Josh Black was looking for the next lucrative deal after scoring a 500% profit in a few weeks by investing in electric truck maker Nikola Corp following the announcement of its merger with a blank-check acquisition company.
This time Black wasn’t so lucky.
Federated Hermes portfolio manager Stephen DeNichilo said retail investors buying shares in SPACs “need to take extra care and do extra due diligence”. “Big institutional investors buy huge amounts because they see a good opportunity. They are smart people behind those walls,” he said. Mom-and-pop investors have followed suit, helping fuel a frenzy for SPAC stocks in the wake of their deal announcements.
“There is some pump-and-dump trading going on with these SPACs,” said Rosaria Pellegrino, a bed-and-breakfast owner in Naples, Italy, who is down 30% on her investment in SPACs that did deals with electric truck maker Hyliion and 3D mapping company Velodyne Lidar.RECORD SPAC DEALS
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