SPACs have increasingly turned to anchor investors to pull off IPOs — but it appears these backers tend to dump the stock soon after the offerings, Axios reports.
Deals in which at least 75% of the capital came from anchors have underperformed those in which anchors made up less than 25%, according to SPAC Research.
One byproduct of a weakened demand for SPAC IPOs among investors has been the uptick in anchors, who make early commitments to buy large chunks of the IPO.
Sponsors often offer anchors more favorable terms, like the opportunity to receive founder shares.
The trend has some investors worried that it may be a sign of low-quality SPACs that need expensive sweeteners. As a result, anchors may be getting sweet deal terms, but it’s not enough to hold on.
