SPACs and the regulation gap: the effect of first SEC intervention on share and warrant returns

Akdoğu, Evrim and Şimşir, Şerif Aziz and Meriç Yılmaz, Merve (2022) SPACs and the regulation gap: the effect of first SEC intervention on share and warrant returns. Finance Research Letters, 50 . ISSN 1544-6123 (Print) 1544-6131 (Online)

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Abstract

We examine the effect of first official SEC announcement regarding Special Purpose Acquisition Companies (SPACs), which is an alternative mechanism of taking firms public and suggested to enjoy a regulation gap compared to its counterparts. If so, a big adverse effect may be expected at the time of the first regulatory intervention. Our results do not show support for this hypothesis; however, we find that some SPAC characteristics lead to significantly worse returns in a multivariate setting. Interestingly, despite the regulation targeting warrant accounting directly, we find that offering warrants in SPAC units have a positive impact on announcement returns.
Item Type: Article
Uncontrolled Keywords: Event study; IPOs; New technology; Regulation; Securities Exchange Commission; Special Purpose Acquisition Company (SPAC)
Divisions: Sabancı Business School > Accounting and Finance
Sabancı Business School
Depositing User: Evrim Akdoğu
Date Deposited: 22 Mar 2023 14:49
Last Modified: 22 Mar 2023 14:49
URI: https://research.sabanciuniv.edu/id/eprint/45080

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