SPACs Hit Hard on Merger Monday
Four deals were announced, but performance was underwhelming. Given the overall market s bad day, it s no surprise 75% of pre-deal SPACs declined and now average $9.87.
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Merger Monday returned with four new announced SPAC deals, but ultimately ended in a bit of a thud as all three SPAC stocks that announced this morning fell on the day. More broadly, 75% of Pre-Deal SPACs declined, closing at an
average of $9.87.
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LIV Capital (LIVK) -0.1% to $9.99
The deal selloffs came amid a broader market decline as well - so it s tough to attribute the lack of performance solely on deal conviction - yet most of newly announced deals have not been trading with much enthusiasm. However, as we ve been saying, given there are
Will Honest s IPO Take More Shine Off SPACs?
Muted SPAC M&A pops could spark a shift back to the traditional, longer IPO process for private companies. Hoffman and Pincus file for 4th SPAC.
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Are Traditional IPOs Back in Favor?
The SPAC boom was partly fueled by the myriad of advantages that private companies were given by choosing SPAC as their path to public markets, to name a few:
- a faster/far less arduous offering process
- ability to sell investors on
future projections
Following
The Honest Company (HNST) highly successful day-1 IPO, it s fair to ask if more companies will follow their patient lead in the traditional IPO process. They were famously an early unicorn and then, infamously, lost their unicorn status in a down financing round. Yet the company ultimately recovered, and now are close to profitability and have a $2B valuation after closing yesterday up +44%.
What s Next for SPACs
With prices, mood, interest, IPO valuation, and deal valuations all coming down, SPAC investors are asking what comes next.
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SPACs joined Tuesday s tech selloff with the average price of a pre-deal SPAC hitting $9.90 that s 10 cents below NAV. It s ironic that in a SPAC market that is much more rational (and tradable) than during peak SPAC earlier this year investors have lost much of their enthusiasm.
Volume across the board has gone down for SPACs with an
average daily volume dropping from 580,000 in February dropping to 104,000 in April. In some ways this is good as the higher volumes were partly a sign of some irrational SPAC exuberance, but at these levels investors will be very worried about efficiently pricing as they get in / out of SPACs.
Remember SPACs? Market Focuses on Earnings
An expected quiet day in SPAC land, at least there was one deal announcement, as the market was undoubtedly more focused on big tech earnings.
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Apr 27, 2021
Up and down day for stocks as the market was focused on mega-cap earnings reports due from the likes of MSFT, AMD, and GOOG. The tech heavy Nasdaq 100 dipped, while the S&P500 was relatively flat. Unsurprisingly, there was little mainstream attention towards SPACs today, although this morning did see a late deal announcement bringing the week s total to two. Expect deal flow to remain muted for the time being.
5 hours ago
WOODSIDE, Calif.–(BUSINESS WIRE)–Rodgers Silicon Valley Acquisition Corporation (the “Company”) announced today that, as the result of the U.S. Securities and Exchange Commission’s (“SEC’s”) recent Staff Statement, released on April 12, 2021 relating to the accounting treatment of certain warrants issued by special purpose acquisition companies (“SPACs”), the Company has completed an analysis of the effect of the SEC’s guidance on the accounting treatment of its warrants.
The Company’s conclusion based upon the SEC’s recent guidance has resulted in a corrective disclosure, approved by its auditor, Marcum LLP (“Marcum”). This disclosure is described on Form-8K (“the Filing”) filed today, and will result in a restatement of the Company’s Form-10K for the fiscal year ended 2020. Both the Company’s original Form-10K and restated Form-10KA were timely filed according to Nasdaq rules, and both received the