Why Blank Check Companies Are The Hottest Thing This Year

And for those that don't know, SPAC stands for a special purpose acquisition company and they're basically these blank check firms, shell companies that set out to buy other companies, uh and make money off of them. And it's a way for people to get involved with those companies without the company's actually having to i p O in the public market. Right.

And the interesting thing is that the SPAC is public right away, so the SPACK does the i p O. It trades and so of course there's always a lot of you know, there's venture capital, and there's private equity. There's always companies that are financial companies that are buying

other companies. But this is a situation in which the buyer the show goes public, it raises money in that offering, and then it goes out in search of an actual real business to buy, right, so you're sort of pre funding acquisitions and you don't know what they are going

to be exactly. Now, the funny thing about SPACs is like, I don't remember that much about them before two I don't know why, but apparently that was the last time that everyone was talking about spacts, Right, Well, I think that's right, And I think that they do historically have this reputation because of you know, when you hear like blank check company, you hear like blank check that typically does that have like historically great connotations and anything, But

you hear like blank check company, and it's like, wait, I'm handing money over to this company and I have no idea what they're going to do with it except that I hope they're going to make a good acquisition. So historically I think they have sort of a questionable reputation, although part of our discussion today is is that changing.

But it also tends to be the case that they're associated with periods of you know, boom speculative speculative periods, and so you mentioned the pre crisis period, last crisis, and of course you mentioned now and you know, historically they do seem to be associated with periods of speculative appetite show we say, yeah, exactly. I mean the term blank check company kind of screens too much money in the system, doesn't it um, But you're exactly right. That's

the big debate. Now. We saw lots of SPACs before the two thousand eight financial crisis kind of kicked the air out of the market's tires, and now spacts are coming ac. I think so far in we've had over sixty five deals for something like twenty four billion dollars. Everyone is talking about them. There's all types of different structures, some are more controversial than others. But the big question is is this a sign of some sort of excess

in the market. Are we actually protecting investors through these structures, or is this a way to funnel money to sponsors or corporate owners. So today we are going to dig into all of those questions. Uh, And I'm really excited to say we have Kelly driscoll. She's a board director at a spack called Fusion Acquisition Cores. She's also a long time executive over at State Street Global Advisers, so we're really happy to have her on. Kelly, Welcome to

all thoughts, Thank you. It's a pleasure to be here with you today. So Kelly, maybe just to begin with, could we could we maybe discuss why ice bacts are experiencing this resurgence now, why now at this moment? Sure, I think the big wine now is the volatility in

the market. So certainly with the coronavirus and here in the US the uncertainty around the upcoming elections, there's incredible volatility, which tends to be puts a damper on traditional I p o s with that much volatility, and so SPACs are an alternative to I p o s. It's a way for private companies to basically go public by being acquired, as Joe had mentioned, by a spect that is already publicly traded. And two, go back to some of the

comments that you made on the evolution. You're absolutely right that one of the reasons they you maybe haven't heard of them, you know, since the early two thousands, is because that's when they got to got to receive the lot of mixed reactions and had some mixed reputations in the marketplace. But there were some regulatory and listing changes in two thousand eleven. The regulations made it easier to approve acquisitions because the acquisitions in the end have to

be approved by the shareholders of this back. And then in two thousand seventeen, the New York Stock Exchange revised its listing requirements to mirror nasdex requirements. So you saw more SPACs listing on the New York Stock Exchange. But kind of going to what you said, why why now? Why so much? Because the I p O, the traditional I p O market has really not closed down, but there's been such a damper on it that, uh, companies looking to go public or looking for alternative alternative vehicles.

I want to dig into that. There's so much I want to dig into, but let's just start with for people unfamiliar with the sort of simple will structural governance mechanics of how it works, the fundraising process, why people agree to lock up money with a management team, the obligation on that management team, and then how that decision comes to in terms of selecting a company to essentially buyout,

just like sort of walk through the basic spack steps. Sure, so basically you start with a sponsor who decides that they really want to set up a spack and they basically get what we call founders shares or what sometimes it's referred to as the sponsor promote, so they have founder shares in the spack. Those are the first years that come in and then they file an S one. They go through the steps of having the spack go

public um with the traditional underwriter. The units are then offered in in an underwriting and they typically are offered it ten dollars a unit. We can talk about Acman's It's back later on, but the typical structures they're offered a ten dollars unit. The public has, including retail investors, have the ability to buy those public shares, and excuse me.

