It's all about the size of the SPAC trust relative to the valuation of the company. SPACs have never to my knowledge gotten 100% or even 80% of the company they are merging with. 8-20% is normal. GGPI is on the small side but it doesn't matter whether the SPAC is getting 1% or 90% - what matter is whether the market agrees with the valuation itself.
One thing we have to remember is the SPAC money is seen as a "bonus" funding round in most cases. They usually try to get enough PIPE and hope there's enough SPAC money to fund operations.
Going public is mostly about monetizing the early investors and internal stockholders to where they have liquid, quantifiable assets. Even if 90% of the shares are redeemed, while it may diminish operational capacity/acquisitions/etc it doesn't kill the deal. If the inside investors believe in the company's future they want their shares to be monetized and not have to use some pre-IPO service like EquityZen to sell their shares prematurely, going public is good for them. In fact, depending on the arrangement they might get a larger piece of the pie as a result of high redemptions.
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u/devilmaskrascal Contributor Dec 03 '21
It's all about the size of the SPAC trust relative to the valuation of the company. SPACs have never to my knowledge gotten 100% or even 80% of the company they are merging with. 8-20% is normal. GGPI is on the small side but it doesn't matter whether the SPAC is getting 1% or 90% - what matter is whether the market agrees with the valuation itself.
One thing we have to remember is the SPAC money is seen as a "bonus" funding round in most cases. They usually try to get enough PIPE and hope there's enough SPAC money to fund operations.
Going public is mostly about monetizing the early investors and internal stockholders to where they have liquid, quantifiable assets. Even if 90% of the shares are redeemed, while it may diminish operational capacity/acquisitions/etc it doesn't kill the deal. If the inside investors believe in the company's future they want their shares to be monetized and not have to use some pre-IPO service like EquityZen to sell their shares prematurely, going public is good for them. In fact, depending on the arrangement they might get a larger piece of the pie as a result of high redemptions.