September 10, 2021

SPAC IPOs Implode in Q2

Well, we all knew that the SPAC market was experiencing a rough patch during the second quarter of 2021, and now we know just how tough things have been.  Here’s an excerpt from this CFO Dive article:

The number of IPOs involving special purpose acquisition companies (SPACs)  plunged 87% from April through June compared with the first quarter of 2021 as regulators and investors stepped up scrutiny of the blank-check companies. Thirty-nine SPACs raised just $6.8 billion during the second quarter compared with 292 that raised $92.3 billion during the first three months of 2021, according to FactSet. The implosion ends more than a year of record growth — SPAC IPOs accounted for more than half of $67 billion in IPO capital raised in the U.S. in 2020, according to Goldman Sachs.

Yeah, I think that qualifies as a slump – and the regulatory challenges for SPACs continue to mount. Yesterday, the SEC’s Investor Advisory Committee approved recommendations to enhance SPAC disclosure requirements. Check out this blog for more on those recommendations.

Despite all of this, there are still a whole bunch of SPACs out there chasing de-SPAC mergers, so even if the IPO market remains depressed, the story of the SPAC phenomenon still has a few chapters to go.

Speaking of SPACs & SPAC mergers, be sure to tune in to our September 22nd joint webcast with on “Navigating De-SPACs in Heavy Seas” to hear our panel of experts discuss the De-SPAC process and the challenges presented by the current regulatory environment.

John Jenkins