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dc.contributor.authorSpamann, Holger
dc.contributor.authorGuo, Hao
dc.date.accessioned2022-11-10T19:39:28Z
dc.date.available2022-11-10T19:39:28Z
dc.date.issued2021
dc.identifier.urihttp://hdl.handle.net/20.500.13051/18220
dc.descriptionVolume 40en_US
dc.description.abstractIndirect investor protection makes investing in most public securities safe even without understanding their terms or the underlying business. Special Purpose Acquisition Companies (SPACs) disable this protection by offering two alternative payoffs from the same security, the SPAC share, in the de-SPAC process: the redemption value, or a share in the post-de-SPAC entity. The former is usually higher and chosen by sophisticated repeat players, while unsophisticated investors elect the latter or receive it by default. Before the de-SPAC process, the SPAC share price reflects the higher payoff, such that unsophisticated investors systematically overpay. This overpayment is captured, directly or indirectly, by SPAC sponsors and IPO investors. This allows the latter to make money from SPACs even if SPACs create negative social value.en_US
dc.titleThe SPAC Trap: How SPACs Disable Indirect Investor Protectionen_US
rioxxterms.versionNAen_US
rioxxterms.typeJournal Article/Reviewen_US
refterms.dateFOA2022-11-10T19:39:29Z


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