Julian Klymochko
@JulianKlymochko
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CEO and CIO @AccelerateFT | Powering Diversification with Leading Alternative Investment Solutions
Calgary
Joined August 2013
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어린이날
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こどもの日
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#ขวัญฤทัยEP12
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子供の日
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GW最終日
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#해피큥데이
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Al Jazeera
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West Ham
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Vlad
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Cole Palmer
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#HappySkyDay
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#碧海これからも一緒に歳取ろうね
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سعد اللذيذ
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Noni
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According to JPMorgan, if someone uploaded their own 30-second track to Spotify, and then programmed their phone to listen to it on repeat 24 hours a day, they would receive $1,200 a month in royalties
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Morgan Stanley: while 72% of new cars in Norway are electric vehicles, oil consumption in the country hasn’t changed
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Minting a
@BoredApeYC
NFT one year ago turned into the greatest investment of all time, with a 270,000% annual return
Nearly one-fifth of the return came from the recent $APE governance token
Who wouldn't want to be long this chart?
#ApeFollowApe
#BAYC
#MAYC
#apecoin
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Small cap stocks have never been cheaper relative to large caps
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The U.S. still imports oil from Russia but blocked the Keystone XL pipeline to import oil from Canada
Think about that
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Some easy investing rules of thumb:
1. Never go long a SPAC (aside from an arbitrage)
2. Never go long a merger deal that has a buyside vote
3. Never buy on new lows and never sell / short on new highs
4. Never short a story stock unless the story (and chart) has broken
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Over $16 billion of option premium traded in $TSLA today, representing 55% of the entire U.S. options market
h/t RBC
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For the first time in history, investment-grade corporate bonds yield less than 3-month T-bills
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There are hundreds of "dividend guy" social media accounts
However, there are very few "buyback guy" accounts, which is nonsensical, given buybacks represent about twice the shareholder returns of dividends
Not to mention that buybacks are far more tax-efficient than dividends
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The current SPAC market of $113 billion represents nearly $23 billion of embedded compensation to sponsors
One of the greatest fee generators that asset management has ever seen
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Bill Ackman really is a polarizing investor
Closed-end fund investors hate him, giving him a -23% NAV discount
SPAC investors love him, giving him a 34.5% NAV premium
Perhaps $PSTH should just buy $PSH and eliminate both inefficiencies
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Alberta's 2019 GDP growth rate: 1.3%, the lowest in Canada
Texas' 2019 GDP growth rate: 4.7%, the highest in the US
It's not the oil price, it's government policies.
#cdnpoli
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Music royalties are one of my favorite alternative asset classes, especially when a classic track comes up for grabs
The musical composition rights for a legendary '90s hip-hop track just got listed for sale:
"I Got 5 On It" by Luniz (makes $10k/year)
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$BYND convertible bonds trade at 40 cents on the dollar and yield nearly 20%
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@CMAgovUK
It was the wrong decision. Not too late to reverse it upon appeal. Follow the EC and do the right thing.
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Elon Musk moved to terminate the $TWTR merger agreement, claiming that Twitter breached the agreement by failing to operate in ordinary course in addition to suffering a material adverse effect (MAE)
What happens now?
A 🧵👇
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We may be in an NFT bear market but the premier collection,
#BAYC
, is still up +29.9% YTD and +170,000% since its inception
@BoredApeYC
$APE
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$FB now trading cheaper than its tobacco comps
$FB 6.6x
$BATS 7.9x
$MO 9.3x
$PM 10.6x
I see a future in which $FB trades at a tobacco / oil & gas multiple
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My last bottom call was March 16, 2020 on the index
I ended up being a week early
I'm making my second ever call
The SPAC market bottomed
Position accordingly
My bottom-call was about a week early. We'll see if it holds.
