SPAC Employees Who Lost Everything
The SPAC bubble's most devastating casualties weren't investors who made bad bets — they were employees who had no choice. Workers at SPAC target companies were often compensated with equity at inflated post-merger valuations. When those companies collapsed, employees didn't just lose a stock position — they lost compensation they'd already earned. Salaries they'd accepted below market rate. Retirement savings they'd been told were being invested in their future.
The Equity Compensation Trap
When a private company merges with a SPAC, employee stock options and restricted stock units (RSUs) are typically converted into shares of the newly public company. The conversion is based on the merger valuation — which, as we've documented, was routinely inflated. Employees were told their equity was worth millions at the merger price. Within a year, it was often worth pennies.
Worse, many employees had accepted below-market salaries specifically because of the equity upside. A software engineer earning $120K instead of $170K because their equity package was "worth $500K" didn't just lose the equity — they lost the $50K/year salary gap they'd sacrificed for it.
The tax nightmare:Some employees owed taxes on equity that became worthless. Under certain circumstances, the vesting or exercise of stock options created a taxable event based on the stock's value at that time. If an employee exercised options when the stock was at $15 and it later fell to $0.50, they still owed taxes on the $15 valuation. AMT (Alternative Minimum Tax) on worthless stock was a cruel final twist.
Lordstown Motors: 400 Jobs, Zero Equity Value
When Lordstown Motors merged with DiamondPeak Holdings in October 2020, the company employed roughly 400 people. Many had relocated to Lordstown, Ohio, accepting equity-heavy compensation packages. The stock peaked at $31.80. By the time the company filed for bankruptcy in June 2023, shares were worth $0.28. Employees lost their equity, then their jobs, in a town with few alternative employers.
Proterra: 900 Employees, Bankruptcy
Electric bus maker Proterra went public via SPAC in June 2021. The company had 900 employees who received equity as part of their compensation. When Proterra filed for bankruptcy in August 2023, the common stock was wiped out. Engineers who had spent years developing electric bus technology lost their equity savings and their jobs simultaneously.
| Company | Employees at Peak | Equity Value at Merger | Equity Value at Bankruptcy | Jobs Lost |
|---|---|---|---|---|
| Lordstown Motors | ~400 | $31.80/share | $0.28/share | All |
| Proterra | ~900 | $12.50/share | $0 | All |
| Fisker | ~1,600 | $15.00/share | $0 | All |
| Electric Last Mile | ~200 | $10.00/share | $0 | All |
| Canoo | ~800 | $12.30/share | $0.15/share | Most |
| Bird Global | ~500 | $8.40/share | $0 | All |
| Enjoy Technology | ~1,200 | $10.00/share | $0 | All |
The Human Stories
Behind the numbers are real people. A Fisker design engineer who accepted $40K less in annual salary for stock options worth $200K at the merger price. A Bird field operations manager who put stock from both his and his wife's Bird employment into their retirement account. A Canoo mechanical engineer who turned down a job at Tesla because Canoo's equity package was "worth more."
Former employees of bankrupt SPAC companies describe a consistent pattern: initial excitement about going public, pride in their company's valuation, gradual concern as the stock declined, and then helplessness as lock-up provisions prevented them from selling while the shares cratered. By the time employees could sell, there was often nothing left to sell.
The lock-up cruelty: Employee shares were typically subject to 6-12 month lock-up periods after the de-SPAC merger. During this time, insiders and PIPE investors with shorter lock-ups (or no lock-ups) could sell. Employees watched the stock fall day after day, unable to do anything. When their lock-ups finally expired, the stock had often lost 70-90% of its value.
No Safety Net
Unlike investors who chose to buy SPAC stocks, employees often had no practical alternative. They couldn't diversify their compensation risk — the equity was their equity, locked up and illiquid. They couldn't hedge. They couldn't redeem at NAV like hedge fund investors could. They were, in every sense, the most captive and most harmed participants in the SPAC structure.
The SPAC boom created a class of employee-victims that receives almost no attention compared to retail investors. But while a retail investor chose to buy a SPAC stock, employees accepted equity as earned compensation — a fundamentally different relationship to the loss.
Employee counts from company filings and news reports. Equity values from SEC filings. Individual stories from public reporting by Bloomberg, WSJ, and The Verge. Updated March 2026.