Which is why there are rules and layers of checks to actually IPO - another term misappropriated to ICO like currency was misappropriated for cryptocurrency to mislead; stock markets would lose all trust and credibility if they didn't curate and require due diligence.
From my understanding may also be taking advantage of the money the government's currently printing - at the externalized cost of general society, an additional wealth transfer? I haven't looked read too much into SPACs yet, though they certainly did start to pop out of nowhere and in huge sums as "special purpose vehicles;" I'd sure love to raise a quick $1 billion SPAC though to fund my endless projects.
That's not how SPACs work. You can only use the funding raised as basically a dowry for a merger with a private company. It's low risk to investors because they simply get their money back if 2 years pass without a merger, and the people who run the SPAC lose everything they spent on getting their SPAC to the stock market. Right now, the market is saturated with SPACs, but there are only so many private companies looking to go public.
The filings are pretty much the same. The biggest difference, as far as I know, is there's no roadshow to get institutional investors onboard. But this isn't technically a requirement of an IPO. And a direct listing also skips that.
I think what the previous poster was referring to is that the filings for the SPAC (acquisition company) are the same as any other IPO, but there's nothing in the SPAC (just money and a management team). For the company that gets acquired by the SPAC, however, it's a different story. That company does not have to go through the IPO process itself, so it goes public with a lot less regulatory scrutiny than it would have had had it pursued an IPO itself.
That's not really true though. The SPAC needs to file an S-4 before the deSPAC (the merger), which informs investors in minute detail about the target company and the merger deal. I don't know exactly how it compares to an S-1, but it's extremely comprehensive.
The biggest difference I can see is that a traditional IPO can't succeed without getting institutional investors onboard, and there are strict guidelines about what can be pitched to them. The negotiations between a SPAC and its target company are much less constrained.
I'm not an expert in this, so I'm probably wrong on some of the details, but my company is undergoing a SPAC merger, so I've tried to inform myself on how it works.
There are laws for ICOs as well when they are marketed in US: they are securities. The SEC knows this perfectly, they just don't do anything for some reason.
