BOSTON/NEW YORK (Reuters) – Josh Black was looking for the next lucrative deal after scoring a 500% profit in a few weeks by investing in electric truck maker Nikola Corp NKLA.O following the announcement of its merger with a blank-check acquisition company.

He then invested $23,000 in Spartan Energy Acquisition Corp (SPAQ_u.N) after the special purpose acquisition company (SPAC), backed by buyout firm Apollo Global Management (APO.N), clinched a $2.9 billion deal to merge with electric car maker Fisker.

This time Black wasn’t so lucky.

The mechanic from Cherry, Minnesota is down over 10% on his investment after Spartan’s stock gave up much of its initial gains following the announcement of the Fisker deal last month.

It’s a different story for the big mutual funds, including BlackRock Inc (BLK.N), AllianceBernstein and Federated Hermes Kaufmann, that were invited to finance the Fisker deal – and buy shares in Spartan before it was announced.

Even after the decline in Spartan’s stock, they’re still up about 25%.

To be sure, retail investors who buy into SPACs before they clinch deals pay the same price as big Wall Street firms. But they have to do this without knowing what the acquisition target will be, taking a leap of faith on a SPAC’s management team.

The biggest SPAC investors are treated differently.

Source: Reuters – Wall Street holds the cards as Main Street chases blank-check deal frenzy