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Today, 8 SPACs filed S-1's for initial public offerings
Now there is a backlog of 123 blank check companies that have filed an S-1 but have not yet IPO'd
This represents a potential 69.1% increase in number of SPACs outstanding and push the total number of 300 outstanding 🤯
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If you're a SPAC investor, this is the most important chart to watch
SPAC NAV premiums have declined from 27% last month to 7% currently
So the majority of the drawdown is done and not a lot of downside left (assuming you own blank checks at or near NAV)
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Current yields:
S&P 500 (medium risk) -> 5.3%
Corporate bonds (low risk) -> 5.3%
Treasury bills (no risk) -> 5.3%
Which would you rather own?
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Note to self: Today, Rivian, an automobile manufacturer with $0 revenue, went public at a $90 billion valuation
Some people say SPACs are dumb, but on average, IPOs are much worse
$RIVN
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The Private Equity Conundrum:
Buy public companies at higher prices than public market investors (average 63.9% takeover premium), take them off the exchange, lever them up 2x-5x, then get... lower volatility?
What kind of sorcery is this?
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@eldsjal
Thanks for clearing it up
Happy to have you on my podcast to discuss your business model more in depth
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What's wild in the context of the Magnificent 7 trading above 50x earnings, the "Chinese Amazon" trades at just 5x earnings net of cash
$BABA is trading near all-time lows, down -76% from its 2020 peak
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SPACs with most cash in trust ($million)
$PSTH $4,000.8
$CCIV $2,070.2
$BFT $1,467.2
$WPF $1,035.5
$TBA $1,000.0
$IPOF $1,000.0
$PRPB $828.1
$CRHC $828.0
$AJAX $805.0
$FTOC $754.8
$GSAH $750.1
$CONX $750.0
$APSG $750.0
$AACQ $724.6
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Used car prices have rallied so much that lenders are now making money off defaulted auto loans
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Two weeks ago Exxon's CEO Darren Woods approached Pioneer CEO Scott Sheffield to do a deal
They signed a confidentiality agreement the next day and announced a $64.5 billion merger 13 days later
No relying on consultants, no months in data rooms, no teams doing extensive…
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"What a beast of an opportunity.
This is like getting into the hedge fund business in the 70's when Soros started. There's no competition, and there's not enough capital in the space."
-
@RaoulGMI
on cryptocurrency
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I don't understand the schadenfreude regarding Cathie Wood and $ARKK
We haven't seen a "star manager" in decades, nor a prominent woman in asset management. These are great things for the industry
Irrespective of her investment style, her success should be celebrated
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Out of 361 SPACs since 2010, just 10 have liquidated without a deal
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There are 275 SPACs holding an aggregate $83.9 billion in trust, which are invested in T-bills
Blank checks are funding 2.7% of the government's $3.1 trillion deficit in 2020
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According to AQR, higher rates compress excess returns for stocks, private equity, and real estate, while boosting excess returns for trend and market-neutral strategies
The data show that "cash plus" liquid alternatives are the main beneficiaries of higher cash rates
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Note that legendary ticker $LMAO starts trading tomorrow
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This is the first non-Monday in which there are zero SPAC IPOs in what feels like months
Two SPAC IPOs were pulled
This is a tell
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Pre-deal SPACs trading at a >10% premium to NAV
$PSTH 22.1%
$AGC 16.7%
$IPOD 12.0%
$IPOF 10.2%
This list went from hundreds to 4 over the past six weeks
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When is BusinessWeek going to run the cover The Death of Short Selling
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Record number of $1 billion+ companies with zero revenue going public
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I admittedly did not have "WeWork will rally over 20% the day it goes public" on my 2021 bingo card
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Historically, small caps have outperformed
Historically, value has outperformed
Both have been smoked over the past 7 years
If you're a student of the market and believe in mean-reversion, small cap value is the place to be for the 2020's
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Khosla Ventures late to the game but playing catch up, dropping three SPAC S-1's today to raise $1.2 billion across three blank check IPOs
All with ZERO warrants
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There is nearly $1 billion of SPAC IPOs TODAY
This is after nearly $1 billion of SPAC IPOs YESTERDAY
All these deals are MASSIVELY OVERSUBSCRIBED
Where is $1 billion PER DAY coming from?
