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Abnormal returns from insider trades on special purpose acquisition company’s (SPAC’s) warrants
Date:
2022-07-18
Type:
Text
Abstract:
This Master Research Paper explores the disgraceful impact in the finance industry, and
the lucrative returns from the Special Purpose Acquisition Company (SPAC) warrants
with insider and trader trades (information).
A SPAC, also known as “blank check company”, is an innovative publicly-traded investment vehicle which began in 1993 for companies to raise funds via an initial public offering (IPO) to complete a targeted acquisition. An event study methodology was conducted to provide a systematic review of the pre-announcement and post-announcement of price and volume movement on SPAC warrants from different industries. A sample size of 11 events was utilized.
This study finds that the insider traders causes abnormal movement on warrant price and volumes trades over the event period (between trading day -5 to trading day 30) on those SPAC warrant before any positive announcement from the SPAC companies.
A SPAC, also known as “blank check company”, is an innovative publicly-traded investment vehicle which began in 1993 for companies to raise funds via an initial public offering (IPO) to complete a targeted acquisition. An event study methodology was conducted to provide a systematic review of the pre-announcement and post-announcement of price and volume movement on SPAC warrants from different industries. A sample size of 11 events was utilized.
This study finds that the insider traders causes abnormal movement on warrant price and volumes trades over the event period (between trading day -5 to trading day 30) on those SPAC warrant before any positive announcement from the SPAC companies.
Description:
Subject:
- Insider trading in securities
- Going public (Securities)
- Stocks -- Rate of return
