Ann: A new path to accelerate development of key Wyoming Asset, page-42

For most SPACs, founders get to keep 20% of the equity so there is considerable dilution for the company that has been acquired.

Also, the SPAC sponsor only gets to keep their 20% if they consummate a deal within two years. Otherwise, they must return the capital. Thus, it’s in their interest to consummate a deal at almost any price.

Plus, there are so many SPACs in the market today that popular private companies have many SPAC suitors.

As a result, popular private companies can set up “SPAC-offs,” where various SPACs pitch their deal, competing mostly on price.

This is all well and good for the company that is being acquired, but it is bad for investors in the SPAC. The higher the acquisition price, the lower the future return SPAC investors can expect.