Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

SPACs collapse as $11B of deals are called off within an hour

bloomberg.com

Post reply on HN
Print view View original

31–40 of 119 posts

Re: SPACs collapse as $11B of deals are called off within an hour

#31

Post by yreg »

robotresearcher wrote: post #25
taywrobel wrote: post #21

Earlier quoted context omitted.

Not sure why you’re getting downvoted, this is a primarily tech forum and a SPAC is a primarily business concept. It means a “special purpose acquistion company”. It’s effectively a company set up for the express purpose of facilitating an acquistion or merger of companies, so that assets or IP ownership can be moved in an optimally tax or otherwise cost efficient way. Many have argued they provide no value except fo…

> Not sure why you’re getting downvoted, Likely because you'll get the answer from first Google hit quicker than typing the question in English. Edit: I don’t object to the question. Just stating my guess as to why the downvotes occurred.

Yet it is probably useful for many to have it here. We will see by the votes.

Re: SPACs collapse as $11B of deals are called off within an hour

#32

Post by stygiansonic »

skybrian wrote: post #27

Due to how SPACs work, investors will be getting most of their money back. Typically they IPO at $10. The money gets returned if no deal is made. > Concord’s sponsors will throw in the towel and return roughly $10.17 a share to investors, the SPAC said in a subsequent filing. The stock closed at a high of $13 in November 2021 and garnered attention from Wood’s Ark Investment, which is among the SPAC’s biggest investo…

Do they all IPO at $10 price and if so why?

Re: SPACs collapse as $11B of deals are called off within an hour

#33

Post by kapildev »

robotresearcher wrote: post #25
taywrobel wrote: post #21

Earlier quoted context omitted.

Not sure why you’re getting downvoted, this is a primarily tech forum and a SPAC is a primarily business concept. It means a “special purpose acquistion company”. It’s effectively a company set up for the express purpose of facilitating an acquistion or merger of companies, so that assets or IP ownership can be moved in an optimally tax or otherwise cost efficient way. Many have argued they provide no value except fo…

> Not sure why you’re getting downvoted, Likely because you'll get the answer from first Google hit quicker than typing the question in English. Edit: I don’t object to the question. Just stating my guess as to why the downvotes occurred.

But once one questions and another answers, the answer would be available right here on Hackernews. Hundreds of people would save time + comprehend better because the answers here would explain in a compact and comprehensive manner and that too from the perspective of a tech-savvy person.

Re: SPACs collapse as $11B of deals are called off within an hour

#34

Post by pclmulqdq »

stygiansonic wrote: post #32
skybrian wrote: post #27

Due to how SPACs work, investors will be getting most of their money back. Typically they IPO at $10. The money gets returned if no deal is made. > Concord’s sponsors will throw in the towel and return roughly $10.17 a share to investors, the SPAC said in a subsequent filing. The stock closed at a high of $13 in November 2021 and garnered attention from Wood’s Ark Investment, which is among the SPAC’s biggest investo…

Do they all IPO at $10 price and if so why?

That's standard. I don't exactly know why except that it's a convenient price for retail investors and it lets them re-use their old contracts. The pool of money that they collect at IPO varies a lot, though.

Re: SPACs collapse as $11B of deals are called off within an hour

#35

Post by rodgerd »

highwaylights wrote: post #28
taywrobel wrote: post #21

Earlier quoted context omitted.

Not sure why you’re getting downvoted, this is a primarily tech forum and a SPAC is a primarily business concept. It means a “special purpose acquistion company”. It’s effectively a company set up for the express purpose of facilitating an acquistion or merger of companies, so that assets or IP ownership can be moved in an optimally tax or otherwise cost efficient way. Many have argued they provide no value except fo…

The other big reason they’ve become so popular lately is that they allow private companies to go public without an IPO (thus avoiding a lot of the disclosures that would otherwise be required). Public SPAC created with no business -> raises funding from investors (or marks) -> “acquires” private company -> SPAC renames to private company’s name -> private company is now public without IPO

Yeah, this is the key context: people have argued that they're essentially a way of capturing all the value of a "going public" event to a smaller audience than a traditional IPO.

