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Bill Ackman and the Securities and Exchange Commission are in complete accord: Special-purpose acquisition companies are stupid. Ackman thinks he’s solved the problem by adding a letter to the acronym and inventing the SPARC—the special-purpose acquisition rights company. The SEC, already a bit wary of the SPARC concept and now very much ready to put an end to SPACs as we know them, isn’t so sure.

In a 17-page release, the regulator said that it is worried about the new security’s potential for manipulation in part because of comment letters it received from three people, one of whom was anonymous…. “The price of subscription warrants would appear to be particularly susceptible to rumors about potential acquisition targets and the terms of potential transactions,” the SEC said in the filing. Because the prices of these warrants could be low, a “bad actor” could manipulate them at little cost, the regulator warned…. Of course, the same could be said about any of the hundreds of the SPACs in the market.

Um, exactly?

“The SEC doesn’t want to create a penny stock that will trade on the exchange,” said one participant in the SPAC market. The way to solve this problem, he suggests, would be for the SPARC to require a minimum price in order to be listed on the NYSE.

Or, you know, you could just do w hat Gary Gensler & co. really want, cut out all of this bullshit and just go back to doing things the old-fashioned way.

Bill Ackman Gets More Pushback From the SEC [II]

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