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SUMMARY:Why SPACs: An Apologia - Usha Rodrigues (University of Georgia)
DTSTART:20221110T130000Z
DTEND:20221110T140000Z
UID:TALK175178@talks.cam.ac.uk
CONTACT:Daniel Simmons
DESCRIPTION:Special purpose acquisition companies (SPACs) dominated the in
 itial public offering (IPO) market in recent years\, but the Securities an
 d Exchange Commission (SEC) has proposed rules that have chilled the SPAC 
 market and\, if made final\, will likely strangle it completely. It is tim
 e to examine what\, if anything\, SPACs offer the capital markets.\n\nMost
  commentators and regulators view SPACs as a mere regulatory sleight of ha
 nd. This Article focuses on SPACs’ fundamental—but overlooked—innova
 tion. Traditional securities law views average investors as prone to hyste
 ria\, and therefore relegates them to investment in public companies\, res
 erving investment in private firms for the wealthy. The traditional securi
 ties law regime thus has the effect of preventing the general public from 
 investing in private companies until after more wealthy investors have had
  their turn. But SPACs allow the public to trade based on information abou
 t a still-private company. Allowing free trading of this information is a 
 radical departure from the basic structure and original purposes of U.S. s
 ecurities law.\n\nSPACs thus challenge securities law at its core. We use 
 an original empirical dataset to argue that their success—or\, to be pre
 cise\, the success of some of them—is evidence that securities law may b
 e overly paternalistic in its attitude toward the general public. Our data
  provide evidence that\, as long as the SEC implements reforms that realig
 n shareholders’ interests with those of SPAC managers\, SPACs can offer 
 a valuable new opportunity in the markets.\n\nFULL PAPER AT: https://paper
 s.ssrn.com/sol3/papers.cfm?abstract_id=4072834
LOCATION:Zoom only
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