Even before U.S. regulators announced a crackdown on blank-check companies, the market for the once-hot acquisition vehicles was slowing down, Bloomberg reports.
Now, with some Wall Street banks hitting pause on underwriting those listings while they digest the potential rule changes, it could come to almost a complete standstill.
Just 37 special purpose acquisition companies have filed for a U.S. listing since the start of the year, according to data compiled by Bloomberg, compared with 451 filings during the same period in 2021. Even if all of them make it through to an initial public offering, they’ll raise just $5.5 billion in total — a fraction of the $93 billion raised by last year’s same cohort.
The Securities and Exchange Commission last week said it would consider removing clauses that protect a SPAC’s bankers and other advisers if estimates about the future performance of a blank-check company don’t pan out, making them potentially liable for matters long after the IPO closes. It’s a change that’s aimed at discouraging companies from providing overly ambitious projections, and would bring the SPAC listing process closer to that of a traditional IPO. Read more.
