@article{Saul_2022, title={THE RISING POPULARITY OF SPECIAL PURPOSE ACQUISITION COMPANIES: HIDDEN DANGERS, REGULATORY CHANGES, AND A LOOMING BUBBLE}, url={https://www.gbis.ch/index.php/gbis/article/view/143}, abstractNote={<p>Special-purpose acquisition companies, or SPACs, have existed in various<br>structures for decades. SPACs, often referred to as blank-check companies, are an<br>unconventional investment to make a company public. Instead of the traditional IPO<br>route, the SPAC is a shell structure that raises capital by buying or merging with an<br>existing company in under two years. SPAC investments soared to new records during<br>the COVID-19 pandemic in 2020 and 2021. This research analyzes the hidden dangers<br>specific to retail investors and the actions regulators may take to protect the retail<br>investor given that SPACs are likely the next bubble to burst. The research uses<br>quantitative SPAC data on post-merger returns, SPAC index, deal size, and bookrunner<br>count. The research also consults two openly available surveys examining retail investor<br>knowledge of SPACs.<br>This research suggests that regulators and SPAC sponsors endorse more stringent<br>disclosure and reporting requirements around costs, fees, and sponsor incentives. This<br>research concludes by suggesting that if SPAC transactions come to a pause or return to<br>normal levels, there could be retail investors holding losses and, like all bubbles, the<br>SPAC bubble could burst.</p>}, journal={Global journal of Business and Integral Security}, author={Saul, Patrick J.}, year={2022}, month={Dec.} }