- Investing in Special Purpose Acquisition Companies (SPACs) near NAV provides retail investors opportunities to invest on the shoulders of resourceful and successful sponsors, backers, and management teams.
- Investors often rely on the reputation of a SPAC's sponsor/backer to make investment decisions because the sponsors/backers' ideology and expertise reflect a SPAC's strategy and success to a certain extent.
- DKDCA's prospects looked promising as Serba Dinamik, DKDCA's sponsor, achieved earnings CAGR 16.3% and provided its investors 340% return and 2%-3% dividend yield since 2016.
- Serba Dinamik's recent auditing irregularities and potential mismanagement brought repercussions to DKDCA as DKDCA opened below NAV, reflecting loss of investor confidence.
- With many high-quality SPACs trading near NAV, investors should consider staying away from DKDCA to avoid opportunity costs until proper closure of the matter.
For further details see:
Data Knights Acquisition Corp.'s Distressed Sponsor Is A Deal Breaker, For Now