Skip to content

It looks like we may have content for your preferred language. Would you like to view this page in English?

It’s Crunch Time for the SPAC Boom’s First Listings

Mitch Nussbaum, co-chair of Loeb & Loeb’s Capital Markets & Corporate practice, is quoted in a Barron’s article discussing special purpose acquisition companies (SPACs) listed in 2020, which are running out of time to secure merger deals. A declining stock market, the war in Ukraine, rising inflation and fear of a recession have all led to a decrease in IPOs.  

According to the article, mergers for SPACs from 2020 are low; only 84, or 34%, of 248 SPACs listed have yet to close a merger, including 28 that are pending and 56 that have yet to announce a deal. Liquidations among SPACs from 2020 have also increased. 

Mitch told the publication that he expects more SPACs will liquidate due to the volume of blank-check companies that have gone public recently. He pointed to the 248 SPACs that listed their shares in 2020, a 76% increase from the 59 that went public the year before. Liquidations will “go up a corresponding amount,” Mitch predicted.

However, Mitch noted that he doesn’t expect more than 20% of SPACs to eventually liquidate, since blank-check companies can typically extend their merger deadlines until they find a suitable target. 

“SPAC liquidations aren’t necessarily a bad deal for shareholders because companies have to repay shareholders at the offering price, typically around $10 a share or higher, even if a shareholder bought the stock at a lower price. It’s OK if not everyone gets a deal done because the public receives a full return of their investment in that case,” he said.

Click here to read the full article on Barron’s website (subscription required).