Weakness in SPACs is partially a function of increased competition: With so many SPACs hunting for targets, merger valuations have grown unsustainable, and sponsors are getting laxer about the companies they choose to take public, The National Review reports.
“They are bringing lower and lower quality companies public,” an investment analyst told CNBC. “They run up against the capacity of reasonable quality companies especially in the niches that are popular.”
That means a good chunk of SPACs issued last year will see a longer lag before they take targets public, and the pop in first-quarter M&A activity could prove to be short-lived. Read more.