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*CANADA TO IMPOSE 2% TAX ON STOCK BUYBACKS AS OF JAN. 1, 2024
What a phenomenally terrible idea
Populism at its worst
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Did you know that the level of dividend yield has had no historical effect on the total return of a portfolio?
Stocks with the lowest dividend yields had returns that matched those with the highest
However, those who ignored dividends and focused on FCF yield made 5x more!
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QuantumSi / $CAPA is the first SPAC PIPE I've seen ARK Invest participate in
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8 EV companies
$70 billion enterprise value
$0 revenue
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There are 8,000 private companies owned by LBO firms. Investors pay 6-7% per annum in fees to own them.
There are 4,000 public companies. Investors pay 0.03% to own them.
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Nice profile on
@WBrettWilson
and his effective use of twitter, using his platform to stand up for Canada and Alberta.
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He used his AmEx card to buy prepaid Visa gift cards at grocery stores. He used the gift cards to buy money orders, then used the money orders to make deposits in his bank account, then used that money to pay his credit-card bill.
Legend
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Most of the froth has left the SPAC market, as the average NAV premium has fallen from 27% to 9.8%
This has brought 3 benefits:
✅ Less downside risk
✅ Lower volatility
✅ Opportunity to put significant amount of capital to work at discounts to NAV
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Retail investors now account for the largest % of US equity trading market volumes (excluding market makers)
Almost as much as mutual funds + hedge funds combined
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If you told me 15 years ago that stock trading would be free but it would cost $350 to trade a jpeg I'd be kinda surprised at that
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Great story about former SAC Capital PM Bill Shufelt, who left the hedge fund industry to find the nonalcoholic beer company Athletic Brewing.
His idea was to create a new kind of nonalcoholic beer: one that people would actually want to drink.
He’d become convinced that it was…
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"We’ve had some fantastic conversations with the government of Alberta, which has been really constructive and is trying to take the lead in Canada and around the world for crypto policy and frameworks."
-
@SBF_FTX
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Russian investors had nearly 100% of their equity investments allocated to their domestic stock market, which is now worthless
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$TWTR has not yet filed the DMA for Musk's acquisition (which is odd, granted it came together quickly)
Nonetheless, here's my take as a merger arbitrageur who has analyzed / invested in nearly 2,500 M&A deals over the past 15 years
🧵🧵🧵👇 1/
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Retail options speculation has hit an all-time high
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*CITRON GIVES NEW PROVIDENCE ACQUISITION $50 TARGET $NPA
Citron transitioning from short selling to pumping post-SPAC equities was not on my 2021 bingo card
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All six of a certain SPAC sponsor's deals trade below $10.00 (all have lost money), some markedly so
Nonetheless, last week they raised a 7th SPAC totaling nearly $300 million
This appears to be the only asset management product in which track record is irrelevant
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Morgan Stanley: The equity risk premium is now at its lowest level since 2007 and is now in the "death zone"
Why be long the S&P 500 if you aren't adequately compensated for the risk?
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SPAC business combinations announced this week
$GHVI Matterport
$NEBC Rover
$FRX Beachbody / Myx Fitness
$ACIC Archer
$DCRB Hyzon Motors
$FGNA OppFi
$FCAC Sharecare
$SNPR Volta
$CMLF Sema4
$ARYA Nautilus Biotechnology
$FUSE MoneyLion
$GRNV Helbiz
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You might want to sit down for this
Hawaiian Airlines $HA entered an agreement to be acquired by Alaska Airlines $ALK for $18.00 cash per share, representing a jaw-dropping premium of 270.4%
This is the largest takeover premium on a >$1 billion deal since Sanofi's takeover of…
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A private equity firm that buys stake in other private equity funds is going to be bought by another private equity firm
It's like the holy trinity of fees
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The 10-year yield has been dropping but the long-duration NASDAQ has forgotten to follow
Bond yields imply a -10% correction in $QQQ
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SPAC 890 5th Avenue Partners brought only $16 million cash from trust to BuzzFeed, while accruing $35 million of transaction fees
For this losing the company $19 million, the $ENFA sponsor earned 4.7% of the company
Not a great deal for $BZFD
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13. Do your own work! No one else will make money for you (only off you)
14. Constantly evolve. No such thing as "style drift", only progression
15. Do it for the love of the game. Nothing else
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Sign of capitulation?
