Forge Stock: A Secondary Market for Startups
Another day, another reason to avoid special purpose acquisition companies (SPACs). This time it’s the Reddit “day traders” wreaking havoc on companies like Spire Global. An increase in stock price volatility equals an increase in risk. Or at least that’s what they teach you in Finance 101. Therefore it’s critically important to only invest in companies you want to own for a very long time. That way, when SPIRE dumps -40% in one trading session for no good reason, you can back up the truck. But SPACs don’t give us enough information to decide if a company is worth holding for the long run, so volatile SPACs do nobody any good.
We talk a lot of smack about SPACs, so why have we written about 64 of them now? It’s so we can do cool stuff like this:
