Celebrity SPACs: Advantageous or Gimmicky?

Celebrity involvement with special purpose acquisition companies (SPACs) has received intense criticism by the media and the SEC. Should investment managers be wary of celebrity SPACs? We examine the role of celebrities in the SPAC process and find that celebrity SPACs have more fundings, higher-quality SPAC intermediaries, higher-quality target firms, higher returns, and shorter duration of target acquisitions. Sponsors of celebrity SPACs also have more “skin in the game.” We show that while celebrity chairpeople, CEOs, and board members have positive impacts on the SPAC process, celebrity advisors do not have such positive effects.