Rangeley’s Chris DeMuth Jr. on Value Investing and SPACs

by | Jan 19, 2022

Chris DeMuth founded Rangeley Capital and focuses on SPAC and Value investing. Trained in event-driven situations, Chris has a history of consulting for funds and bank prop desks in his earlier career. He brings a very impressive and analytical framework to his investing style.

These days, and in line with us here at Boardroom Alpha, Chris is also spending a lot of time doing SPAC investing, even joking that at the onset of the idea that you can make speculative investments with a built-in redemption feature as almost too good to be true.

In addition, the concept that adversarial parties are involved at all steps of the way in a SPAC transaction results more efficient for price discovery. Chris looks for sponsors that have proven track records and that are deep pocketed, which is comforting in from a financing and deal alignment perspective.  

We talk to Chris on several topics from SPACs to SEC regulation to ARKK, he’s super interesting. Have a listen.

Topics Covered

  • Introduction to Chris Demuth and how he got here
  • What’s piqued interest in SPAC
  • What makes an attractive SPAC sponsor or SPAC deal
  • SPAC Risk capital
  • Thoughts on general state of SPAC market
  • De-SPACs are down, what’s the story there
  • SEC and increased regulation
  • 2022 things to look out for

2 Things to Watch out for from Chris

Planet Labs (PL)

Planet Labs, led by CEO Will Marshall, De-SPACed in November 2021 following a merger with Niccolo de Masi’s dMY Technology IV (DMYQ). Chris finds Planet to be undervalued as the company hasn’t yet marketed to the public the true extent of the uses of Planet’s data.
 
You can listen to our podcast with Will and Niccolo here.

Planet’s stock has had a rough go in the early days of De-SPAC, but as Chris mentions, need to have a longer time horizon to judge success here. Chris is a supporter of the dMY line of SPACs.

Corporate SPACs

Chris says to look out for big, corporate backed SPACs with a large sponsor or affiliate interest and strategic interest in PIPEs. One being, Liberty Media Acquisition Corp (LMACA), backed by Liberty Media and led by CEO Greg Maffei.

A big fan of Greg Maffei, calling their 2009 acquisition of Sirius as one of the best M&A deals of all time. Chris has backed LMACA and expects them to be immune to some of the negative market conditions in the PIPE market.

Liberty Media Acquisition raised $575M in its SPAC IPO back in January 2021, and is one of the only Pre-Deal SPACs actually trading at a premium to the SPAC’s NAV ~$10.26.

<a href="https://www.boardroomalpha.com/author/draps/" target="_self">David Drapkin</a>

David Drapkin

Spent his formative years at Goldman Sachs and now embraces the start-up life in NYC. A long suffering Oakland (Las Vegas) Raiders fan and graduate of the Wharton School at the University of Pennsylvania. Semi-professional go-kart racer waiting for his shot.

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