YouSaid · the spoken record

Louis Camhi

lines on the record: 160
first: 2023-06-19
most recent: 2023-06-19
sittings or episodes: 1
sources: podcast

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“Yeah, so venture capital is an area of finance. I know the least about. So I'm not, I don't really know anything about it, but I have to say looking at what they've produced, where are the good companies where, oh yeah, that company IPO'd or SPAC'd in 2015 and it's up a ton. I mean, I'm struggling to think of any. I mean, I just, there's so many that are just down in the tubes.”
2023-06-19 · Forward Guidance · SPACs Are Bonds, Actually | Louis Camhi · IDENTIFIED FROM THE TRANSCRIPT
“And so, if you look at all the down rounds in venture capital, they're terrible. I mean, CNBC doesn't talk about them because they're just harder and the information sometimes is tighter kept because these are private companies, not public. If you bought a good company with cash flow, whether it was a SPAC, a direct listing or whatnot, it probably performed the same. And if you bought one that sold you on kind of the long-term dream, which again, a lot of these are really cool innovative companies. I hope they get there because it'll make the world better, but just pretty difficult to put capital behind, particularly when we've had kind of this surge in interest rates over the past few quarters.”
2023-06-19 · Forward Guidance · SPACs Are Bonds, Actually | Louis Camhi · IDENTIFIED FROM THE TRANSCRIPT
“And look, there are a lot of ways to improve the wrapper. I just want to be out there. I like SPACs. I think it's a good product. I think it is far from perfect. It needs to evolve. I want to see better alignment. I want to see sponsors either converting their promote into earn out stock price triggers or locking themselves up for longer terms. There's things that, and some of them are doing it. So that sort of good. But when you just compare when you use Spack to describe this kind of cohort that came public in 2021, I just don't think that's accurate. And one of the things that's interesting is, and we've both said it, like Spacks took a lot of venture capital and brought it public. And we can get into the debate of should VC companies be public? I actually think it's a really interesting debate because you're kind of making a decision on who should be and who shouldn't be allowed to invest in it. But, you know, one of the reasons it looks”
2023-06-19 · Forward Guidance · SPACs Are Bonds, Actually | Louis Camhi · IDENTIFIED FROM THE TRANSCRIPT
“Right. And the point you made earlier is SPACs are a dirty word because a lot of companies, speculative companies funded by venture capital at a ridiculously high valuation, my subjective terms will go public via a SPAC and attract ire. And me too, I have been disapproving of these things, thinking they're overvalued. And in some cases, I've been stupid enough to short some of these things. But it's important to say that your point is Don't compare this speculative electric vehicle stock to the S&P, compare the electric vehicles back to a similar electric vehicle company that went public via an IPO. Guess what? They're both down 80%. The wrapper is not the problem. The problem is what's inside the wrapper. And I would agree with that.”
2023-06-19 · Forward Guidance · SPACs Are Bonds, Actually | Louis Camhi · IDENTIFIED FROM THE TRANSCRIPT
“Redeem and always get my money back if I don't like a deal. And the real hope and we're not there yet going back to the cycle question is there's supposed to be kind of a logical transition between kind of the SPAC ARB guys like myself and the fundamental guys such that when a sponsor does a deal and let's say there's $10.50 in trust at the time it trades up to $11 because fundamental investors in that space say, you know what, this is a really interesting opportunity or when this comes to us private I was following it. I want to own it and then instead of redeeming a guy like me can just sell in the open market rinse and repeat. And when that happens returns are higher redemptions are lower which we can touch on a little later. And when redemptions are lower, you deliver more capital to the target. So that full cycle, which is kind of self-fulfilling, kind of starts moving in the right direction when those dynamics happen.”
2023-06-19 · Forward Guidance · SPACs Are Bonds, Actually | Louis Camhi · IDENTIFIED FROM THE TRANSCRIPT
