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SVFA: A Low Risk SPAC Arbitrage Play

May 03, 2022 1:02 AM ETSVF Investment Corp. (SVFA)SVFAU, CSH, SPAX, SPC, SPCX16 Comments


  • Pre-merger SPACs offer features that present an arbitrage opportunity for SPAC common shareholders.
  • SPAC shareholders have a full redemption right to their share of the collateral trust account that is typically invested in short-term US government securities.
  • There is virtually no downside risk if you purchase a SPAC common below the trust value and exit before a business combination is formed.
  • SVFA is an example of a SPAC common trading below trust value with a maturity of less than one year.
  • This idea was discussed in more depth with members of my private investing community, Yield Hunting: Alt Inc Opps. Learn More »
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Written by George Spritzer, co-produced by Alpha Gen Capital

A Good Way To Invest Your "Safe" Money in SPACs

SPACs are structured to offer almost no downside risk as long as you sell before a business combination is actually finalized. And

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This article was written by

George Spritzer, CFA profile picture
Targeting 8+% Income Stream using CEFs, ETFs, Munis, Preferreds and REITs

George Spritzer, CFA is a registered investment advisor at Southland Investments and specializes in managing closed-end funds for individuals. George uses the following investment strategies:1) Opportunistic Closed-end fund investing: Buy CEFs at larger than normal discounts to NAV and sell them when the discounts narrow. 2) Exploit special situations: tender offers, fund terminations, fund activism, rights offerings etc. Some of my premium articles are published on Alpha Gen Capital's "Yield Hunting: Alt Inc Opps" https://seekingalpha.com/author/alpha-gen-capital/research

Analyst’s Disclosure: I/we have a beneficial long position in the shares of SVFA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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