SPACs were once niche affairs and costly for investors, but their popularity surged in 2020. Has that changed the way they work?
Whether a flood has wiped out the unworthy is a critical question for investors in special purpose acquisition companies . These are blank-cheque vehicles that raise capital through initial public offerings, after which their sponsors hunt for private firms to take public via mergers. Althoughs have been around for decades, they were once niche affairs. Their structure was costly for investors, and companies mostly avoided them.
As sponsors are only paid if they arrange a merger, their incentive is to do a deal, even at a high price. The fatter the slice taken by sponsors and early investors, the worse the stock performance of the merged company. Firms that went public via abetween January 2019 and June 2020 underperformed the Nasdaq composite, an index of American stocks, by 64.1 percentage points in the period to November 1st 2021.fans.
Crucially, there is little evidence of lasting change. “It’s remarkable how little innovation in structure there’s been,” says Mr Klausner. Sponsor shares, warrants and underwriting fees are still present in much the same form. Redemptions and warrants offered are on the up again, and institutional investment has begun to fall.
Ireland Latest News, Ireland Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
UTA’s Gaming-Focused SPAC Sets IPO, Aiming To Raise $200 MillionUTA has become the latest talent agency to play in the public markets, forming a special-purpose acquisition company that will start trading tomorrow on the NASDAQ. Under the ticker symbol “U…
Read more »
BuzzFeed News Union Workers Walk Out in Protest on Day of SPAC VoteMembers of the BuzzFeed News Union staged a walkout on Thursday following nearly two years of contract negotiations, the same day shareholders will vote on whether the company should go public through a SPAC
Read more »
WSJ News Exclusive | BuzzFeed Suffers Wave of SPAC Investor Withdrawals Before Going PublicBuzzFeed will raise roughly $16 million from its public listing, after the blank-check company it is merging with suffered a wave of investor withdrawals, according to people familiar with the situation
Read more »
Apple loses key autos engineer to electric aviation startup ArcherThe move shows that tech start-ups attacking climate issues can attract the most qualified engineers.
Read more »
Kai’s New Gucci Campaign Is a Winter WonderlandThe South Korean singer is having quite an eventful week.
Read more »
What Does It Mean to Languish?Feeling a sense of apathy or general lack of direction? You might be languishing. Here’s what to do about it.
Read more »