"Every facet of SPACs is bespoke" ... how would SPACs be compared against each other as an asset class if underlying details are so varied. What metrics or financial ratios should investors be using?
I think that in picture 6. the 2.5% Equity (fees) to sponsor should be 2.0%. If the sponsor fees are 20% of the $200MM SPAC then that is $40MM or 2.0% of the $2Bn company. The 2.5% comes from $40MM / $1.6Bn (pre PIPE) but the pipe will dilute that to 2.0% right?
Hi John, excellent summary. The only thing I might add is how the whole SPAC process/deal looks from the retail/institutional asset managers' point of view. Some eye-opening insights here: https://corpgov.law.harvard.edu/2020/11/19/a-sober-look-at-spacs/ What are your thoughts? It seems like we are starting to see more investor-friendly SPAC structures (Ackman and, to some degree Khosla). Cheers! Anton
I really hope that the NASDAQ works with SPAC sponsors and acquired companies to participate in the bell ring ceremony haha... seems like a small thing, but like you mentioned, the strange yet steep cultural premium of an IPO is all fugazi
Great write-up here, John
"Every facet of SPACs is bespoke" ... how would SPACs be compared against each other as an asset class if underlying details are so varied. What metrics or financial ratios should investors be using?
I think that in picture 6. the 2.5% Equity (fees) to sponsor should be 2.0%. If the sponsor fees are 20% of the $200MM SPAC then that is $40MM or 2.0% of the $2Bn company. The 2.5% comes from $40MM / $1.6Bn (pre PIPE) but the pipe will dilute that to 2.0% right?
I was wondering if anyone had any thoughts on the pre-merger dilution costs of shares as a result of redemptions?
Hi John, excellent summary. The only thing I might add is how the whole SPAC process/deal looks from the retail/institutional asset managers' point of view. Some eye-opening insights here: https://corpgov.law.harvard.edu/2020/11/19/a-sober-look-at-spacs/ What are your thoughts? It seems like we are starting to see more investor-friendly SPAC structures (Ackman and, to some degree Khosla). Cheers! Anton
Excellent writeup, thank you.
I really hope that the NASDAQ works with SPAC sponsors and acquired companies to participate in the bell ring ceremony haha... seems like a small thing, but like you mentioned, the strange yet steep cultural premium of an IPO is all fugazi
also, like always, super well written and detailed