pandemic-markets-at-berkshires-annual-meeting-11619887342?reflink=desktopwebshare_twitter

Excerpt:

Warren Buffett defended Berkshire Hathaway Inc.’s investments over the past year, while saving his harshest comments for some of the hottest investment vehicles at the company’s annual meeting.

Speaking onstage from Los Angeles, Mr. Buffett, Berkshire’s chairman and chief executive, and his business partner, Charlie Munger, took questions for roughly four hours. The two men said some special-purpose acquisition companies, day traders and private-equity funds that have driven valuations in both private and public companies to record levels were more gamblers than investors.

“I don’t mind the poor fish that gamble,” Mr. Munger said Saturday. “I don’t like the professionals that take the suckers.”

“It’s a moral failing. It’s not just stupid, it’s shameful,” he said of SPACs.

Author(s): Jenna Telesca, Geoffrey Rogow

Publication Date: 1 May 2021

Publication Site: Wall Street Journal

GameStop Day Traders Are Moving Into SPACs

Mary Pat Campbell

Link: https://www.wsj.com/articles/gamestop-day-traders-are-moving-into-spacs-11612175401?mod=djemwhatsnews

Excerpt:

Day traders fueling enormous gains in popular stocks such as GameStop Corp. are also powering big swings for another suddenly hot investment: so-called blank-check companies.

Special-purpose acquisition companies—shell companies planning to merge with private firms to take them public—are rising more than 6% on average on their first day of trading in 2021, up from last year’s figure of 1.6%, according to University of Florida finance professor Jay Ritter. Before 2020, trading in SPACs was muted when they made their debut on public markets.

Now, shares of blank-check companies almost always go up. The last 140 SPACs to go public have either logged gains or ended flat on their opening day of trading, per a Dow Jones Market Data analysis of trading in blank-check companies through Thursday. One hundred and seventeen in a row have risen in their first week. The gains tend to continue, on average generating bigger returns going out to a few months.

Author: Amrith Ramkumar

Publication Date: 1 December 2021

Publication Site: Wall Street Journal