What? At least as described above, the material requirements for disclosures changes. Is the description above wrong or do you not find disclosures to public market investors to be material?

I don't think they're material. The IPO prospectus for companies is a sales pitch with a bunch of legal "we may never make money" comments. If you commit fraud you'll wind up in court, disclosures or otherwise. Oh and nobody reads any of these documents, let alone any quarterly numbers.

I think SPACs are certainly a more risky way to put your money to work, but they're fine.

Companies that don't make money, have never made money, and to my eyes have absolutely no path to profitability IPO too - the banks just like to collect fees to get you to the public market. Does it really matter if they do it through an SPAC? I don't think it does.

I disagree in the importance of an S-1 disclosure. Detailing the actual business plan of the company, as to what people think the plan is, was invaluable for WeWork. Uber's quarterly earnings are a continual source of entertainment. I personally wouldn't put any money into a public company before an actual SEC-required statement, and an SPAC bypasses the first.

I think it depends on what we're talking about, right? My suggestion is that largely nobody cares or looks at these disclosures, not that they aren't important. I think institutional investors probably do, but they're certainly willing to invest in SPACs as well, it's not like it's only retail investors who buy shares of SPACs.

Your point about the business plan is interesting... it depends on the perceptions that investors have that the company can achieve a business plan, but it's not necessarily accurate right? Uber was going to do all this autonomous taxi stuff, and had it outlined in their business plan. WeWork was punished for having a crappy business plan before it filed, Uber has a crappy one (or at least one that turned out to be crappy in my opinion) and went public anyway. The disclosures certainly didn't help much - they aren't a guarantee. Things like Adam Neumann leasing his own properties to WeWork came out before any of these disclosures. If WeWork went the SPAC route (and it actually looks like it will at a $10bn or so valuation), it's not like you really hide all that stuff any more than you hide it in the normal IPO process.

If you don't like that Social Capital Hedosophia is taking SoFi public via IPOE SPAC, you can dump your shares. It's not like you have to hold the shares. It's a speculative position to take. Hell, at least you can actually dump the shares before the listing even happens - for IPOs there can be lockup periods where you wind up losing money because the IPO was way overpriced. Banks get their fees either way (which is fine).

So in other words, a SPAC is “a company for carrying out an undertaking of great advantage, but nobody to know what it is”?

https://en.m.wikipedia.org/wiki/South_Sea_Company#Top_reache...

It was apocryphal during that bubble; it’s real now. I do not find that to be a good thing...

Once the SPAC has identified a company to buy, investors in the SPAC get a choice to either stay invested or get their money back with interest. So it's only a blank check initially, but not once it matters. Source: https://www.bloomberg.com/opinion/articles/2021-01-08/spac-m...

My understanding was that SPAC shares came with a warrant that could be exercised for shares in the acquisition target, rather than transmuted directly into shares. After the management fee, market premium and exercise cost are you really coming out ahead? Am I misunderstanding the mechanics?

No, you're not coming out ahead. You're roughly paying a 20% cost of capital. In today's frothy markets, you might make up for that in the public markets, but it does seem that mostly second tier companies are going public through SPACs.

Depends on the SPAC and the target company.

>alternative listing method

I know porn when I see it, and this is a flashing neon sign that reads "get in on our definitely not fraudulent spacs here to absolutely not lose money to the institutional investors juicing a most assuredly not failing business"

The company I work at, which shall remain nameless, is going through or went through this SPAC process, and we're assuredly growing and have good fundamentals, so it's not _just_ a parlor trick for Wall Street, but _some_ of them probably are.