The rise of special-purpose acquisition companies (SPACs) has sparked concerns that media-driven hype influences SPAC returns, especially during key events like IPOs and mergers. This study examines the influence of traditional-media sentiment on abnormal SPAC returns during these key events. We perform our quantitative sentiment analysis using RavenPack's Event Sentiment Score (ESS) and Content Sentiment Score (CSS), and report in detail the results for the ESS. We find no significant association between media sentiment and SPAC returns at merger announcement or IPO dates. The finding shows that the variation in RavenPack's traditional-media sentiment indices does not explain SPAC event returns in our sample, although it does not rule out other forms of investor attention, social-media sentiment, or unmeasured hype. With this caveat, the insight is timely for regulatory bodies such as the SEC, which have proposed new rules to enhance disclosure requirements for SPAC transactions: our analysis suggests that regulatory attention should also consider sponsor incentives, redemption structures, disclosure quality, and post-merger value creation. More in general, our research contributes to the understanding of media influence on financial markets.
Kirtac et al. (Fri,) studied this question.