Usually the units consist of a share and a fraction of a warrant, so and the warrants are typically exercisable at above the I p O price, so eleven dollars and fifty cents. So that's the structure, if you will. The reason somebody might invest is because, uh, as you know, in a traditional I p O it's very hard to get an allocation in an I p O. So retail investors can invest in a spack. The money raised in that I p O goes into a trust. So there's

some downside for investors. The trust holds the cash until the spack back with a merger acquisition and puts it to the shareholders. That the shareholders don't like the acquisition, they can uh, they can say I want my money back, They can redeem their shares. Even if they vote for the acquisition, they still have the ability to deem their shares, so you can. Spact provides some downside up until the

time of the business combination. And you're right, Joe, that that that you're kind of locking your money in for a period of time until the SPAC sponsors find find the right opportunity and present the acquisition merger to the shareholders. You mentioned the initial sort of SPACK investors also get a warrant, so a right to buy further shares of

the company at slightly above the offering price. Is that sort of like a compensation for the sort of time value of my of locking your money up while the board or while the well the additional sponsors could spend up to two years looking for a company. Yeah, and that I think, as as you say, it gives um investors, you know, more potential upside if the business that they have acquired does well over the over the long run, so they get a little more upside. So you mentioned

why investors might be interested in the structure. It gives them companies that might be otherwise very difficult for them to have access to, especially in an I p O process where you know, the initial allotments are going to go to very big investors like you know, mutual funds UM And you mentioned the role of the sponsors, and you know, sponsors get these sponsors shares and most of them seem to be well compensated for their role in

these companies. But what's in it? What's in it for a company that is being bought by a spack or a company that is reverse merging into a spack, why do they do it instead of doing an I p O for instance. Well, that's a good question really for the target business and its owners. One if you look at today's market, it's the ability to go public during periods of market instability, so you have access to public capital.

You can raise money to fund growth or raise money to fund your operations, and you can do it with much more certainty. So SPACs, once the spack identifies the target and starts having negotiations with the target, it's a negotiated deal. So the target business the business owners have much more say in the str ructure of of the company going forward, how much of their equity investment are they willing to roll into the company, what's the price so you know they usually in a traditional I p

O there's really no no ability to negotiate price. So it's all a bit of a negotiation with a SPAC, which can be very comforting to a company that's going to go public, and the other sort of big benefit for the target businesses. You can include financial projections which you can't do in a traditional I p O. So in the proxy statement that goes to the SPAC shareholders to vote on the deal, whether they want to prove

the deal, whether they want to get their money back. Uh, that can include financial projections and forward looking statements, which is not allowed in a traditional I PO. So when you look at some of the sort of larger if you look at some virgin lactic or draftings, it gave them the ability to show what the company is going to look like or might look like over sort of

multi year projections. Right. So this is where I have to like ask like a sort of like cynical question because you say that you know, this is a volatile market, and so SPACs offer another route to go in public. But on the other hand, this is one some people

might say this is a volatile market. But another way to say that is that this is a sort of euphoric market and that if you're a company that was in enterprise software or cloud software or autonomous vehicle tech, there's extraordinary demand in this market um for equity issuance. And so is it really about, Okay, this is a path to the market in a market that maybe doesn't have the appetite, or is it about there's a bunch of people that are pouring money into speculative. That's a

lot of retail money in this market. I mean, that's been one of the extraordinary stories of and if you like, I want to like sort of tap some of that retail money, and you want to be able to give projections which you can't do in an s one UM and say here's our hockey stick growth about you know, our total addressable market for autonomous vehicle tech going out to the year that this is sort of an easy way to get um less sophisticated money. I actually think

it is a little bit of both. So I do think when you look at the spack market right now. I know Tracy mentioned the numbers which day to day are are changing because there's so many specs. So I think the numbers are now you know, over thirty billion of capital raised by specs over seventy I p o s by SPACs. That compares to thirteen point six billion raised by fifty nine packs in ten And the average

size of SPACs has grown just since last year. So I would say if you look at the numbers, particularly in July and August, uh, it's not just a hot market but arguably somewhat overheated. So there's been such a flood of new SPACs on the market. And as you say, looking for a lot, looking for technology place. So what where is there going to be substantial growth? Uh? In a private company that we can bring to the public market.

