SPACs and the regulation gap: The effect of first SEC intervention on share and warrant returns

Evrim Akdoğu, Serif Aziz Simsir and Merve Meriç Yılmaz

Finance Research Letters, 2022, vol. 50, issue C

Abstract: We examine the effect of first official SEC announcement regarding Special Purpose Acquisition Companies (SPACs), which is an alternative mechanism of taking firms public and suggested to enjoy a regulation gap compared to its counterparts. If so, a big adverse effect may be expected at the time of the first regulatory intervention. Our results do not show support for this hypothesis; however, we find that some SPAC characteristics lead to significantly worse returns in a multivariate setting. Interestingly, despite the regulation targeting warrant accounting directly, we find that offering warrants in SPAC units have a positive impact on announcement returns.

Keywords: Special Purpose Acquisition Company (SPAC); IPOs; Regulation; Securities Exchange Commission; Event study; New technology (search for similar items in EconPapers)
JEL-codes: G24 G30 G34 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:50:y:2022:i:c:s1544612322004950

DOI: 10.1016/j.frl.2022.103316

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