4 ms·
Anyone apparently can merge with a SPAC (an existing company that is already a listed stock) by basically buying a very weak company. After the merger now you a
by NotSammyHagar 6y ago
Anyone apparently can merge with a SPAC (an existing company that is already a listed stock) by basically buying a very weak company. After the merger now you are on the stock market! There's no mechanism of testing the company before the merge, it just happens if they have the money to buy the weaker company.
- marvin 6y agoTo be fair, getting listed on the stock exchange before being a billion dollar behemoth should be legal/possible in the first place.
- mrpopo 6y agoSo that more multi-million dollars scams can pop up?
- bhupy 6y agoNo, so that public investors can participate in growth just like private institutional investors (and rich accredited investors). Preventing million dollar corporations from going public is an extremely ham-fisted way of policing/preventing scams.
- marvin 6y agoThe fact that this attitude is an easier political sell than the more complex but more fair alternative, is exactly the reason why the rules were changed so you had to already be rich to e.g. be allowed to invest in Facebook before they went public at a $100 billion valuation in 2012. Imagine, Facebook's valuation was less than $100 million at one point, and people considered it exuberant back then. Factor of 1000 difference even with the IPO valuation. The mind boggles.