{"id":564960,"date":"2021-03-09T13:35:40","date_gmt":"2021-03-09T13:35:40","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2021\/03\/09\/is-the-spac-party-coming-to-an-end\/"},"modified":"2021-03-09T13:35:40","modified_gmt":"2021-03-09T13:35:40","slug":"is-the-spac-party-coming-to-an-end","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2021\/03\/09\/is-the-spac-party-coming-to-an-end\/","title":{"rendered":"Is the SPAC party coming to an end?"},"content":{"rendered":"<p><a class=\"content-anchor\" id=\"tldr-story-05\"><\/a> <strong>Is the SPAC party coming to an end?<\/strong> Blank-check companies have jumped the shark: They\u2019re the topic of rap songs (<a href=\"https:\/\/www.youtube.com\/watch?v=9rHkXfaIRTM&t=36s&ab_channel=CassiusCuv%C3%A9e\">watch, runtime: 3:09<\/a>), they\u2019re getting featured in <a href=\"https:\/\/twitter.com\/DoctorSpac\">Twitter memes<\/a>, and promoters are getting bored to a point that one of them named their vehicle \u201cJust Another Acquisition Corp.\u201d Elsewhere, a SPAC <a href=\"https:\/\/techcrunch.com\/2021\/02\/10\/archer-lands-1-1b-order-from-united-airlines-and-a-spac-deal\/\">is investing in a business<\/a> that promises people it\u2019ll develop a flying taxi. But it seems like the punch bowl may be finally running dry as the bond selloff has a knock on effect on SPACs.<\/p>\n<p><strong>Boom time: <\/strong>Growth in SPACs \u2014 publicly traded shells that promise to merge with actual businesses later down the line \u2014 has been nothing short of exponential. Only 59 listed in 2019, raising USD 13.6 bn. In 2020, this almost quadrupled to hit 226, netting a stunning USD 83 bn. And only three months into 2021, 226 SPACs have raised an astonishing USD 73 bn. That, Heather Perlberg writes in an article for <a href=\"https:\/\/www.bloomberg.com\/news\/features\/2021-03-08\/are-spacs-a-good-investment-inside-the-stock-market-s-looming-spac-bubble?srnd=premium-middle-east&sref=mmeFTDW1\">Bloomberg Wealth<\/a>, accounts for more than 70% of the IPO market. All in all, 474 SPACs have made USD 156 bn over the past 15 months, drawing in everyone from Bill Ackman and Paul Ryan to Shaquille O\u2019Neal and Colin Kaepernick. \u201cNowadays everyone who\u2019s anyone seems to be doing one,\u201d Perlberg writes.<\/p>\n<p><strong>Is the party over? <\/strong>With unease in the US bond market rippling through into stocks, investors have lost their appetite for the highly-speculative risk-on assets offered up by the SPAC aficionados. The recently-launched <a href=\"https:\/\/ipox.com\/media\/a-spac-index-has-been-made-etfs-that-track-it-could-come-next\/\">IPOX SPAC index<\/a> is down 20% from its peak in February, putting the market in bear territory, Chris Bryant writes in an op-ed for <a href=\"https:\/\/www.bloomberg.com\/opinion\/articles\/2021-03-08\/spac-party-over-cciv-dive-and-chamath-palihapitiya-spce-sale-say-so?sref=mmeFTDW1\">Bloomberg<\/a>. Many SPACs are no longer trading at a premium, and are now valued below their USD 10 IPO price, a more normal state of affairs, Bryant writes.<\/p>\n<p><strong>Not necessarily:<\/strong> SPACs haven\u2019t yet run into problems raising capital, despite prices falling through the floor, Bryant says. However, lower prices will make it harder for them to finalize acquisitions, and lower subscription rates could raise eyebrows among the hedge fund benefactors that have been so eager to ride the wave. And SPACs could be first on the chopping block when the market rally does come to an end. \u201cWhatever stops this bull market will lay its first sights on SPACs,\u201d said Steven Siesser, a partner with law firm Lowenstein Sandler. \u201cThey'll be the first casualty.\u201d<\/p>\n<p><strong>T<\/strong><strong>he SEC has been sounding the alarm for months,<\/strong> after having cautioned in September about potential trouble down the road. The regulator has put out a <a href=\"https:\/\/www.sec.gov\/corpfin\/disclosure-special-purpose-acquisition-companies\">guidance<\/a> to outline potential conflicts and an exact figure of how much so-called SPAC sponsors can make. Those sponsors usually get paid a 20% bounty known as the \u201cpromote,\u201d as well as other benefits which keeps them safe while public investors are out in the cold.