The impact of financial crisis on the performance of special purpose acquisition companies (SPACS)

• Autor(a) principal: Moutinho, Pedro Manuel Bacharel de Carvalho Romano
• Data de Publicação: 2022
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.14/40822
• topic: Domínio/Área Científica::Ciências Sociais::Economia e Gestão

Special Purpose Acquisition Companies (SPACs) are listed companies without operating activities, and their sole purpose is to merge with a privately held entity. The analyses performed aimed to compare SPAC-merged companies against companies that followed traditional IPOs. The results point out that SPAC-merged firms have significantly weaker financial characteristics in relation to traditional IPOs and tend to go public during less favorable market conditions. Regarding the likelihood of a company going public through a SPAC merger, its higher leverage and lower growth opportunities are significant drivers for this choice, with emphasis during recession periods. The results from the performance analysis demonstrate that SPAC-merged companies significantly underperform the market and traditional IPOs both in the short- and long-run, and in different macroeconomic periods. SPAC-merged companies present significantly negative excessive returns in both crisis and non-crises periods, and their performance is explained in part by higher market returns and weaker operating profitability.