Retail investors may be dreamers, but dreaming isn’t so easy when share prices drop, Bloomberg reports.
“Dream SPACs” refer to special purpose acquisition companies that have taken pre-revenue firms like space tourism and flying-taxi businesses public.
Retail investors — and even some venture capital firms — believed they were getting in on the early stage in these investments. What they found out was that such firms can be extremely difficult to value.
The market has pivoted to companies with more proven business models.
The switch, coupled with some lackluster performances by SPACs after they announce a deal, has curtailed participation by retail investors, whose once giddy expectations have fallen back to earth. Read more.