Boston Omaha Corporation (BOC 3.07%) recently created its own special purpose acquisition company, or SPAC, called Yellowstone Acquisition (YSAC.U). If investors think it will be a success, should they buy shares of Yellowstone, or should they invest in Boston Omaha itself?
In this Motley Fool Live video clip from November 16, Fool.com contributor Matt Frankel, CFP, and Industry Focus host Jason Moser discuss the differences investors need to know in order to make an informed decision.
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Jason Moser: Next question here, JDG Fool. "Hey, JMo and Matt." Hey, JDG Fool. "Matt, can you explain these SPAC with BOMN, and if we bought YSU, will they turn into BOMN stock?"
Matt Frankel: That's a lot of letters there, JMo.
Jason Moser: Is a lot of letters.
Matt Frankel: Let me translate that a little bit.
Jason Moser: BOMN is Boston Omaha, I know that.
Matt Frankel: There you go.
Jason Moser: But what was the other one, YSU?
Matt Frankel: Boston Omaha just created its own SPAC. I did a whole half-hour about this a couple of weeks ago. SPAC is a blank check company, it's created for the purpose of acquiring another company. Their new SPAC is called Yellowstone Acquisition, which is where the YSU comes from. So that's their SPAC. It's currently being sold as units. YSCAU, I believe is the ticker for that. Maybe you can check that while I'm talking.
Jason Moser: YSCAU?
Matt Frankel: YSCAU, I believe is what it is. That's Yellowstone Acquisition, that's the unit. It will not convert into Boston Omaha stock.
Jason Moser: YSACU, yeah.
Matt Frankel: There you go. I was close.
Jason Moser: Yeah, you were.
Matt Frankel: Yellowstone is being sold as units, which right now it comes with a share of the SPAC and a portion of a warrant to buy another share at some point. When they find an acquisition target and complete the acquisition, those shares will turn into shares of whatever that company is, not Boston Omaha. If you want to invest in Boston Omaha, buy Boston Omaha. Again, I did a whole half hour on their SPAC and how it works. If you invest in Yellowstone, you're essentially betting on Boston, Omaha's management to find a good acquisition target. You're not betting on Boston Omaha's businesses itself. They are completely separate businesses, two completely separate investment objectives. Don't buy Yellowstone because you want to invest in Boston Omaha, buy it because you want to bet on the management team.