re: Special Purpose Acquisition Company (SPAC) Discussion

Not all perceived violation of parity is glitter and gold.

Your scenario sounds good in theory but there are way too many variables. Initially, most SPACs will trade as units. Those units may be comprised of one share of common stock and warrant, but that may be 1, 1/2, 1/3 of a warrant, and that warrant may be redeemable for full or only 1/10, 1/2, 3/4 or such fraction of common.

Even if all are equal 1:1, The units, commons, warrants and rights all trades individually at any given minute with much volatility. That's not even taking into account the stock's significant disparity down the road due to maturation, cycle, implied risk, hype, market reaction, fair/intrinsic time value, leverage of warrants and the fact that they're not even exercisable, then cash, cashless etc.etc.

Some brokers can split the units into common stock and warrants when available prior to merger but, depending on the stock and amount of shares, they may charge a fee negating your arbitrage opportunity example. The low risk/high reward arbitrage is parking shares at net asset value as I mentioned earlier.