The Risks of High Redeeming Rates

There are plenty of reasonable companies where they trade above the trust value and people want to own them. The problem is you've got a lot of SPACs out there with mediocre sponsors, with misalignments of interest. High redemptions are a function of bad deals. If it's a good deal, nobody redeems because the value of the transaction exceeds the trust account.

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David Sherman talks all about SPACs (special purpose acquisition company), why some companies would prefer to IPO through a SPAC, and much more!

IN THIS EPISODE, YOU’LL LEARN:

00:00 - Intro

01:42 - What SPACs are and how they work.

09:16 - Why some companies would prefer to IPO through a SPAC rather than the traditional IPO process.

15:27 - Why the incentive structure of the SPAC IPO process is sub-optimal.

31:09 - How pre-merger SPACs offer an interest risk/return profile.

53:21 - David’s thoughts on the overall current market environment.

And much, much more!

*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Kyle and the other community members.
Check out CrossingBridge Advisors.
CrossingBridge’s SPAC Videos & Pre-Merger SPAC ETF.
SPACinformer.com.
Related episode: Listen to MI086: SPACs And Electric Vehicles w/ Peter Cuneo And Avinash Rugoobur, or watch the video.
Related episode: Listen to TIP381: High Yield Masterclass w/ David Sherman, or watch the video.

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