<\/p>\n<p><strong>Check out our explainer on SPACS <\/strong><strong><a href=\"https:\/\/enterprise.news\/egypt\/en\/news\/story\/a6ab3251-641a-4e2c-aa00-6b8486d10c68\">here<\/a><\/strong><strong>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Is the SPAC party coming to an end? Blank-check companies have jumped the shark: They\u2019re the topic of rap songs (watch, runtime: 3:09), they\u2019re getting featured in Twitter memes, and promoters are getting bored to a point that one of them named their vehicle \u201cJust Another Acquisition Corp.\u201d Elsewhere, a SPAC is investing in a [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":564961,"comment_status":"closed","ping_status":"open","sticky":false,"template":"single-feature.php","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[9272],"tags":[633,125,343,439,1510],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-564960","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-macro-picture","tag-enterprisepm","tag-investment-watch","tag-regulation","tag-spacs","tag-the-macro-picture","wpautop","entry"],"acf":{"mongo_id":"1a7f06ad-f882-4d8a-b0c9-0d54eabf7376","is_powered_by":true,"story_type":"1","photo_url":"https:\/\/ent.news\/2021\/3\/430.jpg","photo_position":"above","related_issue":[564950],"teaser":"","voice_url":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.1 (Yoast SEO v27.1.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Is the SPAC party coming to an end? - EnterpriseAM Egypt<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterpriseam.com\/egypt\/2021\/03\/09\/is-the-spac-party-coming-to-an-end\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Is the SPAC party coming to an end?\" \/>\n<meta property=\"og:description\" content=\"Is the SPAC party coming to an end? Blank-check companies have jumped the shark: They\u2019re the topic of rap songs (watch, runtime: 3:09), they\u2019re getting featured in Twitter memes, and promoters are getting bored to a point that one of them named their vehicle \u201cJust Another Acquisition Corp.\u201d Elsewhere, a SPAC is investing in a [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterpriseam.com\/egypt\/2021\/03\/09\/is-the-spac-party-coming-to-an-end\/\" \/>\n<meta property=\"og:site_name\" content=\"EnterpriseAM Egypt\" \/>\n<meta property=\"article:published_time\" content=\"2021-03-09T13:35:40+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/i0.wp.com\/ent.news\/2021\/3\/430.jpg?fit=%2C&ssl=1\" \/>\n<meta name=\"author\" content=\"enterpriseam admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"enterpriseam admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2021\/03\/09\/is-the-spac-party-coming-to-an-end\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2021\/03\/09\/is-the-spac-party-coming-to-an-end\/\"},\"author\":{\"name\":\"enterpriseam admin\",\"@id\":\"https:\/\/enterpriseam.com\/egypt\/#\/schema\/person\/ca597032db7e4db868359c123cec256d\"},\"headline\":\"Is the SPAC party coming to an end?\",\"datePublished\":\"2021-03-09T13:35:40+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2021\/03\/09\/is-the-spac-party-coming-to-an-end\/\"},\"wordCount\":469,\"publisher\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/#organization\"},\"image\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2021\/03\/09\/is-the-spac-party-coming-to-an-end\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/i0.wp.com\/ent.news\/2021\/3\/430.jpg?fit=%2C&ssl=1\",\"keywords\":[\"EnterprisePM\",\"investment watch\",\"regulation\",\"SPACs\",\"THE MACRO PICTURE\"],\"articleSection\":[\"THE MACRO PICTURE\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2021\/03\/09\/is-the-spac-party-coming-to-an-end\/\",\"url\":\"https:\/\/enterpriseam.com\/egypt\/2021\/03\/09\/is-the-spac-party-coming-to-an-end\/\",\"name\":\"Is the SPAC party coming to an end? 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