Merging with a SPAC Company Instead of an IPO as a Tool to Increase the Company's Value When Implementing Investment Projects

Abstract

Russian financial science uses Western developments in determining the value of a company and studying the formation of an investment project as a tool to increase the value of a company. Research in the field of company value and the impact of an investment project on it should be focused on identifying the applied aspects of existing Western concepts in this area. In this context, it is relevant to study the principles of entry into the stock market of the SPAC companies and an objective assessment of the subsequent implementation of innovative projects of non-public companies. The purpose of the study is to substantiate the practical application of means for assessing the innovative potential of non-public companies in the form of mergers and entering the stock exchange, bypassing the IPO procedure, with a subsequent increase in the capitalized value of the business. The research methodology is based on a theoretical analysis of the main scientific provisions of the investment activity of companies, a comparative analysis of the instruments for entering the stock market and their risk assessment from the perspective of investors. The informational and empirical basis of the study was the statistical data of the market of SPAC-companies in the US stock market. The object of the study is a way for non-public companies with attractive investment projects to enter the stock market through M&A with a SPAC company instead of an IPO. Scientific novelty lies in the coverage of the theory and practice of the process of entering the stock exchange of non-public companies through merging with SPACs present on the American market, in the interpretation of the practice of transactions in the implementation of an investment project as a tool to increase the company’s value in the context of the challenges facing the national economy. The findings indicate the correctness of the assertion that the introduction of the SPAC companies into Russian practice requires careful adaptation as well as the development of transparent procedures by the mega-regulator.