Why SPACs 2.0 Could Be the Game-Changer No Investor Saw Coming—And How to Cash In Before It’s Too Late
SPAC-tivists—if such people exist—must feel vindicated after so many market analysts left the strategy for dead. In the 2020-2021 frenzy during the Covid-19 pandemic, SPACs were the darlings of the investment market, with celebrities such as basketball legend Shaquille O’Neal and rap mogul Jay-Z attaching themselves to the shell companies. More than 600 SPAC offerings raised a total of $163 billion in 2021 alone, accounting for more than half of all IPO activity in the financial markets.
The high-flying sector had a rough landing, however, as about half the SPACs that emerged during the period failed to consummate deals with actual businesses. When the Securities and Exchange Commission issued new rules requiring greater transparency on matters such as sponsor compensation and conflicts of interest, the regulators had seemingly finished off SPACs for good.
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