Market Activity

SEC Weighs New Investor Protections for SPACs: Report

May 27, 2021

1 minute read

The SEC is weighing new protections for investors in SPACs, The Wall Street Journal reports.

SEC Chairman Gary Gensler told the House Appropriations Committee on Wednesday in prepared remarks that his staff is developing ideas for new rules or guidelines for SPACs. Gensler questioned whether the SPAC structure appropriately protects small investors, who piled into the recent trading frenzy in blank-check firms.

“They’ve just taken off like wildfire, you might say, in the last six months,” he told the committee during a question-and-answer session. “There’s real questions about who’s benefiting and investor protection.” Read more.

Market Activity

Northern District of California Holds that SPAC Investors have Standing to Sue Regarding Alleged Misstatements About Lucid Motors, But Dismisses Putative Class Action

Plaintiffs who purchased shares in Churchill Capital IV, which later merged with Lucid Motors, alleged that, prior to the merger, the company had made misrepresentations and omissions about its value. However, the court dismissed their claims for failure to identify any misrepresentations because the challenged statements were made before the SPAC and the electric vehicle company had announced that they were in merger discussions.

Market Activity

Trump’s Meme Stock is Skyrocketing but for How Long?

While Trump Media’s financial statements may look paltry so far, it’s difficult to use traditional metrics such as price-to-sales ratios to value the company. As Matthew Tuttle, the chief executive and chief investment officer at Tuttle Capital Management, put it: “This is a meme stock, it’s not the type of thing where you bust out P/E ratios — you can throw that out the window.”