And and yes, the the investors in this back are really betting on this SPAC management team, this back board and management team to bring a high quality and in most cases they're looking for a high growth company that they can bring to market. Um to Joe's point, can you talk a little bit more about the differences in pricing or valuing companies in a SPACK structure versus a traditional I p O process. So when I think of an I p O, there's sort of this whole ecosystem

of people, you know, the underwriters, the potential investors. There's consensus building around the valuation. As you mentioned, no one really knows what it's going to be until it lists and then it starts trading, and usually people are expecting that first day pop and the criticism of that is that it means that the company itself has left money on the table. But the SPACK process is much more certain again, as you pointed out, like you know what

the valuation is, but it's also much more confined. Um So, I guess what I'm asking is is this stack structure a way to for for companies to raise more money than they would in the I p O process. Yes, I think there's more opportunity to avoid that significant potential underpricing than a traditional I p O, where where the under writers and the larger investors are pricing in that ability to pop. I think in the average in the traditional I PO was like below market, and they are that.

I mean that's the way traditional I PO is set up to see that big pop. Whereas here, I think, particularly with the significant number of SPACs in the market right now looking for targets, the targets are in a better position to negotiate favorable terms and negotiate that price so that they can maximize the amount of capital that they can raise. And that I think is what we're

starting to see now in the spack market. I mean, there's still thousands of targets, so there are lots of companies out there, but they're definitely in a better position to negotiate. I record somewhere that some of them are even having these big calls back offs they bring several SPACs in and that's sort of a you know, a beauty contest if you will, Actually, can you clarify that? So the private company chooses between specs, you know what you're saying, No, I mean the SPAC goes out and

looks for for for a target. You're right, But what I'm saying is what I've heard is I mean there's so when you think about it, with all of the SPACs right now looking for targets, you have to imagine some of the high tech and you know, high growth companies who might have gone through more mature financings and are just about ready to, you know, thinking about going public, and maybe you're thinking about aspact as as an alternative.

If they're getting calls from several SPACs, uh, they might have the ability to say which one do they think they want to go with and which one did they think they can either get the best terms with or will be a really solid partner. So this actually leads into something I was wondering. So, you know, if a company is getting lots of different approaches from lots of different SPACs, are are all SPACs created equal? Or how would they be choosing um which SPACK to partner with?

And I guess what I'm getting at. Is our SPACs a sort of neutral vehicle to take companies public or are they more about a business partnership with a sponsor? That's an excellent question. I think they really are more about a business partnership. So what does this back team bring to them? So when I look at this back huge an acquisition, our focus is predominantly the fintech and asset wealth management area, and one of the reasons is the SPAC team that we have that we put together

are all from that background. So we have financial experience, we have investment experience, we have uh E, t F experience, fintech experience. So so our focus and our expertise is really in that space. And that's what we think we as a fact team effusion acquisition bring to a potential target. Is some of that uh in, some some main recognition, some significant experience, some you know, perhaps more seasoned experience

in developing strategy and some new products. So that might be attractive to up target to have some of that seasoned experience come in. And and whether that's in the form of being on the board or an advisor, helping them with their strategy, really exploring their growth story, how do you get paid so ultimately UM you know in theory.

You know Bill Gurley, the venture capitalist, he's been very critical of the traditional I P O process for quite some times, and he says, like SPACs are clearly better. The company doesn't give up that big pop two investors.

This is like a real good avenue. And so my question is, Okay, let's say I'm buying into your um spack as an investor, and I'm trusting that you're going to make a good acquisition, a good use of my money what ultimately determines you and your other partners who are involved in this back in terms of how much

UM you make. So the traditional spack when I mentioned earlier founders shares, the traditional spac basically the founder shares are purchased for a nominal amount and those founder shares usually equate to about but with warrants equate to about of the company being acquired to post the business combination.

So there's significant opportunity for this fact sponsors and the directors and the management to make money of a company, especially potential growth company in in you know when I say short short term maybe you know in the sixth one year term um and in the longer term as well. So particularly with warrants, is there a minimum lock up? So like, for example, I'm looking at the chart of Nicolodge that's very sort of infamous or popular electric truck maker.

