Questions tagged [spac]
13 questions
4
votes
1 answer
Why is money for SPAC raised even before they have found a potential company to merge with?
From what I have understood, A SPAC shell co. is setup and raises funds through an ipo thereby getting a period of 2 years to find a company they can merge with.
Is there a specific reason that it works this way?
The capital sits in the shell…
Arya Lisa
- 43
- 3
2
votes
3 answers
If total assets less total liabilities is positive, how should negative shareholders' equity be interpreted?
For some recently public companies, total assets minus total liabilities is a positive number, but shareholders' equity is negative. In some cases, this appears to be the result of a past sale of preferred shares. Credo (NASDAQ: CRDO) offers one…
SapereAude
- 131
- 3
2
votes
1 answer
Are there any SPAC stocks that have been in the stock market for more than two years and is still a SPAC?
I read that the timeline for a SPAC company is 24 months. If it didn't complete an acquisition, it will be dissolved. So, if I see a random stock chart and found that it has a value (was listed) for more than two years, does this mean it is…
huab
- 947
- 6
- 14
2
votes
1 answer
Determining cost basis in a SPAC unit split into stock and warrants
I bought 400 shares of IPOB.U at $11.84/unit. Each unit can be split into 1 share + 1/3 warrant when the holder desires (after the stock and warrants start trading freely, but not before.)
I called my broker a few months later to split the units…
spac splitter
- 21
- 1
- 2
1
vote
1 answer
Why is it common to selloff SPAC shares just before merger?
There is a company I am familiar with that is the target of an SPAC. I'm unfamiliar with investing in SPACs, but what I have learned is that more often than not, the price of the ticker drops after the merger is complete. While there are a variety…
pstatix
- 363
- 3
- 10
1
vote
1 answer
Why do SPACs issue units instead of shares and warrants only?
From my understanding, SPAC units are sold during SPAC IPOs. Later, these units can be converted into shares and warrants. What I don't understand is: why is it necessary to issue units in the first place? Why not issue shares and warrants only? The…
Flux
- 17,301
- 12
- 74
- 138
1
vote
0 answers
SPAC: FTCV -> eToro: What may become of my FTCV shares post merger?
After yesterday's announcement that eToro and FTCV are planning on merging, FTCV shares became available to eToro users. Target for the merger of the SPAC and eToro will be Q3 2021.
Opening a position in FTCV now, what will happen to the shares post…
dev_does_software
- 111
- 3
1
vote
2 answers
Why would you buy a warrant if the stock is over the strike price?
I am researching Spacs and am curious why you might buy a warrant if the spac stock price is over the usual 11.50 strike price? I understand the use case in options because you could place a put on a lower price but aren’t all spac warrants set at a…
frankie
- 693
- 1
- 6
- 7
0
votes
1 answer
How do early-stage share prices of companies going public via SPAC change?
I currently have a number of series C, non-voting shares (< 1000) in a company that would go public via SPAC on this Monday. Since the price of each unit of SPAC is always price at $10 per unit for the post-money valuation of $4-5B, I wonder how…
user177196
- 103
- 4
0
votes
3 answers
How do SPAC targets (acquired companies) benefit from additional cash upon merging with a SPAC?
Hope this is the right place for the question.
There are many articles on SPACs explaining how things work, so I'll cut straight to the question: I have read and heard people say that a SPAC deal can be good for the target, ie the acquired company,…
Jean Monet
- 101
0
votes
1 answer
Why do SPAC units typically start trading at 10 USD?
I read on https://www.kiplinger.com/investing/stocks/601168/spacs-to-buy:
Generally, the SPAC (Special-purpose acquisition company) will offer at $10 per "unit." Each unit includes one share of common stock and one-fourth of one warrant, which…
Franck Dernoncourt
- 11,883
- 13
- 60
- 147
0
votes
1 answer
Why do SPAC warrants only become exercisable 30 days after the de-SPAC transaction?
I noticed that most (all?) SPAC warrants only become exercisable on the later of: (a) 12 months after the SPAC's IPO date, (b) 30 days after the de-SPAC transaction. I am surprised by this uniformity across many SPACs. What could be the reason(s)…
Flux
- 17,301
- 12
- 74
- 138
-1
votes
1 answer
Minimum hold period for initial investors in IPO
Back in 2020 I had some stocks that used to be SPACs and watched their value plummet over a span of a few days as the initial investors were allowed to sell, because their initial required holding period had expired. I can't remember if the…
Ian
- 223
- 1
- 6