SPACs, Explained
Q What’s a SPAC? — H.L., Middleton, Idaho
A The letters stand for “special purpose acquisition company.” While SPACs aren’t new, they’ve become more highprofile in recent years as some major investors and entities have gotten involved in them.
In a nutshell, SPACs — sometimes referred to as “blankcheck companies” — have no manufacturing or service operations. They are formed in order to hold initial public offerings (IPOs) and collect cash in exchange for their shares; that cash is then used to buy or merge with another company. *** Q When is the right time to sell a stock? — T.S., Kirkwood, Missouri A There are many reasons you might want to sell, such as: You don’t know much about the company and can’t explain exactly how it makes its money. You’re holding shares mainly for sentimental reasons. You’ll need the money within three to five years. (You don’t want a market crash to happen just before you plan to use the money. Keep shorter-term money in more stable places, such as savings accounts or CDs.) The stock is significantly overpriced. The reason you bought it is no longer valid — perhaps due to a competitor taking its market share.
If you can’t remember why you bought shares, consider selling. (It’s not a bad idea to keep written records of why you bought various stocks and when you might sell, and revisit those reasons periodically.)
Selling can also be a good move if you find a more promising investment. Don’t trade too frequently, though, as that can hit you with short-term capital gains tax bills. And do be patient with very promising companies — just because many others are selling a stock is a bad reason to do so.
The Houston Texans and star defensive lineman J.J. Watt have agreed to part ways, both parties announced Friday.
Watt asked for his release after spending the first 10 years of his likely Hall of Fame career in Houston. The Texans free up $17.5 million in cap space by cutting Watt. The 31-year-old made five All-Pro teams and was named the Defensive Player of the Year three times. He also won the Walter Payton NFL Man of the Year award in 2017 after raising more than $37 million for hurricane relief.
So where will Watt land?
It’s likely Watt will have several suitors, including possibly the Patriots. The Pats have needs across their defensive front, where he could play several positions. Watt will be free to sign as soon as his release becomes official.
The Patriots ended the reg
ular season with almost $20 million in cap room, which they’ve rolled over into the 2021 league year, when they will start with the fourth-most cap space in the league at a projected $60 million to $63 million. Watt’s price tag is unclear in a fluctuating market that’s about to be reframed by a lower salary cap come March.
Watt’s experience with former Texans coach Bill O’Brien and current executive vice president of football operations Jack Easterby, both former Patriots, could affect his views on signing in New England. According to reports, Watt’s relationship with O’Brien soured at the end of the head coach’s tenure, and multiple players have expressed dismay at how Easterby has run the franchise since being hired in 2019.
While injuries have taken their toll on the 6-foot-5, 290-pound Watt, he played in every game last season, notching five sacks, two forced fumbles and 52 tackles. He also deflected seven passes, including three in a win over the Patriots last November.
Watt finished the season as the seventh-best edge player in the NFL, per Pro Football Focus player grades. He totaled 45 pressures and also graded as one of the best run defenders in the league, regardless of position. In New England, he would instantly become the team’s best defensive player outside the secondary. Prior to that game, Belichick said of Watt: “I think honestly the experience that J.J. has is very valuable for him. Obviously, he has a lot of skill — he’s long, he’s strong, powerful, very quick — but his experience and anticipation is outstanding. And going up against a player who doesn’t have as much as J.J. does and hasn’t played against him, I think you really have to be mindful of the tricks that J.J. has up his sleeve.
He doesn’t do the same thing every time.
“He does a good job of taking advantage of opportunities or changing his techniques based on the situation. He’s a tough guy to play against. So, I think his experiences is a big asset for him. I know Mike (Onwenu)’s studied him hard and will be ready to go, but until you actually face a guy J.J., it’s hard to replicate him in practice or what it’s really going to be like during the game.”