Why the SPAC Boom Fizzled - What Went Wrong

In March 2021, special-purpose acquisition companies raised $36 billion. In July 2022, no new SPACs raised money. 

At their peak, SPACs accounted for 70% of all IPOs, with $95 billion raised. But now, the market has dried up and shares of companies that did SPAC deals have crashed. WSJ explains the decline of the IPO vehicle.

The great un-SPAC-ing

More than 800 SPACs raised capital between May 2020 and December 2021. Underwriting fees were collected; questionable incentives and complexity remained.

SPACs used to be a curious capital-markets sideshow: complex, obscure, hardly novel. A conventional initial public offering underwritten by investment banks was the marker of corporate maturity; merging with a pile of cash and entering the stockmarket by the backdoor was not. This changed when stockmarkets rallied from their covid-induced lows.

Find out more from The Economist HERE.

Spacs: under the microscope

Spacs have pulled in billions of dollars from investors over the past couple of years. But as the FT’s Ortenca Aliaj reports, they’ve also attracted intense scrutiny from regulators. Of particular concern has been the fast-track route to public markets offered by Spacs, as well as some optimistic revenue projections. So, where does that leave the Spacs market?

The IPO is dead! Here comes the SPAC!

Are SPACs a useful innovation, a mania, or both? The SPAC boom in part reflects a rebellion by Silicon Valley types, who have long grumbled about having to go through an IPO.

Silicon Valley has thrived by inventing new ways of doing things, from searching for information to contacting friends. So it may come as no surprise that the Valley is eagerly embracing another sort of disruption: special-purpose acquisition companies (SPACs), as an alternative to the conventional initial public offering (IPO) for startups.

Here is a selection of articles from The Economist on the SPAC.

• The Spectacular boom on Wall Street
• Why SPACs are Wall Street’s latest craze
• What the SPAC craze means for tech investing
• Amsterdam’s financial center gains an edge over continental rivals

What Happened to China's Superstar Entrepreneur Jack Ma? - WSJ

After Jack Ma criticized Chinese regulators, Beijing scuttled the initial public offering of his fintech giant Ant and he largely disappeared from public view. WSJ looks at recent videos of the billionaire to show how he got himself into trouble.

RealReal’s Biggest Hurdle Will Be Keeping It Real After IPO

As The RealReal Inc. prepares to go public, the online marketplace for used luxury goods faces a big challenge: weeding out the fakes.

From Uber to Lyft to Airbnb, it is the year of the tech initial public offering. Jonathan DeYoe, a Bay Area financial adviser to some of the new IPO millionaires, explains how many of his clients acquired so much stock and what he suggests they do with their new riches.



Illustration: Timothy Wong for The Wall Street Journal.