Prof Claudia Z on SPACS- 102 | Claudia Zeisberger

This is the second part of my deep-dive into SPACs.
Part 1 - is here • Prof Claudia Z on SPAC...
We analyzed the performance of SPACs post-merger completion, by grouping them by the merger date:
- Q2 2020 (7 SPAC mergers)
- Q4 2020 (41 SPAC mergers)
- Q2 2021 (14 SPAC mergers)
- Q4 2021 (31 SPAC mergers)
Given the large number of SPACs which remain on the road, looking for suitable acquisition targets, it is worthwhile keeping an eye on their post-merger performance.
On the developments in SPAC regulation, you will find below a link to a thoughtful summary:
bit.ly/3vot3mW
Additional resources:
- Axios writes regularly about SPACs bit.ly/3xLvyBn
- Here an example of Mondee's SPAC led by Elliot INvestment here: reut.rs/3xWOnBo
and here: bit.ly/3xLVbBR
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[@bpodg]

Thank you for sharing Claudia, as always sweet and short content to get an understanding of the SPAC dynamic that has had its highs and lows in the past, here a clear sign that the model is hitting a wall or catching its breath until we return to calmer waters...end of the war, energy crisis, supply chain friction...

[@claudiazeisberger]

Or ... an opportunity to build an interesting portfolio of 'startups' with public market liquidity... I wonder.

[@fans-circle4541]

Well, don't think that you can paint all the de-spacs with the same brush. Most of the beating down is because of excessive scrutiny by the regulators and some loose comments. Agree that with the liquidity slush in 2020, a lot of low quality spacs made their way into the market but as you said the targets or now choosing which spacs to merge with, and that should have corrected the Spac market, on its own. The regulators are just over scrutanizing and this may kill the Spacs as an instrument altogether. We should remember that they have allowed so many private companies to access public capital to fuel capex, jobs, and innovation.

[@claudiazeisberger]

Thanks for your comment - and yep - not all trade below $10 - but >70% do. AFter analyzing >350 of them thats significant. On the regulatory side - indeed the regulators are (as so often) late to the game; so I would argue that some earlier scrutiny/ intervention would have prevented the fallout. I wil continue to observe the market; let's hope i am right and the targets & SPAC sponsors are getting 'smarter'. SPACs have survived other financial market shocks in the past and i am sure they wil continue to be around. Hopefully retail investors will be wiser about their potential downside as well. Re your comment of allowing companies to go public - hmmm ... I wonder how much long-term value there is for the company when the share price can not make it back to merger-price. But that applies to underperforming IPOs as well.

[@fans-circle4541]

@@claudiazeisberger Thanks for replying Claudia. Looking at the stock price of de-spacs now and trying to comment on them seems unjust and I would term it as short-termism. I mean you will have to do a stock price analysis of BFSI and Housing sector companies that went public in 2006-7 boom and see how many of them traded below the listing price in 2008, to draw a comparable. The SPACs have allowed so many EV, green energy, and space tech companies to access public capital and fund their R&D and Capex requirements, and that has been possible because of some high quality sponsors that have incubated these companies in to public markets. The emerging tech space requires new ways of companies to access public capital, otherwise we will have Teslas and Amazons dominate all tech sectors and ultimately kill innovation. You will have to wait 5 years to see the real winners from this Spac boom. As for the retail investors - check out what happened to Netflix investors. They are never safe.