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SPACs are, in practice, a Hail Mary for companies with little hope of ever going public the traditional way because they’re just not that attractive to real inv

SPACs are, in practice, a Hail Mary for companies with little hope of ever going public the traditional way because they’re just not that attractive to real investors. Therefore, if a company goes public via a SPAC, you should assume they’re in a very weak position. So, while you could conceivably sue (and perhaps get a settlement out of them) it’s going to be a pretty poor outcome for you even in the best case scenario. If you look at buzzfeed for example (if I had to guess, that’s the company you’re with) they’re basically circling the drain and the SPAC was a last ditch effort: if the burned employees of buzzfeed sue them, where’s the money going to come from? Buzzfeed can barely keep the lights on. If they’re offering to work on contingency, go for it, nothing to lose, but don’t pin your hopes on seeing anything close to your unrealised gains. If you’re not with buzzfeed, read pieces like this: https://www.nytimes.com/2022/04/25/business/media/buzzfeed-employees-stock.html https://www.nytimes.com/2022/04/25/business/media/buzzfeed-e...

spac_throwawayy 4y ago
Thanks for the link, I hadn’t seen that (not from buzzfeed). I agree the company won’t be in a strong financial position to pay out a huge penalty, but they have plenty to pay me a settlement for a fraction of my damages (real money to me and insignificant on the scale of a public company). Interestingly, the law firm we’ve spoken too seems to want to avoid arbitration (the opposite of the buzzfeed case). Maybe that depends on the arbitration terms and end goal. (For us I assume it would be a pre-trial settlement.)
- indymike 4y ago
  If the arbitration is non-binding, your lawyers are just trying to save you money.
ab_testing 4y ago
Not the original poster. I had no idea that Buzzfeed was even public. But it looks like they are attractively priced now. They have positive earnings compared to a lot of other SPAC's that never hit profitability and have an extremely low PE of 3.3. What gives. Does the market not see any chance to rebound to the IPO price of around ~10.

spac_throwawayy 4y ago

Thanks for the link, I hadn’t seen that (not from buzzfeed). I agree the company won’t be in a strong financial position to pay out a huge penalty, but they have plenty to pay me a settlement for a fraction of my damages (real money to me and insignificant on the scale of a public company). Interestingly, the law firm we’ve spoken too seems to want to avoid arbitration (the opposite of the buzzfeed case). Maybe that depends on the arbitration terms and end goal. (For us I assume it would be a pre-trial settlement.)

indymike 4y ago
If the arbitration is non-binding, your lawyers are just trying to save you money.

ab_testing 4y ago

Not the original poster. I had no idea that Buzzfeed was even public. But it looks like they are attractively priced now. They have positive earnings compared to a lot of other SPAC's that never hit profitability and have an extremely low PE of 3.3. What gives. Does the market not see any chance to rebound to the IPO price of around ~10.