SPACs Sour ๐Ÿ˜

Table of Contents

SPACs Sour

SPACs have been having a rough time as speculative stocks with low earnings decline in value. SPACs are also known as special purpose acquisition companies. They raise money through an IPO and then use the capital to merge with a private company and take it public.

After enjoying a record year in 2021, SPACs suffered at the hands of the tech-driven sell-off last month. According to data from SPAC Research, SPACS raised more than $160 billion on US exchanges in 2021, roughly doubling the previous yearโ€™s level. Investors used to flock into these blank check companies hoping to score big.

Many SPAC sponsors have now been forced to abandon their planned partnerships because of the market sell-off, sometimes even before the SPACs were listed. There are currently around 600 SPACs looking for a company to acquire. And as the market becomes more competitive, many acquisitions have fallen through.

Fintech app Acorns planned to go public via a $2.2 billion SPAC deal with Pioneer Merger Corp, but plans were scrapped. Now, Acorns must pay Pioneer $17.5 million in termination fees. According to SPAC Research, there were about 20 such cases in January, up from single digits in the previous two quarters.

SPACs are extremely volatile due to their speculative nature, so itโ€™s possible we are witnessing the SPAC bubble burst. Do you agree or do you disagree and think SPACs will perform well going forward?

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

Share:
More Posts
Get your daily Invstr Crunch

Get the market news and updates you need, delivered to your inbox or available on our daily podcast.

Risk Disclosure:

Invstr is not a bank and banking services are provided by Vast Bank, N.A.

Brokerage and Banking services are currently only available to U.S. residents.

Invstr app and web services are provided by Invstr Ltd. Advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC) details of which can be obtained here. Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value.

Investing involves risk and can lead to losses. Past performance does not guarantee future results.

Invstr app and web services are provided by Invstr Ltd. Invstr+ advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC). Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value. Vast Bank N.A. a nationally chartered bank and member of the FDIC, provides the banking products, including the products and services related to digital asset accounts. As with any asset, the value of Digital assets can go up or down and there can be a substantial risk that you lose money buying or holding digital assets. You should carefully consider whether trading or holding Digital assets is suitable for you in light of your financial condition. Your digital account does not support wallet to wallet transferring of your digital assets (i.e. cryptocurrencies) outside the platform. Any Digital Assets in your digital asset account are not insured by any government entities, including but not limited to FDIC or SIPC. The Invstr Visaยฎ Debit Card is issued by Vast Bank, N.A. pursuant to a license from Visa U.S.A Inc and may be used everywhere Visa debit cards are accepted. Invstr Ltd, Invstr Financial LLC and Invstr Securities Ltd are subsidiaries of Marketspringpad Holdings (collectively “Invstr”) and Invstr is solely responsible for the application services and website content.

Watchlists provided when users first access the service are not a recommendation to invest. Instead they are provided to help users better navigate the service. Users are free to edit and create their own watchlists. From time to time, Invstr will suggest instruments solely based on an individual’s interest and the interest levels of the Invstr community. The statistical and portfolio builder models generated by Invstr do not reflect actual investment results and are not guarantees of future results. Comments provided by Invstr leaders, influencers or members of the Invstr Community are not recommendations and should not be construed as such. Invstr does not endorse the content or the positions posted by them. Their investment approach, and that of the models provided by Invstr, may be different from yours and may not be appropriate for you.