The rise and fall of SPACs, or Special Purpose Acquisition Companies, is a trending topic in legal and financial conversations. Why were they so attractive, and what caused some to come grinding to a halt? Today we talk about what the heck happened to SPACs! Here with us on the Bite Sized Business Law Podcast is Maria Charon. She is a corporate lawyer who started her career at renowned Wall Street law firm, Sullivan & Cromwell. Most recently, Maria has been part of a SPAC management group. Maria talks us through what a SPAC is, why they’re seemingly attractive, and what a de-SPAC merger is. She shares specifics on how SPACs function, what investors can expect, and we speculate on the effects of pending regulations from the SEC. We discuss the similarities of the SPAC trend with other past trends like the dot-com bubble and the crypto-craze and the future of the SPAC market. For all this, and more, don’t miss this informative conversation with Maria Charon.
Key Points From This Episode:
- A quick introduction to our guest, Maria Charon.
- A definition for ‘SPAC’ which can also be referred to as a Blank Check Company.
- Maria explains why SPACs were so attractive when they first “came on the scene.”
- What a de-SPAC merger is.
- How to gain enough information to discern whether to invest or not.
- How SPAC investors can redeem their investments.
- Why SPACs came to a grinding halt.
- How the threat of regulation affected the SPAC market.
- What happens to failed SPACs.
- Maria explains more about SPAC sponsors and their roles.
- We compare the SPAC trend with other past trends (dot-com bubble and crypto-craze).
- How a good economy engenders a highly speculative instrument like a SPAC.
- The future of SPACs.
- Comparing SPACs to the IPO model.
- The nature of SPACs and the relationship between sponsor groups and retail investors.
- Why SPACs were attractive to non-accredited investors.
- What the next hot asset class could be, according to Maria.
Links Mentioned in Today’s Episode: