- Pre-merger SPACs offer features that present an arbitrage opportunity for SPAC common shareholders.
- SPAC shareholders have a full redemption right to their share of the collateral trust account that is typically invested in short-term US government securities.
- There is virtually no downside risk if you purchase a SPAC common below the trust value and exit before a business combination is formed.
- SVFA is an example of a SPAC common trading below trust value with a maturity of less than one year.
For further details see:
SVFA: A Low Risk SPAC Arbitrage Play