What You Need To Know This Week — February 20th, 2021

Julian Klymochko
4 min readFeb 20, 2021

What You Need To Know This Week

A weekly recap to keep you informed on the most important events this week impacting markets, business, tech and the global economy.

“DIAMOND HANDS” KEITH GILL TESTIFIES TO CONGRESS ON GAMESTOP SAGA
34-year-old Keith Gill, a retail investor known in his YouTube videos as Roaring Kitty, had become the face of the WallStreetBets-fueled meme stock rally in shares such as GameStop after turning a $50,000 investment into as much as $40 million at its peak through shares and call options in the video game retailer. Gill was hauled in front of the House Committee on Financial Services to testify on GameStop trading activity in January. In his testimony, Gill denied the assertion that he used social media to influence thousands of investors to speculate on GameStop shares, claiming only that he “like[s] the stock.” GameStop shares continue their descent, falling -92% from their peak in January and signalling perhaps the end of meme stock investing.

BITCOIN MARKET CAPITALIZATION REACHES $1 TRILLION
Fueled by a 92.2% year-to-date rally in price, bitcoin reached a $1 trillion market value for the first time this week. The recent surge has been driven by institutional buyers, including corporations such as Tesla and MicroStrategy, endowments including Harvard and Yale, insurance companies such as MassMutual, and the long-awaited launch of bitcoin ETFs. Ironically, we expect to see a flood of institutional buying with bitcoin at a new all-time high, given the asset class now exceeds $1 trillion — a level that many institutional investors require prior to allocating. It is now seemingly only a matter of time before bitcoin is a default allocation in diversified investment portfolios. As a reminder, bitcoin has a 10% weight in the Accelerate OneChoice Alternative Portfolio ETF (TSX: ONEC).

LITHIUM-ION BATTERY RECYCLING COMPANY LI-CYCLE TO GO PUBLIC THROUGH SPAC PERIDOT ACQUISITION
Toronto-based Li-Cycle, a lithium-ion battery recycling startup founded in 2016, has entered into an agreement to merge with blank check company Peridot Acquisition Corp. The going-public transaction, which values North America’s largest lithium-ion battery resource recycling company at $1.1 billion, is expected to raise $615 million in proceeds to fully fund the company’s planned global expansion. Once public, Li-Cycle will represent a bet on the growing use of recycled batteries in addition to increasing demand for lithium-ion power sources for emerging products such as electric vehicles. Shares of the SPAC gained 17.3% this week on news of the deal. Peridot Acquisition is held in the Accelerate Arbitrage Fund (TSX: ARB).

Notable Insights, Articles, Podcasts, and Tweets

Listen to Accelerate CEO Julian Klymochko discuss the current state of the SPAC market with Jim Grant and Evan Lorenz on the Grant’s Current Yield Podcast.

Join Julian Klymochko, CFA, Kenton Shouldice, CFA and Ari Pandes in a CFA Society Calgary webinar as they discuss the GameStop short squeeze and the ramifications it has on the future of retail investing and the market.

Listen to the “SPAC King” discuss his views on the blank check market and a rational approach to investing in SPACs.

Blank check firm Churchill Capital IV is rumoured to be in talks to merge with Lucid Motors. If a definitive deal gets announced, “I’d assume the $10 PIPE financing will be the most competitive deal of all time.”

There could be a bit more creativity in the special purpose acquisition company sector, especially after “Just Another Acquisition Corp” filed for an IPO.

Do you know what is creative? A rap song about SPACs. Oakland recording artist Cassius Cuvée found investment success investing in blank check companies, so he made a music video espousing their potential.

Michael Burry, of “The Big Short” fame, sold his large stake in retailer GameStop in the fourth quarter, right before the stock’s 4,000% surge.

As predicted in last week’s Absolute Return Podcast, Inter Pipeline has put themselves up for sale and will run a full-blown auction process following the hostile takeover offer from Brookfield Infrastructure.

Financial Times: “Bitcoin is emerging from the shadows, being co-opted by establishment institutions and becoming a legitimate alternative asset for investment portfolios.”

-The Accelerate Team

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Julian Klymochko

Founder and CEO of Accelerate Financial Technologies. Learn more at AccelerateShares.com