The SPAC Slowdown: What You Need to Know

Palo Alto CA

13 June, 2021

9:20 PM

Description

By Louis Lehot, a business lawyer at Foley & Lardner LLP in San Francisco and Silicon Valley Special-purpose acquisition companies (SPACs), organizations that raise funds in the public markets for the purpose of acquiring a private company and taking it public, had their heyday during the COVID-19 pandemic. In 2020, 248 companies went public through mergers with SPACs, exceeding the number of such deals in the past ten years combined, according to SPAC Data. While the craze continued through the first quarter of 2021, issuance ground to a stunning halt in April. SPAC Research reports a nearly 90 percent drop in SPAC merger filings from March 2021 to April 2021. The overall market value of SPAC mergers has fallen as well; CNBC’s SPAC Post Deal Index, which is comprised of the largest SPACs within the last two years, has fallen more than 20 percent year-to-date. The plaintiffs’ bar has found SPACs, and have announced a plethora of stock-drop investigations and class-action lawsuits. Now that it seems the SPAC bubble has burst, what’s next? Read More