100% of SPAC IPOs broke price and traded to a discount instantly
Investor euphoria for SPACs has turned into despondency and disgust
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You hear that sound?
That's the sound of the IPO window closing
75% of today's SPAC IPOs broke price and are trading below $10.00 per unit
Last time this happened (early Nov) proved to be a great buying opportunity and enterprising investors were rewarded
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Goldman Sachs: 44% of legal work can be automated by AI
Hopefully ChatGPT doesn't start ambulance chasing
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Happy Father's day to all the dads out there.
Especially the single dads - each and every one of you are my heroes!
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Damn
Just realized I own 165 SPACs
Might be more than anyone on earth
No wonder they call me the King 😉😂
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This is what the start of a new SPAC bull market feels like
Great to feel the energy
Are you positioned for it?
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The Art Of SPAC Arbitrage
I run the Accelerate Arbitrage Fund ETF (TSX: ARB), and this is our approach to investing in SPACs 👇
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SPAC premiums have hit dangerously high levels
Be careful out there folks
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Car wash IPO pops +26% but one of the most innovative companies ever (Ginkgo Bioworks / $SRNG) to go public via SPAC just languishes
Makes sense 🤡
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The Canadian government needs to let the real estate market go bust.
We need prices in Toronto and Vancouver to reset 50-75% lower to give millennials a chance to own property.
Strike fear in the hearts of speculators who believed it would only go up.
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Stephen Smith is a Canadian billionaire and financial services tycoon. He just donated $100 million to Queens University. Sounds like the epitome of success, right? It wasn’t always this way.
In the 1980s, after trying his hand at real estate, rising interest rates and bad…
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There are now 10 pre-deal SPACs trading at or below NAV 🥳
This is up from 0 two days ago
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557 SPACs is too many but 24,000 actively managed mutual funds is just the right amount ¯\_(ツ)_/¯
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Largest inflow to energy stocks since 2008
The end of a brutal 13-year bear market?
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Nailed it with 1 month to spare 💅
"Trump announces social media platform launch plan, SPAC deal"
$DWAC
I think we'll see a Trump SPAC in the next 12 months
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Three SPAC IPOs today
One downsized -20%
One downsized -50%
Yikes 😮
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Fun fact: I launched my first hedge fund with $5 million (not my own money!) at age 28
For the first 4 months, I woke up every morning sick to my stomach
Compounded at 10% annualized with a ~3 Sharpe for the first few years
Then made a really bad trade!
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Current equity bubble vs 2000, per Goldman:
"20 years ago, the aggregate S&P 500 P/E was a similar 24x, but the median stock traded at 14x. Today, the median firm trades at 21x"
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I think my recent calls on $CCIV, $ACTC and $ACIA warrant 10k follows 📈
Don't you?
Appreciate the support of everyone in the
#fintwit
community 🙏
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A basket of the most shorted stocks surged 15.7% last week
The most violent junk stock rally since the spring of 2020
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91% of SPAC common shares are trading below $10.00 and 77% of deal SPACs (pre-close) are trading below $10.00
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There are good stocks, damn good stocks and then there’s Constellation Software $CSU.to
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5. Never ever get emotional about a stock
6. Never buy preferred shares (unless for an arb / liquidation)
7. Liquidations will always take twice as long and proceeds will be less than expected
8. Never sell a stock to "take profits". Why bench your best player, coach?
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@MarkMcGrathCFP
Agreed. Much easier to own a portfolio of listed investments. They don't call you when you're on vacation asking you to replace a lightbulb!
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The team behind Decarbonization Plus Acquistion $DCRBU managed to raise $200 million in an IPO today with this track record for their previous 3 SPACs:
$CDEV down -94%
$AMR down -100%
$VIST down -77%
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F45 goes public via SPAC at a $845 million valuation
CNBC: This deal sucks! Sell!
F45 goes public via IPO at a $1.7 billion valuation
CNBC: This deal rocks! Buy!
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