We Study Billionaires - The Investor’s Podcast Network TIP401: The Most Important Company Is Going Public w/ Chris DeMuth Jr.
Dec 3, 2021
Chris DeMuth Jr., founder of Rangeley Capital and SPAC investment expert, dives into the transformative SPAC merger between DMY Technologies and Planet Labs. He discusses how a diverse SPAC portfolio can be a safe harbor for cash and the vital role of Private Investments in Public Equity (PIPEs). The potential of Planet Labs is highlighted as it aims to revolutionize earth imaging through satellite technology, promising exciting financial implications for investors. DeMuth's insights also reveal the current SPAC landscape's unique opportunities for savvy investors.
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SPACs as a Value Investment
- Chris DeMuth Jr., a value investor, explains his interest in SPACs due to their unique structure.
- They offer a "free put" via redeemable trust value and a "free call" with warrants, minimizing downside risk.
Lucid Investment
- Chris DeMuth Jr. discusses his largest investment, Lucid, acquired via SPAC units at a discount.
- The extreme volatility allowed recouping the cost basis quickly through call options premiums.
Embrace SPAC Volatility
- Consider SPAC units for their embedded warrants, which offer exposure to volatility.
- Volatility is desirable as it amplifies returns when a portfolio includes both successful and unsuccessful SPACs.