The SPACs just keep coming. EV manufacturer Lucid Motors plans to IPO via Michael Klein’s Churchill Capital. Zero revenue and a $24 billion proforma valuation. I find it fascinating that “sober” investors such as Fidelity and BlackRock participate in these bubble deals. Link HERE.
Another SPAC listing will take place when Apex Clearing completes its deal with Northern Star Investment Corp. II. Apex provides securities clearing and custody services and will command a post-deal valuation of $4.7 billion or 55x trailing EBITDA, making SSNC look attractive by comparison. Fidelity, Baron and others are participating in the Apex deal. Link HERE. Growth stocks are at risk as the long rate continues to climb, although we expect the Federal Reserve to increase its QE efforts in the coming weeks. That said, the Fed can’t print in perpetuity.
Bitcoin and The Fed’s digital currency experiment. Bitcoin crossed the trillion dollar market cap threshold over the weekend. Treasury Secretary Janet Yellen talked down Bitcoin (Link HERE) and talked up the Fed’s digital currency experiment (Link HERE). Our previous articles on a Federal Reserve-issued digital currency may be found HERE and HERE. Should the Fed issue a digital currency (we fully expect it to do so by 2030), our view is that the central bank will regulate Bitcoin and other digital currencies to make them comparatively less desirable than the digital U.S. Dollar.