The SPAC Revolution: IPO Disruptor or Blank Check Distortion?

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2021-06-09に共有

Special Purpose Acquisition Companies (SPACs) have taken the market by storm in 2020 and 2021, accounting for more than half of all IPO proceeds raised in US equity markets during the period. In this session, I start with a look at blank check companies, their predecessors in the 1980s, and how SEC restrictions on those companies gave rise to the current SPAC structure. I compare SPACs to banker-led IPOs and direct listing, assessing the pluses and minuses, and argue that there rise can be attributed to four factors: low interest rates, a booming stock market that has become a pricing game, and celebrity-centered investing. Finally, I look at the question of the winners and losers from SPACs, by looking at the research on existing SPACS, with sponsors as the only clear winners. I argue that rather than inveigh against SPACs, we should be pushing for changes in their structure, with reductions on sponsor subsidy and better alignment of sponsor and investor interests at the top of the list.
Blog Post: aswathdamodaran.blogspot.com/2021/06/the-rise-of-s…
Research papers:
1. A Sober Look at SPACs, 2020, Klaussner, Ohrlrogge and Ryan: papers.ssrn.com/sol3/papers.cfm?abstract_id=372091…
2. SPACs, 2021, Gahng, Ritter and Zhang: papers.ssrn.com/sol3/papers.cfm?abstract_id=377584…

コメント (21)

@camiloafanador5090 3年前

This is just like a top notch MBA class but for free! I'm so happy prof Damodaran is sharing this knowledge with the entire world. Game Changer!
@kikolatulipe 3年前

Sponsor get 20% ! This is huge ! So Chamath completed 4 SPAC , in health, space, real estate and fintech-banking ! 4 x 20 % … awesome fees charged to investors ! Thank you professor for this excellent video !
@lmomi5363 3年前

i think the fact that your videos have 20k views while crypto and traders have millions is the tangible proof of markets' inefficiency. thank you for all you do to educate us
@abc18792 3年前

I don't understand why you give us all kind of useful tool as videos, your web, etc. But I really appreciate your effort and your kindness for sharing all your knowledge with us. There's no word to describe my gratitude with you and your team Damodaran!
@marsto7513 3年前

Thank you for making this content free! Incredible educator
@adityagrover904 3年前

Thanks for sharing a new video!
@zakariaalami818 3年前

Thank you for this instructive video with historic, current and market dynamic !
@forza-marco 3年前

Thank you for sharing. Wonderful video to clearly explain SPACs and their use as a tool to obtain capital. Buyer beware!
@nutsackwilliams8527 3年前

I never watch hour long YouTube videos but I watched your google lecture.
@marcosazeredo4839 3年前

I recently tried to understand the spac process and economics. I read a lot of articles but it is hard to find good resources. Thank you for your contributions. As you say in the video, spac companies have big stories, they should follow late-stage VC-like returns and therefore, it makes sense to be on average negative, since their returns are often highly skewed. I believe Spacs should be paied like VC, fees for returns generated after the acquisition.
@bear2bull848 3年前

Thanks for this video, some very interesting stats that i was not aware of. Thumbs Up.
@Billyjackson117 3年前

You’re an amazing teacher!🙏🏻
@mikeloubardeas2912 3年前

Excellent summary! A couple additional benefit of a SPAC not mentioned are 1) members of the sponsor team will often take a seat on the board of the target company, the dragons den effect. 2) SPACs can do deals where they combine multiple target conpanies, for certain situations where a company wants to do a capital raise and complete an acquisition or merger.
@ahmedalshadooki6592 3年前

Thanks much Professor for an excellent video. I'd like to see a success rate comparison for going direct listing vs IPO vs SPAC especially post first year listed in relation to the stocks value.
@barbiejie 3年前

Thank you, Aswath, for your insights into SPACs.
@abhishek1917 3年前

Thanks for the insights professor
@MrWalo1990 2年前

Finally understood the SPAC phenomenon
@offwallstreet6386 3年前

another great video!
@heltonoliveira9426 3年前

Thanks for sharing!
@dorianbural 3年前

Very informative Doc. I learned a lot. The roadshow aspect of the investment bankers, as well as the favorable evaluation, sounds parallel to the pie in the sky storytelling and promote fees the sponsors are benefiting from. I've got my eye on a dozen or so SPACs, as well as money in a couple of them. I weighed heavily on the sponsors steering the ship so I obviously went with the sock puppet guy. But first I put faith in a Baker scholar. I studied the warrant structure and believe I waited till a favorable window to get those. The warrants, I think you should have had a few more minutes discussing them. They may be the most retail friendly for those in it for the long haul. Around the twenty-nine minute mark I sense you are disappointed in the traditional listing style. I guess by your history lesson we are on our third generation of SPACs. Hopefully this disruption from Bill will evolve it to the perfect retail friendly medium/long term investment vehicle. Great video