They had a thirty six thousand UM dollars in total revenue last quarter market cap of about fourteen billions. So there's another debate somewhere else about that valuation. But that's not the point. My question is whoever did that spack? Whoever found that company and brought them public? Are they in a position most likely to instantly be able to

cash in or do they have to? Are they locked up for a while such that ultimately, if this just turns out to be a temporary pop and the company does not turn into the next Tesla, uh, they don't get paid. Yeah, they're there, typical and it's all sort of negotiated in the structure. In in in the original structure, but there are typical lock ups, and some of the

terms are changing. When I mentioned of a company, when you look at uh Akman's Pershing square Ton team, which was the biggest It's back I p O so far he raised, Um, I think I mean four billions? Did I say forty? I'm sorry, yeah, I was like, whoa, I was completely off four billion. No, No, that would be hard when only thirty billion has been raised in total. But it's four billion. Um. What's fascinating about what he did in his It's Back is he did not put

in founder shares. That this is what I understand. So instead of founder shares, the sponsors and directors purchased warrants and they're exercisable. I believe it's that three years after the business combination, for about six percent of the equity of the combined business. And I think that exercise prices

at about above the I p O price. So, as I mentioned, you know, the traditional structure was of equity with with the warrants, and now we're seeing, you know, changes to that structure, and I think we'll continue to see changes to the structure, particularly if the number of back I p o s continues to grow. Uh and the universe of targets, you know, was looking for a spack that maybe wants to be in you know, in it for the long run or um you know, take

less less of the equity off the table. So the criticism some of the sponsor shares was that the sponsors kind of get them up front, and because they immediately get of this company, they they have a reduced incentive I guess to go out and spend a lot of time finding a quality business like they've already been paid. So Akman's innovation is that you get rid of the founder shares, you keep the incentives aligned with the investors.

Is that right? I think that's right. I mean, I hear that criticism, but when I think about our spec this is we are rookies in this back market our team, and we have solid reputations. As I said, we're you know, all decent executives, and so for us, it's about our reputation as much as it is you know, to to see if we can um benefit from this in the long run financially. So we want to we want to get a really good spack deal. We want to want

to do a good deal. And I don't think most SPACs are out to find, you know, sort of a paltry jill just to try and make money in the short term. I could be wrong about that. I mean, there are so many out there, but when I look at it, I think, well, it's really important for us to get a quality deal. So there's been a lot of spacts obviously. And what's interesting is that in addition to sort of season, dealmakers and financial types were also

seeing the rise of sort of PLAUSI celebrity SPACs. Billy Bean, who was profiled in Moneyball, is doing a SPAC. Former Speaker of the House Paul Ryan is doing a back um. When you go out and you are trying to raise money, what's the pitch? What is the why should uh? What? You know? This sort of typical you know, if you're not acman, if you're not a household name, how do you pitch yourselves and say, you know, give your ten

dollars a share to us? As opposed to the hundreds of other facts available out there for Fusion acquisition, we really look at our team. We think we have a strong team. We have experienced management. Our management board team has as they mentioned, financial services, fintech, asset management. We have m and a experience, product, innovation, operational expertise. So we think we can be a good partner to a

potential target. So and I think that comes out we we are obviously in the in the process now looking for a target, and so we've been talking to the several companies. I think that comes out in the dialogue that we have with the companies. It's sort of like a dance, you know, uh, is this going to be a good fit for both sides or do we think we're finding a quality team with a proven business model And we're looking, you know, obviously for a very strong

existing company. We you know, we want a strong team that that has um the ability to grow, but has proven some of their their you know, their business model and strategy. So we think we bring perhaps some seasoned experience and expertise to that management team, and that comes out in the dialogues and the due diligence we do and the questions that we ask. And I think that's

where you hopefully will be successful in that dance. Now when you when you look at some of the more well known SPAC sponsors, um you see in the past there have been several huge sponsors with big home runs. But you know, not with with the amount of SPACs that are out in the market right now, not everyone's going to be at home one. And I think in the end, UH investors might benefit from singles and doubles.

