Date of Award
Bachelor of Science
Special Purpose Acquisition Company (SPAC) mergers have significantly better market-adjusted 1-month returns than traditional Initial Public Offerings (IPOs), with no significant differences in the 3-month, 6-month, 12-month horizons after controlling for the size and profitability of the firm. This paper examines the performance of SPAC mergers and traditional IPOs. Stock (common share) returns, and accounting measures are the variables used to categorize the performance of SPAC mergers and traditional IPOs. These variables are examined throughout the data sample from January 2013 to September 2020, with a focus on the 1-month, 3-month, 6- month, and 12-month market-adjusted returns and the gross profit margin, Return on Assets (ROA), and total assets of SPAC mergers and traditional IPOs following their entry into the public market. A comparative analysis is conducted to see if either variable is drastically different for those of SPAC mergers than traditional IPOs, determining if SPACs are indeed an alternative for the traditional IPO approach to the public market.
Ramprasad, Britney, "Performance Analysis of the “Back-Door” Approach to the Public Market" (2022). Financial Analyst. 19.
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