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> Now the SPAC is just a box containing $80m dollars (well, actually, significantly less than $80m due to all the bank fees, but let's pretend). why would it b
by vmception 6y ago
> Now the SPAC is just a box containing $80m dollars (well, actually, significantly less than $80m due to all the bank fees, but let's pretend).
why would it be significantly less? the SPACs have underwriters and all the crap that normal IPOs have, unburdening the target company from doing this stuff?
I was somewhat imagining that the SPACs themselves have a very streamlined listing process and there is enough interest in the shares to not need an underwriter.
A SPAC could surely do a direct listing...
- Lazare 6y agoYes, the SPACs have their own IPO with underwriters and fees. And then more fees for doing the merger with the target company. It is somewhat more streamlined, so fees will be on the low side. Often 2% for the initial IPO, then and other 3.5% for the merger, I think? Although with a ton of flexibility and variability and fees hidden in complex structures. Also note that investors can opt to redeem their investment when a merger target is announced, and statistically most money is redeemed, so 2% of the initial amount raised going to be well over 4% of the amount the company receives. There's a reason banks LOVE SPACs and are promoting them heavily and is sure isn't that they get less money from them than IPOs. :)