SPAC Investment Summit on Thursday; Welcome to the Great 2020 SPAC Boom; Long Before Nikola Trucks, Trevor Milton Sold Investors on Startups That Faded; Leon Cooperman and the American Dream; My RealVision interview: The Endless Hunt for Value; Doug Kass predicted Trump's illness

By Whitney Tilson

Monday, October 5, 2020

1) Don’t forget to sign up for my colleague Enrique Abeyta’s SPAC Investment Summit, which will take place this Thursday at 8 p.m. Eastern time.

Special purpose acquisition companies (“SPACs”) have been massively popular – they’ve raised $40 billion this year. They’re creating great investment opportunities… But the space is also rife with charlatans and con men (for more on this, see Michelle Celarier’s article below).

Investors need to be careful… so that’s why I’m joining Enrique for this special event to help set the record straight. In short, he’s never been more bullish on SPACs.

During the Summit, we’ll explain everything you need to know to make money in this corner of the market… as well as how to avoid falling into traps. Plus, you’ll hear from investing legend Bill Ackman – his latest venture launched the largest SPAC ever.

This event is free to attend, but you must reserve a spot in advance. You can do so right here.

2) Here’s Michelle Celarier of Institutional Investor on SPACs: Egregious Founder Shares. Free Money for Hedge Funds. A Cluster***k of Competing Interests. Welcome to the Great 2020 SPAC Boom. Excerpt:

Sports executives like Billy Beane of Moneyball fame and politicians like former House Speaker Paul Ryan are launching them, while everyone from pension funds to sovereign-wealth funds, mutual funds, and Robinhood day traders is getting in on the action.

Long-time practitioners acknowledge SPACs are now in a speculative market, if not a downright bubble. “I do think the market has gotten very, very frothy, and I do see a couple of cautionary flags,” says Jeff Sagansky, a media executive turned dealmaker whose fifth SPAC merged with DraftKings to great acclaim earlier this year. “There are a lot of SPAC sponsors that just are really not qualified.”

“Is there too much SPAC money chasing too few opportunities?” he asks. “I don’t think we know that yet.”

But the way SPACs are structured seems to make that inevitable.

Again, it’s critical to know what you’re doing in order to make big money in the sector.

3) Readers know that I’m highly skeptical about electric-truck maker Nikola (NKLA), which went public via a SPAC earlier this year. Here’s an in-depth Wall Street Journal article about the sketchy past of its founder: Long Before Nikola Trucks, Trevor Milton Sold Investors on Startups That Faded. Excerpt:

Nikola is by far Mr. Milton’s highest-profile blowup. But combined with the decade-old Swift deal and a number of other ventures in between, a pattern emerges for the self-described serial entrepreneur.

Mr. Milton through his career built businesses using charm and salesmanship. He often ended up with disputes, litigation and disappointed investors, according to former employees, customers, investors and documents.

As for Nikola, which he founded in 2015, Mr. Milton leaves behind a swirl of questions about what it can deliver. Since the negative report was released, the company has lost roughly 40% of its valuation and drawn Securities and Exchange Commission and Justice Department scrutiny, The Wall Street Journal and others have reported.

4) My friend Leon Cooperman is one of the all-time great investors, so I’m always eager to hear what he has to say.

He recently did a 52-minute interview with RealVision (here’s the link for subscribers), the highlights of which are captured in this Business Insider article: Billionaire investor Leon Cooperman praised tech stocks, criticized Trump, and disclosed his first gold bet in a new interview. Here are the best 12 quotes. Excerpt:

  • Leon Cooperman sounded the alarm on the ballooning federal deficit and downplayed the medium-term prospects for U.S. stocks.
  • The billionaire boss of Omega Advisors also praised “big tech” stocks, called out Tesla CEO Elon Musk, criticized both Republicans and Democrats, and revealed that he recently bought gold for the first time.

5) Speaking of RealVision, my interview from 13 months ago is no longer behind the paywall: The Endless Hunt for Value (64 minutes). Overview:

Value investor Whitney Tilson, founder and CEO of Empire Financial Research and the former managing partner of hedge fund Kase Capital, details his transformation from momentum trader to an investor living by Warren Buffett’s dictum that “it’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” In this conversation with Ed Harrison, Tilson explains why he sees WeWork pulling its IPO and eventually going bankrupt, lays out the case for Amazon and Fannie Mae, and speaks to the outlook for beaten-up European financials.

6) Every year, my friend Doug Kass of Seabreeze Partners publishes a list of “15 Surprises” for the upcoming year. He says:

[This] is not a set of forecasts. Rather, the List represents events that the consensus views as having a low probability of happening (20% or less) but, in my judgment, have a better than 50% chance of occurrence. In betting parlance this is called an “overlay.”

I highlight this because, on January 13, as part of his 2020 Surprises (you can see all of them here), he made this eerily prescient prediction:

Under the weight of the pressure of running for reelection, a hectic travelling schedule and poor eating habits, President Trump’s health catches up to him. A significant health problem is disclosed in the spring forcing the President to curtail his political appearances for more than a month.


It’ll be interesting to see whether Doug’s related prediction comes true as well:

Voter Turnout rises by over +6% (from 2016) – most of the incremental change is captured by Biden who wins 50.7% of the popular vote compared with 46.3% for Trump – a plurality of over 6 million votes. (That compares to 48% for Secretary Clinton and 46% for President Trump in 2016 – a difference of 2.9 million votes).

Senator Biden also wins a surprisingly large majority in the electoral college (304 to 234).

Though the Republican Party was a huge favorite to retain control of the Senate – the Democrats regain control of the Senate on the coattails of Senator Biden and the widening voter turnout.

Best regards,


Whitney Tilson
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About Whitney Tilson

Prior to creating Empire Financial Research, Whitney Tilson founded and ran Kase Capital Management, which managed three value-oriented hedge funds and two mutual funds. Starting out of his bedroom with only $1 million, Tilson grew assets under management to nearly $200 million.

Tilson graduated magna cum laude from Harvard College with a bachelor’s degree in government in 1989. After college, he helped Wendy Kopp launch Teach for America and then spent two years as a consultant at the Boston Consulting Group. He earned his MBA from Harvard Business School in 1994, where he graduated in the top 5% of his class and was named a Baker Scholar.

Click here for the full bio.