The second issue relates to the first. I said ‘almost out of ideas’ deliberately. That is because there is one idea still left in use, and that is rentierism, asset stripping, or turning a fast buck, whichever you wish to call it. The idea behind a SPAC is that a new owner in a quoted entity can both buy a private company and strip value out of it before then selling it on. Much of the gain will simply come from being quoted. The rest will be old style asset stripping. Sales and leasebacks will be in vogue. Leverage will be increased to fund dividend stripping of retained reserves, whilst accounting tricks will be used to push profit upwards. Hollowed out firm creation, I call it. The result is quick bucks from financial engineering with no net gain to society.
The aim is to put investment into a currently private form by taking it public. Without having to pay the 7% tax to the bankers for an IPO. We can tell this is so because cash goes in and doesn’t come out again. You know, investment?