On February 15, 2023 the SPAC Distoken Acquisition Corp (Bloomberg Ticker DISTU US) got listed on Nasdaq, marking the reopening of the SPAC market after the autumn period that had seen a substantial freeze of IPO activity in this type of shares.
SPACs, acronym for Special Purpose Acquisition Company, are companies that are formed for the sole purpose of raising money from their investors, and then using it to acquire another company or an existing business.
DISTU was placed at 10$ per unit, with 1 unit comprising 1 ordinary share, 1 warrant and 1 right, the warrant in a 1:1 ratio to ordinary share, and the right with a 10:1 ratio to ordinary shares.
There are several advantages associated with Special Purpose Acquisition Companies (SPACs):
- Public market access: SPACs offer target companies the opportunity to access the public market and raise capital without the complex and costly process of listing on the stock exchange. This makes the acquisition process faster and more efficient than issuing a traditional initial public offering (IPO).
- Investment flexibility: SPACs can be used to acquire any type of business, regardless of industry or geography, allowing investors to invest in different markets and expand their portfolio.
- Investment protection: Investors of SPACs are protected by the redemption clause, which allows them to recover their investments if the acquisition is not completed within the set deadline.
- Potential for high returns: If the acquisition is successful, investors can get a high return on their initial holding, as the valuation of the target company could increase significantly after the acquisition.
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