> But over time, as the market stopped rising, SPACs became better understood, and a glut of SPACs pursued a smaller universe of good deals, these things became

> But over time, as the market stopped rising, SPACs became better understood, and a glut of SPACs pursued a smaller universe of good deals, these things became real problems. The deep problem with a SPAC is that the SPAC’s sponsor takes out 20% of the value of the money that she raises, and the warrantholders get a cut too, and somebody needs to pay them that cut. Either the target company pays it (by giving up more of the company for the SPAC proceeds), or the public SPAC shareholders pay it (by getting shares worth $7 for their $10 investment). Somebody is getting a bad deal. A good run-down of how Chamath and others directly profited from retail investor enthusiasm. Financial markets have quite the aptitude for creating new forms of pump-and-dump schemes.