4 ms·

Well, the rules of a SPAC are that if it doesn't close then the investors get their money back, and the "leader" (I don't know the technical term) of the SPAC j

Well, the rules of a SPAC are that if it doesn't close then the investors get their money back, and the "leader" (I don't know the technical term) of the SPAC just loses out on any money, time, and effort spent trying to close a deal. Not sure what disclosure that would warrant for investors except "make sure you ask for interest when you get your money back".

maxfurman 4y ago
Isn't the bigger risk that the SPAC closes at an insanely inflated price and the investors get stuck holding the bag?
- MichaelBurge 4y ago
  No, because the investors can individually choose to decline the deal and get their money back with interest. Any investors remaining after the deal closes implicitly agreed to the closing price. I don't think there were any cases of a SPAC not returning deposit money if someone asked, and the institutional investors generally preferred the "guaranteed return" over gambling so the redemption percentage was quite high(I think 50%+).
- MangoCoffee 4y ago
  SPAC investors can back out for example: Buzzfeed https://nypost.com/2021/12/02/buzzfeed-investors-pull-funds-as-company-plans-to-go-public-via-spac/ https://nypost.com/2021/12/02/buzzfeed-investors-pull-funds-...
paxys 4y ago
In this case the article is talking about the SPACs that did "close", but the combined company is possibly not going to stay afloat for another year.
- sbarre 4y ago
  And that's a possibility for any business... Private businesses are run into the ground all the time, including those that raise funds through friends & family or angel investors... (Not saying you're implying otherwise here, just building on the fact that a closed SPAC is not more guaranteed to be a stable business any more than a private business).