Definitions & Glossary

Bankrupt

A de-SPAC company that filed for Chapter 7 (liquidation) or Chapter 11 (reorganization) bankruptcy protection. Equity holders in bankrupt SPACs almost always lose 100% of their investment.

Zombie SPAC

A de-SPAC company that is still technically alive but showing severe signs of distress: trading below $1/share, burning cash with no path to profitability, facing delisting warnings, or operating as a shell of the business originally pitched to investors.

Survivor

A de-SPAC company that is still publicly traded and has not filed for bankruptcy. Note: 'survivor' does not mean 'successful' — many survivors still trade well below the $10 IPO price and may never recover.

Delisted

A SPAC or de-SPAC company whose shares have been removed from a major stock exchange (NYSE, NASDAQ). Delisting typically occurs due to failure to meet minimum price requirements ($1/share), failure to file financial statements, or voluntary withdrawal. Delisted shares may trade on OTC markets at negligible values.

Estimated Investor Losses

Our estimate of total capital permanently lost by public SPAC investors across all tracked SPACs. This is a conservative estimate based on the difference between capital invested (at ~$10/share) and current or final market value.

⚠️ This is a lower bound. It excludes: warrant holder losses, losses from buying above $10 in secondary markets, and the full impact of dilution from PIPE investors and sponsor promotes.

Bank Fees Earned

Total underwriting fees earned by investment banks for managing SPAC IPOs. Banks typically earn 5.5% of IPO proceeds — 2% upfront and 3.5% deferred until merger completion.

Peak Market Cap Destroyed

The sum of peak market capitalizations across all bankrupt de-SPACs. Represents the maximum amount of paper wealth that existed before these companies collapsed.

⚠️ Peak market cap reflects speculative highs that few investors actually sold at. Real investor losses are lower than this number.

SPAC (Special Purpose Acquisition Company)

Also known as: Blank check company

A shell company that raises money through an IPO with no existing business operations. The sole purpose is to acquire a private company (the 'target') within a set deadline (typically 18-24 months), effectively taking the target public without a traditional IPO process.

SPACs are registered with the SEC as blank check companies under SIC code 6770.

De-SPAC

Also known as: Business combination, SPAC merger

The process of a SPAC completing its merger with a target company. After the de-SPAC transaction closes, the combined entity trades on public markets under a new ticker. This is the moment retail investors' capital becomes exposed to the target company's actual performance.

De-SPAC transactions typically include investor presentations with revenue projections that are exempt from liability under the PSLRA safe harbor — a protection not available in traditional IPOs.

Sponsor

Also known as: SPAC sponsor, management team

The individuals or entities that create and manage a SPAC. Sponsors typically invest ~$25,000 in exchange for 20% of the post-IPO equity (the 'promote'), creating an enormous asymmetry: sponsors risk $25K while public investors risk hundreds of millions.

Sponsor Promote

Also known as: Founder shares, Class B shares

The ~20% equity stake sponsors receive for organizing the SPAC, purchased for a nominal amount (typically $25,000). These shares convert to common stock at the de-SPAC, diluting public shareholders. The promote incentivizes sponsors to complete any deal — even a bad one — rather than return money to investors.

Trust Account

Also known as: Trust, escrow

The bank account holding IPO proceeds (typically invested in U.S. Treasury securities) until the SPAC completes a merger or liquidates. The trust is designed to protect investors' capital — in theory, investors can always redeem their shares for ~$10/share from the trust.

Stanford research found the median SPAC holds only $6.67 in cash per share by merger time (not $10), due to sponsor dilution, fees, and expenses.

Trust Size

Also known as: IPO proceeds

The total amount of capital raised in the SPAC's IPO, held in trust. On SPACGraveyard, trust size is sourced from SEC filings (S-1, prospectus) and EDGAR XBRL data.

Redemption

Also known as: Share redemption

The right of SPAC shareholders to return their shares for ~$10/share from the trust account before a merger closes. High redemption rates signal investor skepticism about the proposed deal. When 90%+ of shareholders redeem, the target company receives almost no capital — often leading to rapid failure.

Post-Merger Return

Also known as: De-SPAC return

The percentage change in stock price from the standard SPAC IPO price of $10/share to the current or final trading price. This measures how much value public investors gained or lost.

Peak Market Cap

Also known as: Peak valuation

The highest total market capitalization reached by the de-SPAC company after the merger closed. This represents the maximum paper value — often driven by retail speculation — before the inevitable decline.

Dilution Score

A computed metric estimating how much public shareholders were diluted by the combined effect of sponsor promotes, PIPE investments, warrant exercises, and earn-out provisions.

Going Concern Warning

An auditor's formal statement that there is 'substantial doubt about the entity's ability to continue as a going concern' — meaning the company may not survive another 12 months. For de-SPACs, this is often a precursor to bankruptcy.

44% of de-SPACs have received going concern warnings, compared to ~22% for traditional IPO companies. Sourced from annual and quarterly SEC filings.

Reverse Split

A corporate action that reduces the number of outstanding shares while proportionally increasing the share price. SPACs use reverse splits (e.g., 1-for-20) to artificially boost their stock price above $1 to avoid exchange delisting — typically a sign of severe distress, not recovery.

Tracked via SEC filings and exchange notifications. A reverse split on a de-SPAC is almost always a negative signal.

PIPE Investment

Also known as: Private Investment in Public Equity

Additional private capital raised alongside the de-SPAC merger, typically from institutional investors. PIPE investors often receive shares at a discount and can sell immediately after merger close, putting downward pressure on the stock price and diluting existing shareholders.

Warrant

A derivative giving the holder the right to buy shares at a fixed price (typically $11.50) after the de-SPAC. Warrants are included as 'sweeteners' in SPAC IPO units. If the stock falls below the exercise price, warrants expire worthless — as happened with the vast majority of de-SPACs.

Warrant losses are not included in our headline investor loss estimates, making the true total destruction even higher.

Liquidation

When a SPAC fails to complete a merger by its deadline and returns trust funds to shareholders (~$10/share minus expenses). While liquidation protects investors' principal, it means the sponsors failed and investors' capital was locked up earning minimal returns for 1-2 years.