> Are they any riskier than IPOs (which can and do trade lower than first-day valuation)? I don't think so
There are significant regulatory and disclosure differences that make it easier to be shady with a SPAC. If WeWork had gone with a SPAC there’s probably a lot of stuff they wouldn’t have needed to share
If the aim is to open trading directly to retail, a direct listing (like Coinbase) is all you need.
Re:There’s Nothing to Do Except Gamble
by paulpauper on Thursday April 15, 2021 @03:53PM
(#26825366)
except that the # of companies acquired this way is very limited
Before SPACs, retail couldn't get into IPOs at anything lower than $40/share...and even that was _after_ missing the initial pop that happens once the ticker starts trading.
Now that retail can get into (support) exciting companies at a MUCH lower floor ($10 for commons, $2.50 for warrants), "SPAC bad" hit pieces are a dime a dozen and some brokers (Merrill Lynch, for example) won't allow retail to trade them unless they have $n million in net worth.
Are SPACs riskier? Of course they are. Are they any riskier than IPOs (which can and do trade lower than first-day valuation)? I don't think so. Retail finally has a shot at the same pathways for wealth than IBs and others have had since forever...and we can't have that.