At Least $6 Billion Worth of SPACs Will Hit Their Deadline This Year
What are they going to do? There hasn’t been a new SPAC deal announced in months, after what seemed like a nonstop flurry of “SPAC-Attack!” announcements. Yet as I recall, SPACs raised $12 billion in 2007. According to research site SPAC Analytics, and 52 SPACs, or $10 billion worth, have yet to find an acquisition. If we subtract the $3.8 billion they raised in 2008, we can roughly estimate at least $6 billion worth of SPACs will be meeting their 18-month deadlines to strike a deal in the coming year. Even if they do find a willing seller, those SPACs have a boatload of headwinds working against them. For starters, you may have noticed the public markets have redefined ugly. SPACs have almost universally seen their share prices drop this year, which bodes poorly for getting a deal approved. Then we have the natural buyer of SPAC shares—hedge funds. It’s an understatement to say they’ve been blasted by redemptions. The blind pools are dry as the desert, and their shareholders have every motivation to vote against any proposed merger to get their money back.
