Investors would prefer to invest in moonshot megaprojects over, like, infrastructure megaprojects.
I don’t think this is true; as in corporate equity markets, the preference should be responsive to price, and equity shares should trade over naive book value, but at a price where the marginal investor is indifferent to buying more.
In fact, insofar as the Miller-Modigliani assumptions hold, any capitalization of the project in terms of equity and debt should trade at the same total price (and so, raise the same funding), just with a different mix of the total coming from the debt and the equity.
should they be incentivized to abort?
Clearly that would be ideal, but this scheme doesn’t make this issue worse than the status quo (and provides the advantage that at least there’s some market-based metric to tell you that the project is going off the rails).
I don’t think this is true; as in corporate equity markets, the preference should be responsive to price, and equity shares should trade over naive book value, but at a price where the marginal investor is indifferent to buying more.
In fact, insofar as the Miller-Modigliani assumptions hold, any capitalization of the project in terms of equity and debt should trade at the same total price (and so, raise the same funding), just with a different mix of the total coming from the debt and the equity.
Clearly that would be ideal, but this scheme doesn’t make this issue worse than the status quo (and provides the advantage that at least there’s some market-based metric to tell you that the project is going off the rails).