Jay-Z & Other Celebs Forced To Bear Some Bad News.  Investing In Their SPAC Is A Great Way To Lose Money.

FILE - Jay-Z arrives at a special screening of "The Harder They Fall" at the Shrine, on Wednesday, Oct. 13, 2021, in Los Angeles. A fragrance company's lawsuit against rapper Jay-Z over breach of contract claims, and his subsequent countersuit against the company, were both rejected Wednesday, Nov. 10, with a jury finding that neither side had proven its claims and awarding no damages. (Photo by Richard Shotwell/Invision/AP, File)

2021 was an interesting year in so many ways. One was the rollout of roughly 33 SPAC’s that were tied to celebrities or famous public figures. As a general rule, they were mostly a bomb, as 21 of the 33 posted negative returns, with some being epic failures. 

Jay-Z’s was by far the worst-performing of all, as his took a mind-numbing 84% free fall. 

Investors may have learned a valuable lesson this year. Celeb-backed SPAC might be shiny and exciting, but tens of millions of social media followers do not equate to a strong investment opportunity.  

Only two of the 33 celeb SPACs posted gains of more than 10%.  The S&P 500 had a 24% rally on the year in comparison. 

 Jay-Z’s massive dud was the cannabis-based “The Parent Company.” 

Another big loser was Velo3D Inc, backed by Serena Williams, which was down 25%. 

Colin Kaepernick headed up other celeb-backed flops and even Bill Gates-backed a company called Evolve Technologies Holdings that is down 51% since it hit the market. 

No celebrity is more willing to put his name on a product than Shaquille O’Neal, and his new venture that collaborates with Beach Body was as successful as Shaq was at the free-throw line when he played in the NBA. 

Here’s the lesson learned by investors according to Matt Tuttle, the owner of Tuttle Capital Management, a firm that invests in SPACS. 

“Celebrities are eye candy, unless there’s really good reasoning to have them on board. At some point these companies need to deliver on a real mission, and it becomes less about the marketing and more about the strategy.”

There was one celeb-backed SPAC that has killed it so far in 2021.  The one connected with Donald Trump is up more than 400%. 

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