Are post-merger Special Purpose Acquisition Companies different?

Special Purpose Acquisition Companies (SPACs) provide their target firms with an alternative route to go public via a reverse merger. Controlling for year, industry and size, post-merger SPAC firms have similar Total Q ratios and generate similar free cash flow. These results suggest that their market value is consistent with their operational performance. Post-merger SPAC firms invest in their physical and total capital at relatively higher rates. These results are inconsistent with the negative tone of many current studies regarding SPACs and advance the idea that post-merger SPAC firms perform similarly to other public companies when appropriately benchmarked. Overall, SPACs represent a positive financial market development.