In 2020 and 2021, the Wall Street and Silicon Valley luminaries who sponsored the flurry of US blank check companies had a simple message for retail and institutional investors: we can be partners who could make fortunes hand-in-hand, the Financial Times reports. Investors would stump up cash and the sponsors would use their connections and acumen to find private companies ready to shine in the public markets.
By 2022, however, the two sides very much resemble combatants. After 613 SPACs came to market in 2021, just 57 have arrived this year, according to data from Dealogic. The private companies that SPACs had previously merged with and brought to the public markets have largely cratered, doomed by excessively rosy financial projections.
In response, lawyers and regulators have sharpened their knives. And for their part, investors have started demanding pricey concessions from the latest SPAC ringleaders to ensure that they are not exploited. Read more.
