SPAC valuations

Hi guys, does anyone know how valuations change when a SPAC finally merges ?

Where do I find out what the dilution would be for existing shareholders of the merging company and how would I calculate the valuation pre merger based on the market cap of the SPAC (black check company)?

Thanks chaps

2 Likes

I am not an expert, however I guess that it is the following:
-Know the fraction of the “target company” that the SPAC will represent. Let’s call it “Y” in %
-Know the market cap of the SPAC, let’s call it “Cap”

Therefore, market valuation of the target company at any point in time (based on the known SPAC) is = CAP x 100/Y

1 Like

How do I determine the “ Y “ in % ?

However, is this the formula they use in calculating the Fair or intrinsic value of a particular stock. ?

The way I understand - which is potentially wrong. If the SPAC will represent 20% of the target companys equity. The SPAC market cap needs to be multipled by 5. To get 100% equity (valuation)

I’m guessing the shares in the market (float) stays a at 20% after merger?

1 Like