💡 Background
A Special Purpose Acquisition Company (SPAC) is a company created solely to merge or acquire another business and take it public. It is considered to be a cheaper, faster alternative to an initial public offering (IPO).
Here you have a list of all SPACS: https://spactrack.net/
Companies that go public via SPACs make revenue projections in their investor deck as part of the definitive agreement. Especially when companies are planning their first revenues not before 3-4 years in the future, this is extremely important to make an investment decision. In reality, however, these revenue projections are vague and associated with risks.
Using the example with Lilium, this phenomenon can be observed well.
Lilium has stipulated a profit of over 700 million in 2026 in its SPAC presentation, which seems to be very ambitious. The founder of Lieferando then tried to get involved in a bet with Frank Thelen, the CEO of Lilium, about the actual profit in 2026, which Thelen cunningly avoided.
In contrast to the classic IPO path, the projections must be much less reliable (the exact regulatory differences regarding prospectus obligations would be the first focus for a paper).
This contributes to the issue that investing in companies aquired by a SPAC is more like later-stage venture capital, with a much higher turnover risk.
Now we're getting to a stage where first-generation companies within SPACs are releasing their 2020 revenues and having to take the benchmark with their predictions. There are some overachievements on the market, but also a few heavy misses (see Romeo Power in further readings).
🦾Who We Are
The Chair for Strategy and Organization is focused on research with impact. This means we do not want to repeat old ideas and base our research solely on the research people did 10 years ago. Instead, we currently research topics that will shape the future. Topics such as Agile Organizations and Digital Disruption, Blockchain Technology, Creativity and Innovation, Digital Transformation and Business Model Innovation, Diversity, Education: Education Technology and Performance Management, HRTech, Leadership, and Teams. We are always early in noticing trends, technologies, strategies, and organizations that shape the future, which has its ups and downs.
🎯 Goals
The goal of the paper is to take companies of the last 5 years that went public via SPACs, compare company data projections like revenue with the actual numbers, and then benchmark the delta against a group of different stocks that went public in the last 5 years.
Exciting questions are:
- Magnitude: are companies within SPACs really riskier?
- Direction: If there are significant deviations, do they tend to be up or down?
- Control: are there patterns related to the start of the revenue timeline, or to the industry sector? For example, SaaS or Fintech companies can certainly forecast more accurately than EV, SpaceTech, or Genomics based companies.
🎓 Profile
- Reliable and self-driven
- Enthusiasm for Innovation / Finance / FinTech / SPACS
- Ability to do internet and desk research, connect with practitioners, conduct experimental studies
- Passion to learn more about the future and do research with impact
📚 Further Reading
Garrett-Glaser, B. (2020). Lilium reportedly seeking public investment via SPAC in high-stakes test for electric air taxi-makers. eVTOL. https://evtol.com/features/lilium-reportedly-seeking-public-investment-spac-high-stakes-electric-air-taxi-makers/
Elrod T. W. (2021). Kirby McInerney LLP Announces an Investigation of Shareholder Claims Against Romeo Power, Inc. yahoo!finance. https://finance.yahoo.com/news/investor-alert-kirby-mcinerney-llp-213600209.html
Bryant C. (2020). No Revenue Is No Problem in the 2020 Stock Market. Bloomberg. https://www.bloomberg.com/opinion/articles/2020-09-18/spac-deals-no-revenue-is-no-problem-in-the-2020-stock-market
Bai, J. & Ma, A. & Zheng, M. (2021, January). Reaching for Yield in the Going-Public Market: Evidence from SPACs. Available at SSRN: https://ssrn.com/abstract=3746490 or http://dx.doi.org/10.2139/ssrn.3746490
📄 Requirements to any Work
We do not want your research to gather dust in some corner of bookshelf but make it accessible to the world. Thus, we warmly encourage you to create some or all of the following:
- Infograph - visually represent some of your work (find examples here)
- Slide Deck - summarize your research and possibly present it
- Extract most important sequences from podcasts, videos, and other media
- 3-4 Tweets about the most important findings and summarizing the topic
- optional: Medium Article - let people outside the university know about your research and start your personal brand
📬 How to Apply
If you are interested, please contact Prof. Dr. Isabell Welpe (e-mail below) by submitting your CV and grade report. Please also briefly outline your tentative research idea (research question, data and methods, possible outcomes with a tentative outline all in word as *.docx)
We're greatly looking forward to hearing more about you!
👉 welpe@tum.de