'Pennies: Going In Raw' Talk Bitcoin's Surge, SPAC Opportunities
Bitcoin's Two Catalysts: Bitcoin's rise to new all-time highs was aided by two stock market-related catalysts, Henne said.
First, as soon as the short squeeze fiasco involving GameStop Corp. (NYSE:GME) and other heavily shorted names came to a halt, investors would be looking to park their money in bitcoin, along with cannabis stocks.
Bitcoin's rally was also fueled in part by Tesla Inc's (NASDAQ:TSLA) announcement it not only bought $1.5 billion worth of bitcoin but would accept the digital currency as a form of payment.
"Do I think that Elon Musk and Tesla had something to do with the bitcoin rally?" Henne asked. "For sure, no doubt about it."
SPAC Trends: The trend of SPAC deals continues to gain momentum but taking a look back at deals closed in recent months signals some investor frustration, Deity said.
Mortgage company UWM Holdings Corp (NYSE:UWMC), for example, is trading near its all-time lows and medicare insurance startup Clover Health Investments Corp (NASDAQ:CLOV) was the target of a Hindenburg Research short report.
This shouldn't detract from the opportunities that SPAC deals can provide to investors. A lot of deals take place at-value or even at a price that undervalues the target company, Henne said. But this isn't reason enough to jump into a SPAC as investors need to think about their game plan and strategy.
"If it doesn't have a catalyst, and the only catalyst is undervalued, you need to ask yourself what is the legitimate, real timeline of this SPAC," Henne said.
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