Special Purpose Acquisition Vehicles (“SPACs”) are still in the news a lot, lately mostly negative. Remember there are still a lot of misconceptions about what a SPAC is and is not (hint: once a company merges with a SPAC it is no longer is a SPAC). There are also a lot of misconceptions about how to invest in SPACs (hint: buying $10/share worth of cash for $16 without a deal or a rumor is probably not a great idea).
We have been seeing some interesting news and notes from some SPAC trading firms.
I recently commented on a point made by our friends at United First Partners concerning whether follow on SPACs are better than first time issuers.
Additionally, in today’s newsletter from Stifel (03/24/21), Stifel noted that 21 of the 105 pending SPAC mergers are currently trading below $10. Makes you wonder why people don’t just buy them ahead of the vote knowing your worst case is you get trust value. They also noted that deal size seems to matter in SPAC pricing as the smaller deals tend to be the ones that trade under $10.
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