It is commonly thought in investing that one can only achieve superior returns by taking on high risks. However, with pre-merger SPACs, one could theoretically achieve high returns with minimal risks.
The opportunity
To understand this opportunity, you have to understand how SPACs work. A SPAC, like a normal IPO, raises money from investors to purchase a company and bring it to the public markets. There are 3 phases that most SPACs go through – pre-merger, merger announcement, and post-merger.
During the time it takes to find a target, a SPAC will usually trade near