The 'Mad Money' host said everybody besides institutional money managers get 'the short end of the stick' in SPAC deals.
on Thursday implored viewers to steer clear of special purpose acquisition companies right now, suggesting there's too much risk for retail investors because of the structure of the transactions.
The pace of SPAC deals accelerated this fall, following a months-long slowdown beginning in March after the Securities and Exchange Commission"We're now seeing roughly 20 SPAC fundraises per week. That's insane. Again, that's because while buying a SPAC stock after a deal gets announced is a terrible bet, getting in on a SPAC IPO actually makes sense financially," Cramer said.
Additionally, Cramer said money managers who participate in the initial SPAC IPO typically get lucrative equity warrants alongside the actual shares of stock.
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