And that's where maybe you ask Billy being about you know, in this entire conversation, I keep thinking, I keep thinking back to venture capital. So you know, we're talking a lot about the importance of the quality of the sponsors of the management team, what the sponsors can bring to

the table for both investors and the company itself. And to me, it sounds a lot like the venture capital model, you know, where the venture capitalists kind of go out to Silicon Valley and they have these lengthy conversations about making investments in these up and coming tech firms, and they're all sort of fighting for the same targets. Why why start us back as opposed to just set up

a venture capital firm and invest that way. I guess back is really more of a late stage venture cap financing, so so you know, you're not getting in at the earliest stages, but you're getting in when the company might

be ready to go public. And that's what you're really looking for is somebody who's sort of at the late stage venture venture financing, who who need who's looking for the benefits of going public and having access to liquidity and and and public capital, And so that's really it's you know, kind of replacing, if you will, or or competing with late stage venture financing, but in a way to go public that's a little different from a traditional I P O H. I guess that I'm still like

sort of bothered by the question, and I think it sort of comes back to why SPACs historically have been associated with market peaks, and why they've historically been associated with speculative manias, and why why people are just sort of distrustful of them overall. And I feel like, you know, late stage venture exists, but in late stage I mean

that already is a class. So like late stage venture exists, and you have you raise a pool of funds and then you buy stakes at a bunch of different companies and maybe a good handful of them work out because it's late stage, and then you get paid on the results. It still feels like this is a financing vehicle that could really only exist when there's lots of end retail

money demand. People who can't invest put their money as an LP in the venture capital fund, people who can't get access to preferential allocation in an I p O. So it feels like it has to be during a period in which there's a lot of sort of retail speculative money out there. And it seems like unlike with a venture fund, and a venture fund theoretically only can

make money if there are some like mega winners. You could theoretic you, due to the founder shares, get it do well just by doing okay, and then you get your and maybe it's not a home run, but you could still make money. So why is this not just something that is like strictly a a sort of a market top phenomenon to feed the speculative demands of retail buyers. It's interesting, but retail buyers are are relatively new to SPACs. So most of the traditional fact investors are your large

investors and um. Some of that I think is opened up to not just you know, highly speculative investors, but large investors, but institutional investors that might be pension type funds or uh, you know, sort of as I said, large institutional funds so and mutual funds. So. So there

are predominantly those types of investors financing these facts. A retail has been on, it has been increasing and um, and so I would say there's definitely some retail speculation going on, but it's certainly not the they are not the largest investors. They're not what's really driving the investment that you know, the significant investments is back, although they

are the retail market investments have increased. So your stack fusion acquisition is uh, it's already trading under the ticker views. What have you, um, what have you learned so far from the stack experience or what has surprised you in this fact process. So one of the things I've I've learned which is actually pretty basic and it's fact. But I mentioned before that the shareholders have the ability to redeem, and I think it's important to hit on this topic.

But when the SPAC is going through what they call the de SPAC process, so when they've found a target, they've negotiated a transaction, and now they have to put it to investors, and some of the investors, including institutional investors, UH, if they see you know, a bit of a pop on the announcement, they might want, you know, to redeem their shares and take the money now for whatever reason,

or they might not like the deal. So to mitigate the risk of a lot of money coming out, the SPACs typically enter into an additional financing arrangement for that despact transaction, and that's usually done through what's called a PIPE,

a private investment in public equity. So during that process, what I've come to realize, and we're not at that process yet, but i've been you know, UM learning about it, is that the spact sponsors, you know, negotiate with the PIPE investors so that that there is this backstop if you will, to fund significant redemptions if they're significant redemptions, and that's another opportunity where the SPAC sponsors might have to UM negotiate to give some of their founder shares

to attract the investors provide PIPE, so they're there throughout this SPAC process. There are these different opportunities for negotiations. So certainly in the beginning UM trying to get investors to come in, and when you do your road shows, you definitely get a sense of what the investors are looking for. Then there's the agreement with the negotiations with this fact target as well as the potential negotiations with

a PIPE financing. And when you think about these facts we raised Fusion acquisition, we raised three fifty million, but you're typically looking for something three, four or five times the size of your SPACK to acquire and that that helps reduce any of the delustion of the founders shares, the founders warrants UM. So that's one thing I've I've learned, and the other thing I've learned it's just really exciting.

