Investing in SPACs that haven't formally identified an acquisition target yet is far from a "sure thing" strategy. But credible rumors indicate that a fintech stock one of our contributors has an eye on is negotiating a merger agreement with blank check company Apollo Strategic Growth Capital (APSG). In this Fool Live video clip, recorded on March 4, Fool.com contributors Dan Caplinger and Matt Frankel, CFP, discuss what they know so far and why this one is worth watching.
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Dan Caplinger: It is Apollo Strategic Growth Capital, ticker is A-P-S-G. There is a same idea here as with Starboard, Apollo (APOL) is a well-known company in venture capital and private equity. It has done a huge number of things. It even has its own publicly traded stock, so totally reputable as a manager. There have been rumors about a month ago that the Apollo SPAC was talking to folks about potentially merging with a company called Solera Holdings, which provides financial software, kind of back-office financial software for insurance companies, and other financial institutions. It has been a pretty hot area lately with plenty of profit potential. Again, this is something that is rapidly becoming kind of a must-see for typical SPACs that I'm looking at, share price right at that $10 mark at this point, so no premium built into it. I haven't really seen anything go forward with the Solera deal. I'm not sure if they did in fact have talks, not sure if those fell through or if they're still working out deal terms or what exactly is going on there. But if there is a company that's going to get a deal done, it would be Apollo, and I think that they have the credibility, the experience to negotiate good solid deals with whoever their acquisition candidate turns out to be. Yeah, so that's what I'm looking at for APSG on my watch list, both on the ones I've got I talked about today. I don't own shares, but they're on a watch list, and I'm kind of keeping an eye on the SPAC space to see if we get some more valuation hits then, I'm going to become much more aggressive about taking a look, and actually putting money to work in this because we start seeing discounts, that's going to be really interesting to me.
Matt Frankel: Yeah. I'd definitely agree. I'm a pretty active SPAC investor myself. But if I start seeing SPACs trading for under $10 a share without deals, that makes the opportunity a whole lot more interesting to me, in the high-quality names especially.