Fortress Value Acquisition Corporation - Social Capital

Investor: Chamath PalihapitiyaChamath Palihapitiya

Type of Investment: 💹Public Equity



Below, you see that Chamath invested into a publicly listed company called Fortress Value Acquisition Corporation or $FVAC. However, $FVAC is not the rare earths mine seen above. $FVAC is a special purpose acquisition company (SPAC) which basically means it's a shell of a company who's purpose is to raise money via an IPO and then merge with or acquire an actual company. This sort of thing has been done for a while now.

The Memo


Key Takeaways

  • Pay attention to political news because changes in policy and international relations can quickly create and destroy opportunity.
  • Public equity investments are much heavier on the financial analysis, so it's important to build your sense of certain benchmarks (i.e. what's a good revenue multiple, what are good margins, etc.)
  • You need to be diligent in exploring different sectors and aggressively learning. Rare earth mining is so random, yet the current landscape created a perfect opportunity.
  • Porter's Five Forces is a great way to look at a highly fragmented and competitive market and find opportunity. Battery technology is very competitive, but their suppliers aren't.

Learnings: How to Write a Memo

highlight how they wrote the memo (format, order, story, structure, etc...)