It says a lot about where we are in the cycle when sponsors of special purpose acquisition companies (SPACs) can easily and relatively quickly make tens of millions of dollars merely by taking a shell company public and choosing an acquisition target, before long-term success could ever be determined. But with the free market system we need to take the good with the bad (so long as legalities are considered), so as much as I think the SPAC structure is a strange way to accomplish a goal, it is probably short-sighted to write off the pathway completely and never consider investing in any of the deals. Don’t get me wrong, assigning a multi-billion valuation to a revenue-less, concept company based on rosy hypothetical financial projections for 2026 makes no sense to me, but here and there we can find real businesses reaching the public markets through a SPAC. As with any other security, what is important to analyze is what you get and how much you pay. And for some pre-deal SPACs, you can make a risk-free bet if the shares are trading below $10 each. Like the deal? Hold on for the long term? Hate it? Cash out with no harm done. Specifically, I like some SPACs where the sponsors are legit and the shares are at a discount because we don’t know the target yet. Something like SPGS from Simon Property Group or RBAC from Oakland Athletics EVP Billy Beane. You essentially get a free call option on their process. Some busted SPACs also look interesting post-deal. Wholesale mortgage lender UWMC can be had for $7 and change - quite a big discount to the deal price. If you think rates stay relatively low and housing demand will stay firm, it’s interesting. And then there are announced deals that haven’t yet closed. The most intriguing to me is the local neighborhood social media platform Nextdoor, which fetched $4 billion+ from KVSB and only trades at a small (~2.5%) premium after peaking above $11.,50 per share. A big multiple to current revenue with no profits? Sure, but longer term the platform seems to have staying power, a long growth runway, and numerous monetization opportunities. All for less than $5 billion; not bad in today’s market. All in all, most SPACs get a chuckle from me, but it’s still worth looking at some because with the market trading above 20x next year’s profit forecasts there are fewer and fewer bargains out there.