Stanford Law Professor Michael Klausner's legal push aimed at showing SPACs are a rip-off for everyday investors is going as well as he could have hoped. And some fear it's going too well, Bloomberg Law reports.
The Delaware Chancery Court ruling essentially rubber-stamped Klausner's conclusions about the murky economics of SPACs.
Klausner's victory is important because his criticisms are applicable, in varying degrees, to every spac merger — and there were lots of them.
There were 301 completed SPAC mergers in 2021 and 2022, valued at more than $650 billion, according to spac research. Virtually all those companies' shares have performed poorly post-merger, a factor that would help lawyers calculate potential damages.
Among nearly 250 completed SPAC deals as of mid-2022, only four were trading above their initial offering price, according to Valuation Research Corp.