Six things people believe about SPACs that are not true

"A liquidation means investors lost money"

Public shareholders get their pro-rata share of the trust back, with whatever interest accrued. The party that loses is the sponsor, whose founder shares become worthless and whose at-risk capital is gone. A wind-up is the structure working as designed, and treating it as a scandal misreads what was promised.

"SPACs are a way to dodge SEC scrutiny"

A SPAC is a registered public company from its IPO onwards, filing quarterly and annually like any other. The merger itself requires a registration statement that the SEC reviews and comments on, frequently at length. The disclosure advantage that did exist, around forward-looking projections, was narrowed by the 2024 rules.

"$10 is a floor on the share price"

Trust value is a floor on what a redeeming holder receives, before a deal closes. It is not a floor on the share price, it does not apply to warrants, and it stops applying entirely the moment a combination completes. Plenty of de-SPACs have traded at a fraction of $10 while the arithmetic worked exactly as documented.

"A famous sponsor means a good deal"

The 2020 to 2021 cohort included some of the best-known names in finance and sport, and the completion records of those vehicles are not obviously better than anyone else's. A recognisable sponsor helps raise the money. It does not change the incentive that arrives when the clock runs down.

"Redeeming is a vote against the deal"

They are separate. A holder may vote in favour and still redeem, and many do precisely that: arbitrage capital has no objection to the deal, it simply wants its cash back. This is why deals routinely pass a vote overwhelmingly and still lose 90% of their trust.

"SPACs are dead"

Issuance is far below the peak and the structure has changed, but new vehicles continue to price every month, and the ones doing so now carry overfunded trusts, tighter deadlines and committed financing. What died was the version that could raise a billion dollars on a name and a slide deck.