We Study Billionaires - The Investor’s Podcast Network

TIP359: The Rise and Fall of Archegos and Discovery w/ Andrew Walker

Jul 9, 2021
Guest
Andrew Walker
Andrew Walker, a portfolio manager at Rangeley Capital with expertise in SPACs, joins for a deep dive into the complexities of investing. They discuss the allure and challenges of SPACs, highlighting Bill Ackman's innovative unicorn approach. The conversation ventures into the high-stakes merger of Discovery and Warner and the dramatic collapse of Archegos, revealing key lessons for investors navigating this volatile landscape. Andrew's insights provide a unique perspective on the intersection of media and finance, making for an enlightening listen.
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INSIGHT

SPAC Sponsor Incentives

  • SPAC sponsors are incentivized to close any deal, even bad ones, due to their disproportionate reward.
  • This misalignment of incentives between sponsors and investors makes SPACs potentially risky.
ADVICE

Redeeming SPAC Shares

  • If you invest in SPACs pre-merger, redeem your shares if you dislike the deal.
  • This allows you to recoup your initial investment and potentially profit from warrants.
INSIGHT

SPAC Projections and Regulation

  • SPACs often present overly optimistic projections to attract investors, leading to inflated valuations.
  • Regulatory scrutiny of this practice is needed to protect investors.
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