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?

GameStop trading frenzy being probed for misconduct

The trading frenzy that saw unexpected surges in GameStop, AMC and other stocks has now got the attention of federal regulators who are now investigating the rally for market manipulation or other misconduct, The Wall Street Journal reported on Tuesday (Feb. 11), citing sources.

More details from this PAYMNTS. com post - READ HERE

 

The GameStop Rally Explained

Why it's likely not what it seems

How Short Selling Works

Short selling lets investors bet against a stock, profiting when it falls in price, but how exactly does a short work? In this video Richard Coffin discusses the process and the risks it entails.

GameStop: what it reveals about the US stockmarket - The Economist

The frenzied rise of GameStop’s share price baffled Wall Street and panicked the US Treasury. What does the GameStop story reveal about American stockmarkets? "Economist" experts answer your questions.