Monday, March 22, 2021

"Five Months After First SPAC ETF, the De-SPAC Funds Are Coming"

 Following up on the post immediately below, "UBS quietly bans advisers from pitching booming SPACs to clients".

From Bloomberg, March 16:

  • Fund from Tuttle tracks 25 firms after blank-check mergers
  • De-SPAC ETF, inverse version join firm’s other SPAC offering

After an initial burst of new ETFs tracking special purpose acquisition companies, the next wave of products will offer ways to bet against them.

Tuttle Tactical Management is planning to start a De-SPAC exchange-traded fund that would include the 25 largest companies based on market capitalization that have merged with special purpose acquisition companies, according to a regulatory filing. There’s also a Short De-SPAC ETF which provides the inverse of the first product.

So-called blank-check companies have become one of the hottest investments, providing a workaround for the costly and time-intensive initial public offering process. They’ve announced at least 68 merger and acquisition deals so far this year, with a combined value of $49.2 billion. The largest is the acquisition of Lucid Motors Inc. by Churchill Capital Corp IV for $4.4 billion.

But those speculative bets faced a battering earlier this month amid a spike in interest rates. An index tracking the shares plunged 20% from its peak, after almost doubling since October.

One of the most famous examples is Virgin Galactic Holdings Inc., a developer of space vehicles that is still down more than 40% from its February high.

“There was just no way to hedge yourself for when these companies eventually go kaboom,” said Matthew Tuttle, chief executive officer of Tuttle Tactical Management, about the reasoning behind the new funds. “It’s going to be a tool -- some people might hedge, some might trade options on it.”...


Wall Street marketeers are so creative. 

With the pitches. Not so much the products but the pitches are borderline genius.