SPACS onTrading212

[212traders]

Hi,

Just wondering are SPACS such as KCAC, THCB etc traded on 212 as ordinary shares? I.e will allow you to exit your position before a merger if you do not agree to the merge or if they have not found a target within their timescale.

[Joey_Fantana]

Yes, there are no restrictions on when you buy or sell them.

[212traders]

Thanks for replying.

I think You may have misunderstood my question.

If trading the ordinary shares on 212 how are votes handled? Also, if before the merger I was not happy with the target acquisition and wanted to trade my shares in for NAV how does that work?

Thanks

[Joey_Fantana]

Ah okay. Well as you purchased your shares second hand from 212, you don’t technically have the voting rights; 212 does.

However! There have been instances like this on other SPACs and other members of the forum have found ways to exercise their rights. Example below;

How to vote for FMCI extension

You can vote for the extension of FMCI using the details below or alternatively, you can call on Google Hangouts which is what I eventually did. This means you won’t pay anything to call the US. You may be waiting in a queue for a long time, if you get cut off just call back. I managed to get through 3 calls later. The number you can call if using Google Hangouts is +1 (877) 787-9239 You can also call using the details below: UK voters (call) - 0330 117 3872 Then type 0018777879239 to get thr…

You can probably find the equivalent phone line details online for the SPAC you’re interested in quite easily.

With regards to the last point, I’m not sure you can trade the shares in for NAV (I presume you mean if you are at a loss on the instrument?) if you don’t like the way things are going. You’ve purchased the SPAC stock, therefore are subject to the market movements of that stock. If you’re not happy with the target acquisition, you have to sell the stock, unfortunately that’s the risk you take.

When you sell, it will be at the price of that stock on the day, so you may profit or not. Although if there is an announcement on a merger target, I don’t think I’ve ever seen such news cause the stock price to fall.

Only way you can trade your shares in for NAV is A) if the SPAC does not complete a merger in the designated timeframe and subsequently dissolves, or B) if you coincidentally sell them when their market price is the same as NAV.

[212traders]

Thanks again for coming back to me.

Most, if not all SPACs will allow you to trade in your shares for their net asset value if you do not wish to take part in the merger. Of course there is not much logic in trading this unless the price is below nav.

What happens if the SPAC cannot find a target and they decide to liquidate?

Thanks

[Joey_Fantana]

@212traders

What happens if the SPAC cannot find a target and they decide to liquidate?

See my final paragraph above. Point A.

[212traders]

That was understood Joey but how does 212 handle the process after liquidation?

[Lonelynx]

@212traders I think there was no such big case until now, so we don’t know how it will turn out.