Industrial Tech Acquisitions Incorporated (NASDAQ: ITACU) is gaining momentum ahead of its IPO on the 9th September, yet it’s all quiet on the media front. Astronomical surges are now commonplace in the COVID-19 stockmarket, all because of volatility. However, retail investors often hear about the company after the unrealistic gains happen. Ultimately resulting in one big wrestle between the investor and their emotions.
Table of contents 1. Why is SPAC ITACU so special? 2. The huge risk/reward play with Industrial Tech 3. Does YIG see potential in an Industrial Tech Investment?
Who are Industrial Tech Acquisitions, and why are they worth watching ?
Industrial Tech Acquisitions is a Special Purpose Acquisition Company (SPAC). ITACU’s sole intention is to find a company to acquire. In ITACU’s case, they are searching for Northern American companies who specialise in industrial and energy technology. Hence the sudden spike in ITACU’s IPO behind closed doors. However, before we progress if SPAC or PIPE investors sound unusual, YIG strongly suggests you read our simple explanation. Otherwise, you will be at an information disadvantage.
Essentially, Industrial Tech Acquisitions is a blank canvas. Because ITACU does not have a merger on the table, let alone a specific target company in sight. On the 9th September, ITACU is going public with no product offering. However, this is how most SPAC IPO’s play out. Once Industrial Tech Acquisitions enter NASDAQ, they start the two-year hourglass. Some investors might be scratching their head as to why it is worth considering Industrial Tech when they are a blank canvas?
Is investing before ITACU find an acquisition a smart play?
In short, investing before the acquisition is what we could call a smart trading idea. However, it still holds risk that investors must mitigate. The general story of a SPAC is they IPO, then they find a blockbuster company to acquire. Soon after the retail investors pour in, and the stock skyrockets, followed by a correction. Thus, getting in before ITACU even find a technology company to acquire allows investors to enter at the point of maximum financial gain. (opinion not advice) However, the fairy tale SPAC story could turn into a nightmare if ITACU fails find an acquisition in time or the acquisition does not receive the expected hype.
Investing is largely based on mitigating the risk while maximising the return. In a fairy tale scenario, you could invest before IPO and set profit targets after the IPO hype, and once ITACU acquires the technology company. Alternatively, if you are more risk-adverse, then investing a small amount of capital followed by bigger positions as the ITACU story improves is another option. YIG would like to stress that these methods to mitigate risk are not financial advice but investment commentary.
Does YIG see value in an Industrial Tech Acquisitions investment?
Before I begin, I am obliged to remind our viewers that this is not advice but rather investment commentary from extensive research.
Short answer: Investing in ITACU could potentially pay-off. However, an investment will be met with risk/reward situations that each investor must mitigate. (opinion not advice)
The expectation is that ITACU will find an emerging technology company and will follows the bullish suit of previous SPAC’s such as SHLL, Nikola Motors, and Draftkings. Finding a high-growth, and thus a speculative tech company should not be a difficult task. Especially considering the accelerated technology disruption and the fact that SPAC’s are a fast pass for a company to go public. Not to mention the management has networks in the technology sector. For example, CFO Greg Smith was the CEO of ERF Wireless and Infrastructure Networks. However, an Industrial Tech Applications investment still holds considerable risk that could eviscerate an account if left unchecked.
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The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
Written by Patrick McLoughlin, Senior Manager of YIG.