March 20, 2022
My name is Sean Luse. To provide background to the following comments, I would describe myself as the average retail investor -- I have only been investing seriously for 2 - 3 years, I have relatively little capital, I have much more knowledge on how to use markets (aka trade stocks and options) than knowledge on how markets, market makers, and other complex but very vital parts of our markets operate. I write this hopefully not to undermine my own comments, but to hopefully stress that my opinions, while my own, may represent a large percent of retail investors, who despite wanting to speculate, grow wealth, and otherwise participate in markets, often operate on less information, and feelings towards our markets and the machinery behind them, that may or may not be entirely correct In short, no matter how many educational efforts, or wealth of information is now available, there will always be a large portion of retail investors such as myself, that hold opinions and views that, despite good intentions may be misguided but nonetheless exist. As such, I hope my comments can be a useful reference towards the feelings and viewpoints of the average American retail investor.
This proposition to allow SPARCs, reflects positively to me on the SEC and our markets, for the following reasons:
1) The SPAC structure allows regular investors like myself to get in on the ground floor of companies, unlike the traditional IPO structure which mainly allows much larger investors and banks to buy in before retail can.
2) However investing in pre-DA SPACs is particularly capital intensive for investors such as myself, who do not have the large amounts of capital to put to work in other securities while our speculation on SPACs plays out. SPACs tend to hover around NAV until news occurs. This can lead to long periods of time with capital sitting in a SPAC, waiting for an announcement, as opposed to other stocks which may have any number of other catalysts / events. For better or worse and as \"irresponsible\" as it may be, retail investors such as myself often go \"all in\" in things we believe in, in order to maximize returns. I imagine amidst inflation and economic concerns, this behavior will increase rather than decrease.
3) As such, SPARCs present a way for the average retail investor to participate in \"IPOs\" (and even in a roundabout way, private markets), while not tying up limited capital for an extended period of time. This, in my opinion, helps level the playing field between banks, hedge funds, and the \"1%\" of retail investors, and the average retail investor.
4) SPARCs do not appear to me, the average retail investor, as materially different in pricing, risk, or amount of speculation than the current SPAC structure. I would feel comfortable doing due diligence on management, potential targets, and share structure as I currently do with the SPAC structure. I believe there were some comments regarding a risk of price action being largely based on rumors / speculation, but I believe that SPARCs would not differ from the current SPAC structure in that regard.
I am sure that some of the finer details of my opinion are incorrect in some complex way, but I hope that the SEC can view my comments here for what they are: Simple (but hopefully valuable to the SEC) feelings towards our markets from a retail investor, which despite not being as knowledgeable as they should be, do exist and will continue to grow in number. I hope that I will be able to have confidence that the SEC works to strengthen the position of the average retail investor vs hedge funds, banks, and the so-called 1% by expanding and improving the ways that we interact with our markets.