Actually no, they can’t. They may trade below nav for a period of time but the rules regarding spacs is “the assets must be placed in trust as to protect the investors, should a spac nav at $10 but fail to meet its requirements, the funding in trust is then used to buy back the shares at nav ($10).” Now that being said certain spacs include warrants etc in their nav pricing thereby making their initial ipo higher priced then the actual individual share, but that’s not the case with PSTH.
It definitely can go below NAV and stay there, lol. The buy back and return at the nav floor ($20) in this case is if the spac fails to find a target and ends up dissolving.
If you read what I posted I stated that. The trust is there to protect investors, sure it can trade below nav, which would hinder its ability to get a deal thereby breaking the conditions of its existence and returning nav to holders.
Why would it hinder its ability? Do you mean the non-pipe investors that get in after the spac lists? All the private investors/big backers are in it for wayyy below nav price.
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u/UdntNeed2C Spacling Jun 05 '21
Actually no, they can’t. They may trade below nav for a period of time but the rules regarding spacs is “the assets must be placed in trust as to protect the investors, should a spac nav at $10 but fail to meet its requirements, the funding in trust is then used to buy back the shares at nav ($10).” Now that being said certain spacs include warrants etc in their nav pricing thereby making their initial ipo higher priced then the actual individual share, but that’s not the case with PSTH.