Matt Levine, Columnist

The SPAC Bust Is Expensive

Also Melvin Capital, a DeFi hack, a foreclosed ape and some Musk stuff.

May 20, 2022 at 5:41 PM UTC

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

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A common enough structural feature in financial markets is:

I don’t think that this is the general mechanism of financial markets or anything — I don’t think that, like, “the smart money” is off buying one asset class while the rubes are buying something else — but it is definitely a mechanism. For instance this could roughly describe much of venture capital, where VCs put money into startups at low valuations, and then those startups take off and go public at higher valuations. Or it describes some of crypto, where VCs make billions selling, for instance, Luna tokens to retail just before they crash.