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But critically, the misprice is not what matters to the companies raising money. What matters to them is the amount of money they’re able to raise initially, an
by ketzo 6y ago
But critically, the misprice is not what matters to the companies raising money. What matters to them is the amount of money they’re able to raise initially, and that can be higher in a SPAC deal. Or it could be lower! But it’s less volatile.
- deleted 6y ago[deleted]
- beervirus 6y agoBut from first principles, it should basically always be lower.
- ketzo 6y agoYeah, but even if it's lower, the number is certain, decided on over the negotiating table. In an IPO, you don't know till the day of your IPO exactly how much you're going to raise.
- dimes 6y agoWhen a company does an IPO, they hire an underwriter that guarantees that they'll sell a specific amount of stock at a specific price. So the company knows how much money they'll raise by the time the first day of trading arrives.