Super dumb question: As far as I see, SPACs are usually smaller than the companies they acquire. What keeps a company from just paying out some profit to the founders, them setting up a SPAC themselves from that money, IPO it and then reverse merging the company?
Is it time to market? Conflict of interest? Are there limitations to the size difference?
I'm just thinking that since the "vehicle" seems to be useful, shouldn't there a race to the bottom be going on in terms of sponsor margins? As in essence, the value any of them provide seems to be pretty replaceable to me. Or what else do they bring to the table than an empty hull?
Is it time to market? Conflict of interest? Are there limitations to the size difference?
I'm just thinking that since the "vehicle" seems to be useful, shouldn't there a race to the bottom be going on in terms of sponsor margins? As in essence, the value any of them provide seems to be pretty replaceable to me. Or what else do they bring to the table than an empty hull?