In these bubbly days, imitation appears to be be the sincerest form of fattening up investor returns.
In hopes of recreating the “investor confusion” ramps observed so often in late 2017 when companies scrambled to “pivot” into crypto by adding “blockchain” to their names in hopes of sparking buying interest, Bloomberg reports that a new SPAC – the New York-based 5G Edge Acquisition Corp – filed paperwork earlier this week to go public under the symbol “ARK”, which just “coincidentally” is strikingly similar to Cathie Wood’s popular ARK ETF tickers.
While it is possible that the name naming of the “5G” SPAC is just a creative consultant gone wild, the most likely explanation is that in hopes of piling on buzzwords to prompt confused retail investors to just buy, buy, buy, the SPAC decided to also piggyback on one of the icons of the current market mania, Cathie Wood’s own ARK[X] ETFs, whose name has become a staple in the financial media.
As Bloomberg further notes, while “ticker confusion among investors is not new in the stock market” the “recent rush into the market by inexperienced retail investors chasing quick gains has created some particularly memorable episodes of ticker confusion during the pandemic.”
Some vivid examples profiled here and elsewhere include Signal Advance Inc., a tiny medical device company, which soared more than 5,000% in the three trading days after Elon Musk tweeted “Use Signal,” in reference not to the pennystock but the encrypted messaging service. Another time, the popularity of Zoom Video Communications has resulted in brief surges in the shares of the completely unrelated Zoom Technologies, after traders confused its ticker symbol “ZOOM” with that of the video-conferencing company. Zoom Technologies, a Beijing-based maker of mobile phone components, later changed its ticker to “ZTNO”.
And now, at least one SPAC is hoping to base its entire trading vehicle on piggybacking on similar creative “camouflage” confusion in hopes of reaping tendies, to use the parlance of our times. Some jokingly mused if the SPAC is also run by Kathie Woo (with a K).
“SPAC called 5G Edge wants to go public under ticker “ARK.”
Run by Kathie Wood.. with a K?
Reminds one of old Addidas knock offs with 4 stripes as well.
— PlungeProtectionTeam (@gamesblazer06) April 1, 2021
As Bloomberg notes, “5G Edge touts its management team’s experience in technology, media and telecommunications businesses and may seek out potential businesses to merge with in that sector, including those in software, fixed and wireless communications but not exclusive to 5G-related businesses, the filing said.”
And just in case the management team isn’t all that “experienced”, the SPAC admins at least hope that it will be confused with one of Cathie Woods own highly popular ETFs. And while imitation may be flattery, Bloomberg notes that Wood’s Ark Investment Management pushed back when SPAC Ark Global Acquisition, which also has no affiliation to Wood nor her firm, began trading.
That said, it’s debatable if being named after Wood’s ARK is an asset or, increasingly, a liability. While Wood’s ETFs have seen their share of turmoil in recent weeks as many of the names owned by Wood tumbled, we now seem to be in the euphoria phase again. As we reported earlier, a whopping $717 million flowed into the $23 billion flagship Ark Innovation ETF, which trades under the ticker “ARKK” on Wednesday. It and another Ark ETF added around $1 billion in a single day this week.