April 12, 2022
I am an individual investor. SPACs have provided a tremendous opportunity for myself and my peers by giving us the opportunity to research and invest in companies that the broader market is not looking at yet. This creates a level playing field of opportunities that we are unable to achieve with IPOs, which we rarely have the chance to purchase at the IPO price.
I spend 40-60 hours per week researching SPAC companies, and I have developed a small network of friends who do the same. I only end up investing in approximately 1%-2% of SPAC deals, mainly due to valuation concerns about the rest. I am of the opinion that SPACs provide ample disclosures and information for investors to make an informed decision. Of course, many retail investors do not conduct adequate due diligence, but the information is sufficient for those that do, and I doubt that any of the proposed changes will cause others to do additional due diligence.
I do not have a direct opinion about any of the proposed rules, but I ask that you make your final decisions with a mind towards promoting a healthy flow of SPAC deals so that retail investors like myself have a level playing field of access to new companies at the same terms as institutional investors (unlike IPOs). Please do not pursue a goal of choking off SPAC deals, and thus regressively limiting opportunities for retail investors like myself.
(On a SPAC note unrelated to these proposed rules: I ask that you please reconsider the 2021 changes to the accounting treatment of SPAC warrants. This change is detrimental to investors because the resulting wild swings on financial statements causes the net income data in stock screeners to be useless, and thus makes it very difficult to sift through / track a large list of deSPACed companies to find companies with increasing profitability.)