Understanding SPACs: A study of stakeholder characteristics in the US SPAC market

Sammanfattning: The number of Special Purpose Acquisition Companies ("SPACs") have surged in the recent year, despite previous research documenting the historical underperformance of SPACs, both compared to the market and traditional initial public offerings ("IPOs"). The purpose of this thesis is to contribute to an increased understanding of the US SPAC market and to further investigate stakeholder characteristics that in turn could point us towards an understanding of the SPAC market's general nature and development over time. I apply a data driven approach and investigate the SPAC market characteristics from the three different perspectives: founders, targets, and investors. I collect and analyze an extensive dataset, covering the years 2003 to 2020, including 636 SPAC IPOs. From the result of my analysis, I have four main findings that can conclude the thesis. First, private equity ("PE") and venture capital ("VC") sponsorship have increased over time, with VC sponsoring showing a notable increase in recent years. Second, it is common that SPACs are part of a series of several SPACs, where SPACs part of a series exhibit lower liquidation rates and higher post-merger index adjusted returns. Third, I find that PE and VC owned targets have increased over time which indicates that PE and VC firms use SPACs as an exit vehicle for their portfolio firms. Finally, there seems to be one type of investor at the IPO and another type of investor after the merger.