“The nomenclature is pretty important because I joke around that SPACs have a terrible PR program. When you turn on CNBC, they're bashing SPACs and they're really bashing DSPACs. And it's funny when I hear from like my father who's an investor. My fund saying, you know, I invest in the fund because of you, but I got to tell you another day and another negative comment about a spac on CNBC. And I'd say that let's take a step back. That is not what they're talking about is a D-spack. And so candidly, they create a marketing hurdle for funds similar to mine where SPAC is a dirty four-letter word and maybe an investor's lost money investing in one of those. And it really sometimes takes a lot of time and patience to get in front of these potential investors and say, let me just explain to you what we're doing, what's maybe different from how you thought about SPAC circa 2020, 2021. But the way you described this exactly right, the key is really that trust floor that I know that I can.”
2023-06-19 · Forward Guidance · SPACs Are Bonds, Actually | Louis Camhi · IDENTIFIED FROM THE TRANSCRIPT
“Right. You invest in SPACs in a way that when most people think of SPACs, they do not think about what you do. And so I just want to clarify. So IPO is an initial public offering. I have a shoe company. I'm going to go take it public. Basically a banker issues my shares and then it starts trading. It's a lot more complicated than that. A spac is more complicated where there's an IPO is first with a blank check company, special purpose acquisition company, with a plan to do a reverse merger with my company, a shoe company. So the IPO, it goes public first and then does a merger. SPACS typically priced at $10. And so when people talk about SPACs, oh, that SPAC crashed. It went from $10 to $30 to $1. It became a decent DSP. A SPAC is the actual bond ticker where there's a floor price after it changes its name and it changes its ticker, then it's the same. Some people say, you know, I'm invested in this back. It's trading at $3. It's probably not an actual spac.”
2023-06-19 · Forward Guidance · SPACs Are Bonds, Actually | Louis Camhi · IDENTIFIED FROM THE TRANSCRIPT
“So we're just now starting to get to the point where some of these deals could be interesting to look at, whereas before, you know, I would read some of these investor presentations and say, I really hope that works. That will make my life easier. That is really cool, but I'm not going to risk mine and my investor's capital to pursue that investment. And so what you're seeing now, I would say the way I would frame it in finance terms is a lot of the optionality for the time being of a SPAC is dead. And so what investors like me are looking for is just what's the yield? And if I can get yield with that optionality that I'll value at zero today, but maybe I get lucky. You know, that's really how I'm treating it. And so I'm describing the strategy as this is fixed income plus plus.”
2023-06-19 · Forward Guidance · SPACs Are Bonds, Actually | Louis Camhi · IDENTIFIED FROM THE TRANSCRIPT
“Just goes to show you that it's gotten a lot harder. And one of the things we talked about was a lot of the sponsors back then candidly didn't have the skill set to be a good SPAC sponsor. And to me, that skill set is defined as having proprietary access to deal flow and capital. And so, you know, bankers were making their fees. They were issuing spacs to anyone that could raise the sponsor capital. As we look now, we're still kind of getting away from where we were. The number of spacs is shrinking. The IPO market is starting to rumble a little bit. And we saw Aries just bring their second vehicle. Nice to see a $500 million spac issuance. But right now there's just a lot of doubt as there should be. And we are just now starting to see some interesting deals that are EBITDA and cash flow positive and just deals that you can value on their fundamental merits, dare I say the F word, rather than the 2030 forecast.”
2023-06-19 · Forward Guidance · SPACs Are Bonds, Actually | Louis Camhi · IDENTIFIED FROM THE TRANSCRIPT
“Sure. So when I talked about the cyclicality, SPACs were very in vogue, very popular easy money conditions, the growth of venture capital, this whole idea that I want to own electric vehicles and flying cars, all these deals are really well received. Pipe capital is ample. That bubble is well beyond us. And I just want to point out, and I think we started talking about it last time, that the bubble deflating is obviously not a spac phenomena. you know, speculative phenomena, right? That you're no longer seeing IPOs from electric vehicle and LIDAR companies and plenty of companies, whether they came out via SPAC or via IPO direct listing had their challenges, at least from evaluation front. So I was listening to our interview earlier from last time and at the time there were 500 SPAC seeking targets. And since then, over 200 spacs have liquidated.”
2023-06-19 · Forward Guidance · SPACs Are Bonds, Actually | Louis Camhi · IDENTIFIED FROM THE TRANSCRIPT