In this episode of the CLE's vlog & podcast series, Prof. Stefan Bechtold (ETH Zurich) talks to Prof. Saul Levmore (Chicago) about "SPACs, PIPEs, and Common Investors", a recent study by Levmore and Prof. Frank Fagan (South Texas). Special Purpose Acquisition Companies, or SPACs, have come to play a large role in bringing together small and large investors in the acquisition and expansion of private companies. A pessimistic version of this relatively recent alternative to conventional initial public offerings (IPOs), and other methods of investing in companies ready to expand, is that clever sharks take advantage of overly optimistic and ill-informed small investors. In their study "SPACs, PIPEs, and Common Investors", Levmore and Fagan offer a very different view. They show that common investors need someone to locate good investment opportunities, and then they often benefit if another well-informed party can credibly vouch for the entity that claims to have found a good target. Fagan's and Levmore's article also suggests the development of other means of vouching for parties that claim to have found worthy targets for investment.
Paper References:
Frank Fagan - South Texas College of Law Houston
Saul Levmore - University of Chicago
SPACs, PIPEs, and Common Investors
University of Chicago Coase-Sandor Institute for Law & Economics Research Paper 954
https://ssrn.com/abstract=4036767
Audio Credits for Trailer:
AllttA by AllttA https://youtu.be/ZawLOcbQZ2w
