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Title:A Story on SPACs PDF Logo
Authors:Lakicevic, Milan
Vulanovic, Milos
Issue Date:2012
Abstract:We study characteristics of Specified Purpose Acquisition Companies (SPACs) and examine the performance of their securities over time. We find that SPACs represent a fairly unique way to raise capital. The incentives of their founders, underwriters, and investors are interdependent and successful business combinations generally result in significant returns to founders. We also show that different SPAC securities generate different reactions in response to the announcement news regarding their corporate status. While holders of all three securities realize abnormal returns on the announcement day, the strongest reaction is observed among the investors holding warrants, while common stock holders tend to react very mildly.
Subjects:SPACs
Blank Checks
Venture Capital
IPO's
Warrants
Reverse Mergers
JEL:G32
Document Type:Preprint
Appears in Collections:Working and Discussion Papers / Arbeits- und Diskussionspapiere, EconStor Direct

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