Price spikes have become a bizarre side effect of SPACs with high redemption, The Daily Dish reports. Retail investors are now targeting SPACs whose shareholders exercise their right to ask for their money back instead of funding the deal.
Redemptions arise when a SPACs share price falls below $10, which has been happening a lot lately. In several instances, more than 90% of shareholders have cashed out. A byproduct of higher redemptions is a low float, which is making shares inherently more volatile, thus allowing retail investors to force the price higher. Read more.
