How to Use the SPAC Merger & Liquidation Calculator
A special purpose acquisition company (SPAC) raises money in an IPO, parks nearly all of it in an interest-bearing trust account, and has a set window — typically 18 to 24 months — to merge with a private company and take it public. Enter your buy price, the trust value per share, and the price you expect after the merger closes, and this calculator compares your profit under two very different outcomes: redeeming your shares for cash versus holding through the merger.
The trust account is what makes SPAC common shares relatively defensive. If you vote against the merger or simply exercise your redemption right before it closes, you get back the trust value per share — usually the original $10 IPO price plus interest that's accrued since — no matter what you actually paid in the open market. If your buy price was below trust value, redemption alone locks in a profit; if you paid above trust value, redemption locks in a loss.
Holding through the merger is a completely different bet: once the deal closes, your shares convert into stock of the newly combined operating company, and your return then depends entirely on how that business performs — with no trust account backstop anymore. Compare both numbers before deciding whether to redeem, sell in the open market, or ride out the deal.
Frequently Asked Questions
If you exercise your redemption right instead of approving the merger, you get back the per-share trust value (roughly the $10 IPO price plus accrued interest), regardless of what you actually paid for the shares in the market.
If no merger closes within the deadline set in the SPAC's charter (typically 18-24 months), the SPAC liquidates and shareholders get back the remaining trust value per share — which is why SPAC common shares are considered relatively low-risk versus other speculative bets.
Once the merger (de-SPAC) is complete, your shares convert into stock of the newly combined company, and from that point your profit or loss tracks the actual operating business like any other stock.