Have you heard of a SPAC?
It’s an acronym that stands for Special Purpose Acquisition Company.
SPACs have been around for decades.
But they’ve seen a bit of a revival recently, and have quickly become one of the hottest corners of the market over the past few quarters…
And it looks as if things are only getting warmed up:
Source: Business Insider
Of course, as with anything you trade, you need a solid strategy to trade SPACs…
And our friend Ross Givens has been using one recently with some pretty impressive results.
Before we get too deep into the strategy, let’s quickly discuss exactly what SPACs are and why they’ve become so popular lately.
As I mentioned, SPAC stands for Special Purpose Acquisition Company.
Essentially, it’s a “blank check” company that makes it easier to bring a private firm public.
Proven money managers raise capital by selling shares of the SPAC…
Then they use those funds to buy private companies at prices below what they likely would have been offered under a traditional IPO, or initial public offering.
Now SPACs can be used to acquire companies from any industry…
But as that Business Insider article indicates, 2020 was the year of the electric vehicle SPAC boom.
Several high-profile EV companies were either acquired or agreed to be acquired by a SPAC last year, including Nikola, Lordstown Motors, XL Fleet, Canoo, and the popular EV battery maker QuantumScape.
The trend seems likely to continue because, as you’re probably aware, the world is slowly shifting away from gas powered engines in favor of more sustainable electric vehicles.
From the Business Insider article:
“‘The Auto Industry is reaching an inflection point for electric vehicles, but funding this revolution is a tremendous hurdle,’ a team of BofA strategists led by John Murphy said in a note on Wednesday.
BofA estimates that the transition toward 100% electrification could require over $2.5 trillion of investment around the globe over the next decade. One way to raise that capital could be through a SPAC.”
Now as we mentioned, last year saw a massive infusion of cash into electric vehicle SPACs.
… Over $6 billion total, according to Bank of America.
And as the article goes on to point out, “Although that amount is nowhere near the $2.5 trillion capital goal, the recent SPAC boom indicates that there is a lot of external capital waiting to be deployed for companies participating in the ‘electrification revolution’… “
Now you may be thinking to yourself, “OK, this is interesting…
But what’s it got to do with me, Dustin?”
Well, allow me to explain.
See, SPACs can be traded just like IPOs.
But just like anything you trade, you need to do your due diligence…
And it doesn’t hurt to have a proven strategy in place to help you determine which SPACs are likely to return you a decent profit.
As it turns out, my friend Ross Givens spotted a SPAC just over a week ago that was showing signs of a breakout…
And his members took full advantage.
The opportunity came on Northern Genesis Acquisition Corp., ticker NGA.
This SPAC recently announced that it would be acquiring Lion Electric, an early-stage electric vehicle manufacturer specializing in commercial trucks.
News of the acquisition sent shares to new highs on 4 times the average daily volume…
And Ross immediately recommended his members take a position to potentially ride the trend even higher.
One week later, NGA stock has already gained nearly 60%…
While the call options Ross advised jumped over 105%.
Not too shabby for just a week in the trade.
Now SPACs are not the only trade opportunities that Ross is handing his members using this particular strategy.
In fact, the week before Thanksgiving, he spotted an opportunity on a fuel cell power company (FCEL) that returned over 700% in just 7 days.
So if you’d like to learn more about this powerful strategy AND discover how you can get in front of the next opportunities that it digs up…