Abstract: Indirect investor protection (Spamann 2022) makes investment in most public securities safe even without understanding their terms or the underlying business. SPACs disable this protection by offering two alternative payoffs from the same security, the SPAC share, in the de-SPAC: the redemption value, or a share in the post-de-SPAC entity. The former is usually higher and chosen by sophisticated repeat players, while unsophisticated investors elect the latter or receive it by default (Klausner et al. 2022). Before the de-SPAC, the SPAC share price reflects the higher payoff, such that unsophisticated investors systematically overpay. This overpayment is captured, directly or indirectly, by SPAC sponsors and IPO investors. This allows the latter to make money from SPACs even if SPACs create negative social value.