Energy SPACs performance and governance

Abstract

This study examines the performance of Special Purpose Acquisition Companies (SPAC) operating in the energy sector. Existing since 2003 and labeled as a new asset class, SPACs brought structural changes in the IPO market and outnumbered traditional IPOs in the last few years. A significant proportion of SPACs entering the market are energy-related. This paper analyzes a sample from 2003 to 2023 and provides novel insights on Energy SPAC's financial returns and corporate governance characteristics. We document that Energy SPACs exhibit positive returns at the merger announcement, while merger and long-term returns are negative. Moreover, among the corporate governance characteristics, the most prominent variable is the foreign origin of the CEO.