SPACs: post-merger survival

Vulanović, Miloš

doi:10.1108/mf-09-2016-0263

Cited by 22 publications

(7 citation statements)

References 33 publications

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“…Gahng et al (2023) suggest that this SPAC IPO investment with its risk-reward characteristics is analogous to investing in risk-free convertible bonds with additional warrants. Finally, analyzing post-merger SPAC survival data, Vulanovic (2017) documents a failure rate of 58.09%, which is higher than that reported in IPO studies.…”

Section: Mf 501mentioning

confidence: 67%

Performance of ESG SPACs

Datar,

Emm,

Han

2023

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PurposeThe authors examine one special focus of Special Purpose Acquisition Companies (SPACs), namely environmental, social and governance (ESG) related investments. The authors document the performance of SPACs with and without ESG focus.Design/methodology/approachThe authors collect data, from several sources, on 1,737 SPAC IPOs formed between 2003 and 2022. A SPAC's focus on ESG is classified based on declared focus in Securities and Exchange Commission (SEC) filings and in post-merger annual reports. The authors examine operational and financial performance of SPACs with and without ESG focus.FindingsIn the study's sample, only 50% of SPACs that announced an intention to acquire an ESG target ended up consummating a merger with an ESG private firm. ESG SPACs exhibit worse operating performance than non-ESG SPACs. Furthermore, they experience 11.6% lower 1-year post-merger excess returns than their non-ESG counterparts.Originality/valueThe study provides an examination of ESG firms that came to market via mergers with SPACs, which is an alternative method to traditional initial public offerings (IPOs). The study also provides a comparison of both operational and stock performance of ESG and non-ESG SPACs.

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Section: Mf 501mentioning

confidence: 67%

Performance of ESG SPACs

Datar,

Emm,

Han

2023

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“…Academic literature supports H1 0 , Vulanovic (2017) shows how SPACs focused on foreign companies exhibit increased failure likelihood, through the usage of a logistic regression model, the same that is used in this paper. This is fairly predictable: indeed, a cross-border deal brings additional burdens in terms of financial regulation, due diligence, and legal agreements.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 72%

Do Chinese-focused U.S. listed SPACs perform better than others do?

Gigante

Guidotti

2021

Investment Management and Financial Innovations

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The extraordinary growth of China from the early 2000s until now made it one of the biggest economies in the world. Over the years, more and more Chinese companies merged with the U.S. listed special purpose acquisition companies (“SPACs”) to become public and attract foreign capital. This paper examines the differences between this specific subsample of SPACs focused on completing a merger with a business located in China among those listed on the U.S. Stock Exchanges and the other U.S. listed SPACs. The intent is to verify whether the sample differs from the rest of the market in their main characteristics, have better, equal, or worse prospects of completing a merger, and offer better, equal, or worse returns to investors. 329 SPACs were identified, of which 41 targeting Chinese businesses. Logistic regression is performed to understand whether the China market focus influences the chances of consuming a business combination. Moreover, two different models (event study approach and buy-and-hold approach) are implemented to assess the share performances of the two subsamples. The conclusions that stem from the obtained results are that China-focused SPACs differ consistently from the rest of the market in certain features but need similar time to identify a target and close the deal. Focusing on China seems to be beneficial for the SPAC’s prospects of closing a deal, being statistically significant at a 10% level. Last, a portfolio composed of the sample SPACs’ shares overperforms the non-China one in both the short and long terms. Acknowledgment The authors would like to thank their brilliant student, Mr. Daniele Notarnicola, for the precious support given during the review of the paper.

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“…Encontrando tendencias en SPAC's que fracasaron por los siguientes tres conceptos: Financiamiento bancario, la fusión con empresas extranjeras, el pago de comisión por encontrar la compañía con la que se realizará la fusión. (Vulanovic, 2017).…”

Section: Revisión De Literaturaunclassified