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A SPACtacular Investment Opportunity? Depends

Last week and the week before, Parts I and II, we discussed the growth of SPACs, the incentives of the various parties, and some historical financial results. This week we write on where and when investors might want to keep an eye on SPACs for opportunities:SPACs Trading Below $10: This should go without saying, but if a SPAC share is trading below $10 (the standard redemption value of a share), an investor could buy the share and just wait to redeem it for $10 to earn a relatively riskless profit. SPACs don’t often trade for much under $10, but when the market is disrupted significantly, there may be more opportunities to pick up free dollars in SPACs than in other sectors because of a factor many investors may not appreciate: how hedge funds employ leverage.

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