In the past year or so, SPACs seemed to lose their taint. More than 600 SPACs have gone public since last July, when the SPAC public-offering market heated up dramatically, raising about $200 billion, according to the market tracker SPACInsider, The New York Times reports.
But the big names, star power and seemingly easy money that threw SPACs into such vogue last year only gave the deals a temporary air of legitimacy. Recently, the malodorous whiff that once trailed SPACs has re-emerged, raising doubts about their longevity.
The S.E.C. is investigating at least a handful of SPACs, including the health-care technology company Clover Health and the popular online-betting site DraftKings, after questions were raised over the accuracy of their disclosures and other issues. And critics continue to argue that the terms of most SPAC deals are bad for ordinary investors. Investors are suing SPACs in rising numbers, claiming that misstatements and omissions hurt their stock prices.
Despite that, many SPAC backers — and investors — appear undaunted. Although the pace of listings has slowed, it is running much higher than before the boom began last summer — 25 SPACs have gone public this month, according to SPAC Research. Read more.