There are 586 active SPACs in the market, with a combined capital of $175 billion, Bloomberg reports, citing data compiled from the website SPACResearch.com. For SPAC sponsors, they are opportunities to earn fat fees. For the companies they acquire, SPACs are a way to tap public markets for cash without jumping through some of the hoops required in an IPO. Investors are often attracted to SPACs, both before and after the mergers, because they see them as early stage companies with prospects for blistering growth.
Now another group is getting interested: the short sellers and activist investors who look for companies they think are weak. Short sellers are actively hunting for bets that a company’s share price will fall. Read more.