I know, the market is kind of crazy at the moment, but it's exciting to go through the process of talking to companies looking at potential acquisitions. And this goes back to some of my experience when I was at State Street. Is really it's fun to look at opportunities and really try and select a good partner and trying to complete a quality deal. And it's it's as I said, they're not all going to be home runs, but it's really

exciting to be in that process. If I were an investor in a spack and I would hope that the management team really looking out for sort of you know, really doing uh serious process and as you describe, to find a quality deal. But at the same time, right now we just see you know, this incredible enthusiasm for say, like anything that's related to electric vehicles or autonomous vehicles.

How does the sponsor team not just sort of, um pick something that's hot, Like if they if I were to find some company that find some company that had some sort of laser tech that could identify other cars on the roads, like, oh yeah, this is this is autonomous vehicle tech. Autonomous vehicles hot right now, this will get a pop. Um. How do they weigh the sort of near term thirst for the market versus actually finding something that this could be a big sustainable company with

long term potential. Well, on your car analogy, I think you really have to kick the tires for sure, um, And that's really critical is to do your due diligence and get a feel for management and test their their strategy and their business model and see where they have been what they have proven so far, because you're not in so early they actually have you know, you're looking for companies that have a proven business model, so you really have to do that, and you count on some

of your advisers to help with that process. But I think it really comes down to looking for a company that in the in the long run, is going to be able to implement its strategy, have the flexibility to adapt and pivot when it needs to, and have you know,

proven their capabilities in at least a short run. But if I were, if I were a sort of owner of the ten dollar spec shares, how would I feel confident that the sponsor management team is actually going to do the process you described kick the tires, really get to know the business model as opposed to just finding some flavor of the month that has a high chance of UM having a stock market pop when it's announce I think for the investor, it's really important to look

at that sponsor and their team and understand what experience do they have, what do they bring to the table. Have they done this before, and maybe not through aspect structure, but have they been involved in valuing companies? Have they been involved in and venture cap in the particular H industry that you're looking at. Have they been as you mentioned, have they been involved in the car business. Have they

been involved in technology innovation? So that's that's incredibly important for the investor who's investing in this back is to do their due diligence on this back team and make sure they understand what they're trying to accomplish and what what they bring to the table. I have a really really cynical question, um. And you know, I'm sorry because like many of these questions have been really cynical. Um, and I'm probably going to take it to a new

level here. But if someone invests in a spack and and it all goes wrong, um, because management makes a bad investment decision, or you know, say they invest in a company that was cooking its books in some way or another and they didn't perform the proper due diligence

that they should have. What recourse do investors have in that situation and what protection do the sponsors have legally for those kind of disputes, I think in in those types of disputes after this back has been completed, So after the business combination has completed, you're really looking at the typical shareholder rights that that might come into play

before this back combination is completed. Because you know, fraud happens and companies cook their books, so you know, it's it's sometimes incredibly hard to uncover that in even the most thorough due diligence. So the there, you know, will be those situations you'll see when something really bad happens, as in any investment that you might make in the

in the in the public markets. So you have the shareholder rights that that you would see in any publicly traded equity that's listed you know, on the in the at least in the US, it's listed on the exchanges. The SEC protections if you will, for for protecting against

investors against fraud. But going into the business combination, if you're not keen on the company that that is being presented um and again you at least have more kind of more but certainly significant amount of disclosure that's being provided to you, you can you can take your money back, you know, so you can get the the the cash your proportion of the cash that's held on that trust. But after after the deal is done, it's really just

like any other publicly traded equity. What's what's the next big thing in SPACs? So you know, we've been talking about how SPACs are already the big thing in markets at the moment, But what's the next iteration of the spack or the next trend that you see coming up? I think it'll be fascinating to see how we get through this incredibly hot market. So what what's going to resolve come out of you know, all of these facts that are in the market right now looking for targets.

So how will that all play out? I think that's really going to be interesting to see. And there's still more spacts being listed, you know, every day right now, so so it hasn't cooled off quite yet, so what what will you know? We haven't seen a spack market like that yet, so how will that play out? Um? And the other thing I think we'll see, especially with with Acman uh, you know, putting out such significantly new

deal terms is how will they evolve? So how will how will these structures become even more beneficial to not only the targets, but in the end, the investors and that I think, you know, we'll see. We are already seeing evolution in the terms of SPAC deals. I think we will continue to see that. They'll be fascinating to watch.

