Great writeup, what do you think of the warrant play instead of buying the commons with the economics being 20-30% yoy gains, does that work the same on the warrants I am guessing too?Great writeup, what do you think of the warrant play instead of buying the commons with the economics being 20-30% yoy gains, does that work the same on the warrants I am guessing too?
The SAIL structure was developed by Morgan Stanley, and to date is only present in two SPACs--HAAC and the more recently IPO'ed CBAH. Ribbit's LEAP has a similar structure.
It doesn't seem like investors have recognized how dramatically preferable the structure is. But there is little chance target companies won't.
As covered earlier in detail, the HAAC investment structure is not a typical SPAC structure and is designed better to align sponsor’s incentives with shareholder interests. The economics is designed in a way that the HAAC sponsors ( initial stockholders) will capture 20%-30% of the year over year gains in share price performance instead of an upfront gain.
SC, I don't understand what this means... I bought shares at $14, what does it mean that initial shareholders will capture 20-30% share performance instead of upfront gain? Can you provide a practical example. Thx
Steve, this applies to sponsors of HAAC and not for you and me. The way they structured the investment vehicle (SPAC), they are rewarded more for performance of the company they acquire over longer period of time than getting rewarded upfront. It shows they are vested in the long term success of the company.
Let me know if you still have questions. The HAAC prospectus has given a detailed example of transactions comparing it with a conventional SPAC. It is on page 3.
Thank you SC, your answer is well enough. It's nice to know that the sponsors have a vested interest which will obviously be advantageous to retail if they stick with the company. :)
It is like a performance fee at 20% to 30% analogous to the performance fees hedge Funds charged. it is only earned if the share price performs. They are aligned in that sense but this is not partnership in the sense that Berkshire Hathaway is a partnership.
An amazing research and a great write-up, SC. This really adds confidence and even more bullish sentiment of HAAC. Thanks for your hard work and share.
Such a great write-up. I was wondering if you had any initial reaction to the SPAC FCAC which is to take Sharecare public? Thanks for the amazing research 👍
I was already very bullish about HAAC, having built a decent size position in HAAC.U at around $11.50. This report has me considering getting even more bullish even if I have to average up. Thanks for the thorough analysis. Very exciting!
HAAC is the common stock, HAACW is the warrant and HAACU is a combination of 1 stock and 1/4 of a warrant.
The reason I own exclusively the Units is that I started buying HAACU before the warrant and stock were split - SPACs typically trade as units until a certain point in time when the units get split into common and warrants. How people decide to buy common, units and warrants is a complex and personal decision that has a lot to do with risk, arbitrage and warrant mechanics. Until you get a solid grasp of all the moving parts, I would recommend sticking to common as it is the most straight forward of the 3.
The entire analysis with the problem statement, opportunities and tailwinds for growth is amazingly told as a coherent story to understand and develop interest for further due diligence and developing conviction. Learnt a great deal and developed tremendous interest in this space.
An AMAZING write up! THANKS for the OPPORTUNITY to be onboard at this early stage. I know of only one other site that gives us little guys such an opportunity.
My prediction is EPIC SYSTEMS, which you mention under the “FHIR” section of your analysis, which is FHIR AS WELL btw, thank you. EPIC would be EPIC and a 100 billion company easy. BULLISH. BOATLOAD
To be clear, the investors who buy $haac shares aren't only capturing 20-30% of the overall profits correct? I am a bit confused and wouldn't want my investment 'watered down'
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Great writeup, what do you think of the warrant play instead of buying the commons with the economics being 20-30% yoy gains, does that work the same on the warrants I am guessing too?Great writeup, what do you think of the warrant play instead of buying the commons with the economics being 20-30% yoy gains, does that work the same on the warrants I am guessing too?
The SAIL structure was developed by Morgan Stanley, and to date is only present in two SPACs--HAAC and the more recently IPO'ed CBAH. Ribbit's LEAP has a similar structure.
It doesn't seem like investors have recognized how dramatically preferable the structure is. But there is little chance target companies won't.
This is such a well researched/written report. thanks for sharing. Any plans to do look into cyber security companies?
HAAC’s stakeholder aligned structure (SAIL) :
As covered earlier in detail, the HAAC investment structure is not a typical SPAC structure and is designed better to align sponsor’s incentives with shareholder interests. The economics is designed in a way that the HAAC sponsors ( initial stockholders) will capture 20%-30% of the year over year gains in share price performance instead of an upfront gain.
SC, I don't understand what this means... I bought shares at $14, what does it mean that initial shareholders will capture 20-30% share performance instead of upfront gain? Can you provide a practical example. Thx
Steve, this applies to sponsors of HAAC and not for you and me. The way they structured the investment vehicle (SPAC), they are rewarded more for performance of the company they acquire over longer period of time than getting rewarded upfront. It shows they are vested in the long term success of the company.
Let me know if you still have questions. The HAAC prospectus has given a detailed example of transactions comparing it with a conventional SPAC. It is on page 3.
Any chance you could post a link? Thx.
https://www.sec.gov/Archives/edgar/data/1824013/000110465920125930/tm2031762-17_424b4.htm
Thank you SC, your answer is well enough. It's nice to know that the sponsors have a vested interest which will obviously be advantageous to retail if they stick with the company. :)
It is like a performance fee at 20% to 30% analogous to the performance fees hedge Funds charged. it is only earned if the share price performs. They are aligned in that sense but this is not partnership in the sense that Berkshire Hathaway is a partnership.
Wow, what a great write up , thank you!
An amazing research and a great write-up, SC. This really adds confidence and even more bullish sentiment of HAAC. Thanks for your hard work and share.
Such a great write-up. I was wondering if you had any initial reaction to the SPAC FCAC which is to take Sharecare public? Thanks for the amazing research 👍
It is on my watchlist. Planning to look into it more next week.
I was already very bullish about HAAC, having built a decent size position in HAAC.U at around $11.50. This report has me considering getting even more bullish even if I have to average up. Thanks for the thorough analysis. Very exciting!
What is difference between HAAC and HAACU?
HAAC is the common stock, HAACW is the warrant and HAACU is a combination of 1 stock and 1/4 of a warrant.
The reason I own exclusively the Units is that I started buying HAACU before the warrant and stock were split - SPACs typically trade as units until a certain point in time when the units get split into common and warrants. How people decide to buy common, units and warrants is a complex and personal decision that has a lot to do with risk, arbitrage and warrant mechanics. Until you get a solid grasp of all the moving parts, I would recommend sticking to common as it is the most straight forward of the 3.
Thanks for taking time to explain.
The entire analysis with the problem statement, opportunities and tailwinds for growth is amazingly told as a coherent story to understand and develop interest for further due diligence and developing conviction. Learnt a great deal and developed tremendous interest in this space.
Great analysis !
Amazing insights. It helped me to connect dots happening in this space. Thank you Soumyazen
amazing thread. subscribed!
An AMAZING write up! THANKS for the OPPORTUNITY to be onboard at this early stage. I know of only one other site that gives us little guys such an opportunity.
Tremendous write up.
My prediction is EPIC SYSTEMS, which you mention under the “FHIR” section of your analysis, which is FHIR AS WELL btw, thank you. EPIC would be EPIC and a 100 billion company easy. BULLISH. BOATLOAD
To be clear, the investors who buy $haac shares aren't only capturing 20-30% of the overall profits correct? I am a bit confused and wouldn't want my investment 'watered down'