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Jim Cramer Vs. Chamath Palihapitiya: The SPAC War Hits Twitter

Chris Katje
·3 mins read

CNBC's Jim Cramer has been bashing SPACs on Twitter and his show this week. That drew attention from the so-called SPAC King Chamath Palihapitiya.

What Happened: Cramer recently highlighted Spartan Energy Acquisition (NYSE: SPAQ), a SPAC merging with Fisker. Cramer compared Henrik Fisker and his company to Nikola (NYSE: NKLA) and Trevor Milton, the Nikola founder who resigned.

On Wednesday, Cramer told his 1.4 million Twitter followers “I am sick of SPACs!.” A simple response came from Palihapitiya:

Cramer’s Thoughts On SPACs: Cramer tweeted to “Squawk Box” host Andrew Ross Sorkin, “Why do investors think that every SPAC is a winner.” Cramer got the following response from Sorkin:

Cramer went on to say that SPACs make his job hard “because I have to learn each one and there are so many of them.” He said there is “massive homework” needed on SPACs.

Cramer took the SPAC market further by comparing the risks of SPACs to the 2000 dot-com bubble:

He later admitted the SPAC market is difficult to learn:

Chamath Chimes In: Palihapitiya noticed the question Cramer posed to Sorkin and shared his thoughts:

Palihapitiya recently shared his thoughts at the Benzinga Boot Camp offering up the bull and bear case.

“It unlocks access to growth companies to a broad cohort of people that were otherwise shut out,” Palihapitiya said.

He cautioned that the SPAC process is hard and investors need to believe in the management team. He cited his “skin in the game” of personally investing in the deals his company completes. Palihapitiya said investors are betting on the decision making and access that the management team has.

What’s Next: Cramer is teasing that SPAC people will love his “Mad Money” show Thursday night. We will see if that means discussion on SPACs or a special guest to discuss the sector. Maybe Palihapitiya is ready to set the record straight.

Palihapitiya’s Social Capital Hedosophia II (NYSE: IPOB) is set to merge with Opendoor. Social Capital Hedosophia III (NYSE: IPOC) is actively searching for a target company. Palihapitiya’s next three SPACS IPOD, IPOE and IPOF are getting close to debuting.

Photo courtesy of Tulane University.

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