The Rise of Fintech and Healthcare SPACs

Victoria Patsika ()
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Victoria Patsika: Cardiff Business School, Cardiff University

A chapter in Essays on Financial Analytics, 2023, pp 265-296 from Springer

Abstract: Abstract This study examines the level acquisition companies (SPACs). The results demonstrate low underpricing for both types of SPAC, with unit and share prices of around $10 from 2010 to 2021. Leverage, market capitalisation, the size measured by total assets, and management teams with finance experience have a statistically significant impact on underpricing. Interestingly, the management team affected the share price (closing price) when the SPACs merged with the target companies on the first trading day. SPACs appear to be an alternative in comparison with IPOs. Furthermore, the relevance of agency theory, information asymmetry theory, signalling theory, and the winner’s curse is confirmed. The results provide practical implications for private target companies and investors that are interested in SPACs.

Keywords: Fintech and healthcare SPACs; Underpricing; Management team (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:lnopch:978-3-031-29050-3_13

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DOI: 10.1007/978-3-031-29050-3_13

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