Re: SPACs collapse as $11B of deals are called off within an hour

#36

Post by jfengel »

fastball wrote: post #30
ElijahLynn wrote: post #11

What is a SPAC?

A SPAC, or Special Purpose Acquisition Company, is a type of investment vehicle that is formed for the purpose of acquiring or merging with another company. SPACs are often used as an alternative to the traditional initial public offering (IPO) process, as they provide a faster and more efficient way for a private company to become publicly traded. SPACs are typically created by a group of investors, who raise money…

Presumably the SPAC itself must go through some IPO-like process in order to get listed. If it doesn't get listed then its shares aren't liquid.

I take it that they are subject to little scrutiny since it's just "we're a company with no business but a ton of capital", and the exchange and SEC say "sounds legit to me". Then they can "take over" the target, again with little scrutiny.

Have I got that right?

Re: SPACs collapse as $11B of deals are called off within an hour

#37

Post by EGreg »

kapildev wrote: post #33
robotresearcher wrote: post #25

Earlier quoted context omitted.

> Not sure why you’re getting downvoted, Likely because you'll get the answer from first Google hit quicker than typing the question in English. Edit: I don’t object to the question. Just stating my guess as to why the downvotes occurred.

But once one questions and another answers, the answer would be available right here on Hackernews. Hundreds of people would save time + comprehend better because the answers here would explain in a compact and comprehensive manner and that too from the perspective of a tech-savvy person.

It’s sad that you’re being downvoted for saying that

Re: SPACs collapse as $11B of deals are called off within an hour

#38

Post by Kon-Peki »

I'm crossing my fingers!

We get a daily file from a vendor containing corporate action data, because somebody "needs" it for some report or something, and so we dutifully ingest it into our system.

But every 2 or 3 months, a specific planned SPAC merger shows up in that file. Something to do with gambling and crypto/blockchain, based in the Med. Every single time it shows up, it causes the vendor file to fail the vendor's own validation rules and so I have to go look at the log, confirm that it is this same merger, confirm that the person that cares about this file doesn't care about this record, delete it, and then let the process allow the rest of the data to flow out of the staging table.

I hope this is one of them :)

Re: SPACs collapse as $11B of deals are called off within an hour

#39

Post by fastball »

jfengel wrote: post #36
fastball wrote: post #30

Earlier quoted context omitted.

A SPAC, or Special Purpose Acquisition Company, is a type of investment vehicle that is formed for the purpose of acquiring or merging with another company. SPACs are often used as an alternative to the traditional initial public offering (IPO) process, as they provide a faster and more efficient way for a private company to become publicly traded. SPACs are typically created by a group of investors, who raise money…

Presumably the SPAC itself must go through some IPO-like process in order to get listed. If it doesn't get listed then its shares aren't liquid. I take it that they are subject to little scrutiny since it's just "we're a company with no business but a ton of capital", and the exchange and SEC say "sounds legit to me". Then they can "take over" the target, again with little scrutiny. Have I got that right?

I mentioned that they IPO in the second paragraph.

And yep, that's about right. Detractors claim it avoids filing regulations and that is bad while proponents say that it justifiably avoids direct listing which can be prohibitively time-consuming / expensive.

Re: SPACs collapse as $11B of deals are called off within an hour

#40

Post by EGreg »

JumpCrisscross wrote: post #29
yieldcrv wrote: post #22

Earlier quoted context omitted.

In this case it is just a redemption of money There are some investors that bought SPAC shares and warrants at a premium, who are now at a loss, but primary issuance investors are just made whole.

> it is just a redemption of money Plenty of secondary buyers lost money. To say nothing of everyone who owns Circle.

Wait which Circle?

I remember a decade ago Circle being a startup where VCs all invested like $30M in an early round and a month later the entire startup went bankrupt.

That Circle?

Post reply on HN