Is the market for spects sufficiently hot enough such that if Tracy and I wanted to quit our jobs and launch like a media spack with using our name and using our wide audience from the podcast, that we could pull one off of this market. That's the real question. Well, if if Billy Bean and Paul Ryan could do it, that's what That's what That's what I'm thinking. I feel

like we're that kind exactly. Just let me know. And the other thing you see is repeats facts, especially from some of the big from some of the big sponsors, is they do one and then they go on and do another. And I think what happens is when you're out there looking for one, you see multiple opportunities, and maybe some private companies that aren't quite ready, but they're going to be there and six months to a year, and so I think you see opportunities and that's why

you see so many. It's why I think that's one of the reasons you see repeats facts seat fact sponsors. Right, all right, well, Joe and I are going to work on our repeat series of spats with extremely generous sponsor terms for for for both of us. Okay, Kelly, you've been so generous in answering all of our very cynical spat questions, So thank you so much. Really appreciate your time. Kelly Driscoll from Fusion acquisitioning for Thank you. It's been

my pleasure. Thank you very much. Uh So, Joe odd thoughts back, that's next, right, I mean like we could do one. Right. I'm a little bit worried about like legal liability if everything goes wrong, but yes, in theory, we could. You know. I often think like when there's a boom, I'm like, the only real idiots are just the people that don't just like dive in and take

advantage of it. Like I remember thinking like with all the I C it's like, you're really idiot if you're not like trying to launch an i C right now. And I kind of feel like we're sort of stupid for not launching us back. But I think we should

just you know, stick to podcast stuff like that. Yeah, Okay, Um, but you know what, you know what I kept thinking during that entire conversation, We're talking about SPACs as this sort of late stage market phenomenon, but I have no idea what stage of the cycle we're actually in at

the moment when it comes to the economy. And I know you don't like the subject of or you don't like the simplistic take that markets are sort of divorced from the real economy at the moment, but you have to admit that that seems kind of out of sync at a time when a lot of businesses are struggling for capital, smaller businesses, at the same time, we have this boom in spacts that you know, companies that are being pursued by spacts aren't having any trouble whatsoever and

getting new capital. It just feels really, really strange. Now, it is really strange, But I do think and I still can't get away from this idea that just structurally, as a market, it kind of feels it fits with periods of speculative media that like in theory, like you know, I p o s can exist throughout every cycle and venture and pe. But it feels like SPACs as a financing vehicle have to be associated with some sort of

speculative fervor some sort of euphoria on the market. And I think you know where we are in the business cycle, I don't know. And how much longer this bowl market can go on, assuming it's still going on by the time people are listening to this, I don't know. But I don't think there's anyone who's doubting that there is a lot of sort of hunger for risk in this market. Yeah, a lot of hunger for risk and a lot of I don't want to say naivete, but like trust in

people able to achieve those returns. And I think that's one thing that really came through the conversation is just how important the managers or the sponsors actually are to making this fact a success and you're sort of completely dependent on them. I mean, you do exercise some rights over the companies that they acquire, you can vote on them, but really it feels like you're quite dependent on them

to make the right decisions. Trust is a really good word, a really good way to put it, and I think it's one of those things that trust and confidence kind of emerge in bold markets. Um, and it's one of those things like when you know, one day the tide does go out and you're, like other words, untrustworthy players

in the market. But yes, right now, whether it's the confidence that Elon Musk will be able to deliver on all his dreams or the Nicola guy or whatever it is, there is a lot of faith in various managers and individuals that they will be able to deliver something extraordinary. And right now, you know the investors who make those beliefs, they're doing very well. Yeah, I think that's exactly right. Okay, shall we leave it there. I'll see it there. This

has been another episode of the Odd Thoughts podcast. I'm Tracy Alloway. You can follow me on Twitter at Tracy Alloway and I'm Joe Wisntal. You could follow me on Twitter at the Stalwart. Follow our producer on Twitter, Laura Carlson. She's at Laura M. Carlson. Followed the Bloomberg head of podcast, Francesca Levie at francesco Today, and check out all of our podcasts unto the handle at podcasts. Thanks for listening.