No, well yes it makes little sense to deviate from $10 by much before announcing a target, but what I am saying is it is difficult to believe so many trade above 20 after target announcement and pre-deSPAC as the $X-$10 resembles magnitude of IPO-pops (ie the deal-making prowess of the sponsor to spin gold out of thin air). So many smart guys selling SPACs, hedge fund happily subscribing the IPOs as arbitrage trades, target companies owned by PEs using SPACs to go public, pipe investors happily invest at de-SPAC stage, so who is paying for all these happy guys? either the economics created by the rainmaking sponsors, some financial engineering, or the secondary investors.
It seems to be a bubble based supply and demand issue, which would point toward the secondary investors paying in. For whatever reason a PE firm can't get as much for a company by doing a traditional IPO as by selling it to a SPAC even though the resulting company is identical, irrationality which indicates to me a bubble at least in the SPAC space.
Try to buy when they first come out. Most I have seen price around $10. They're like a guaranteed long call. If they don't merge/acquire you get your $10 back. Your cost is the time value of the $10. What's that worth? A few cents? But it does tie your trading funds up. Edit: Some come with warrants and that has been the better play IMO.
Start a SPAC $10 per share Make publicity Wait till the stock goes over $20 Sell all the stocks you have After that: Start a SPAC $10 per share Make publicity Wait till the stock goes over $20 Sell all the stocks you have After that: Start a SPAC $10 per share Make publicity Wait till the stock goes over $20 Sell all the stocks you have Repeat the same cycle over and over again, till you find no idiots anymore and retire.
Went short 2000 shares of CCIV today. The name went way up last week on expectation it is "merging" with Lucid, a sexy name. I have seen SPACs going way up on deal announcement, which makes sense, but a SPAC trading at $40 before any announcement is like an IPO is trading at 4x before an IPO-price is even announced, implying traders are saying I will pay 4x wherever you price it. Understanding crazy sentiment can do damage, hedge half of the position and doing it at a reasonable size.