Zero SPAC Offerings Since August With Market Gone Cold

It had been over a year since the market went a month without a SPAC debut. That ended in September.

(Bloomberg) — It had been over a year since the market went a month without a SPAC debut. That ended in September.

The once-hot market for blank checks where dozens were pricing each month just two years ago has gone cold as investors sour on the back-door listing vehicle and the appetite for riskier assets disappears over economic fears of higher-for-longer interest rates. The last special-purpose acquisition company to debut on a US exchange was 99 Acquisition Group Inc., which raised $75 million on Aug. 17, making it the longest stretch without a new listing since at least July 2022, data analyzed by Bloomberg show. 

A modest 22 SPACs have gone public this year, raising just $2.8 billion, data compiled by SPAC Research show. That’s a roughly 95% drop from this point last year and a slump from 2021’s flood that saw 613 blank checks raise $162.5 billion, the data show. 

While the plunge in new SPACs coming to market may be taken by skeptics as a sign the industry is on life-support, some specialists see it as a return to a reasonable market after frenzied boom days.

“We’re in more of a normal market,” said Patrick Galley, a SPAC investor and chief executive of RiverNorth Capital Management. “People shouldn’t look at it and say SPACs are dead, it’s more that the market from two years ago was abnormal.”

The go-go days of 2020 and 2021 saw more than 850 SPACs raise $245 billion, nearly six-times the amount of cash that the vehicles on US exchanges pooled together in the five years prior to the boom, SPAC Research data analyzed by Bloomberg show. 

This year is on track to see roughly 30 SPACs debut on US exchanges, poised to mark the smallest number since 2016 when 13 blank checks were able to IPO, the data show. Many SPAC specialists see a few dozen new SPACs per year as the likely trend going forward with the vehicle operating as a niche way for companies to go public.

The trickle of new blank checks comes as dozens close shop and return the cash they raised to investors after years of failed deal efforts. Michael Klein’s Churchill Capital Corp. V said late Monday that it will give investors their money back after eight SPACs completed liquidation processes last month.

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