Since 2019, over 370 of the spacs have been liquidated after failing to find a merger partner. Of the rest, four out of five saw their shares plummet 70% or more after they found a merger partner.
Spacs, or special purpose acquisition companies, were once all the rage. Since 2019, more than 1,060 “blank cheque” shell companies have been listed on the tech-heavy Nasdaq bourse or the New York Stock Exchange, with the sole purpose of merging with a private company to give it listed status without going through an onerous initial public offering, or IPO, process.
Though spacs have been around since 2009, they gained momentum after the start of the pandemic in 2020 and exploded in 2021 in the aftermath of the meme stock mania.
