January 4, 2022
IPOs: What About SPACs?
EY’s report notes that while SPAC IPOs contracted sharply during the second quarter of 2021, they rebounded toward the end of the year. Overall, the number of SPAC IPOs increased by 136% and the proceeds from those offerings increased by 97%. But SPACs face ever-increasing regulatory headwinds, and according to this Forbes article, they’re also having increasing trouble getting their de-SPAC mergers done:
In total, some 17 SPAC mergers, valued at a collective $37.2 billion, have been terminated during the final six months of 2021, compared to four worth $720 million during the six months prior, according to data provided to Forbes by financial data firm Dealogic. Just seven SPAC deals were terminated in 2020. A slew of others have been delayed into next year, a sign that they may fall through as well, says Jay Ritter, a professor at the University of Florida who specializes in IPOs.
SPACs have proven to be more resilient than I thought they’d be, but it’s hard to see how they aren’t in for some tough sledding during the upcoming year.
– John Jenkins