FikaBits: What's SPAC-ing?

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NextDoor is Zucked

Last week, techcrunch reported that Facebook is working on Neighborhoods -a NextDoor clone- based on Facebook's local groups. 

What are the take-aways?

If there was ever a time for everyone’s subtlety bigoted grandparents to get on Facebook, now’s it. Joking aside, Neighborhoods aligns very well with Facebook's strategy focusing on groups. NextDoor has been in hot water for inadvertently fostering racism. Facebook’s track record with moderating groups - or lack of - suggests it will not be able to avoid the same.

Facebook is well-versed in copying features from other apps - just ask SnapChat and TikTok - to limit their growth. I expect this will do the same for NextDoor and force it into the arms of a SPAC.

Quibi: Now Quiti

Quibi, the app that staked its future on short videos, is shutting down just six months after it launched. Earlier, there were discussions that the app would be snapped by a SPAC. It turns out that Quibi is not even good enough to attract a SPAC.

Quibi has partly blamed timing for its failure. In my opinion, it likely failed because its content wasn't compelling enough to charge $5-$8/month. Those "in-between" moments still exist — but they're dominated by extra-short, user-generated content on free apps like Instagram, TikTok, and Snap. And those are thriving today.

A SPAC to buy Bloomberg

Also last week, the New York Post reported that Bill Ackman’s SPAC wanted to take a stake in the former New York mayor Mike Bloomberg’s eponymous media empire. The Post argues that Bloomberg and other large, well-known private firms don’t need a SPAC to go public.

I see what the Post is saying about Bloomberg being able to afford underwriters but it makes more sense and it’s more efficient to use a SPAC in this case. For more information on SPACs and why they are the trend du jour in investing, check out this post.


Disclaimer: This post is merely my own assessment and is not an investment recommendation. For professional advice, seek input from a licensed investment advisor.

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