Blank check IPOs, where public offerings are made with the promise to buy another company, have seen a record $78 billion raised this year. That’s more than the combined total of all blank check IPOs in all previous years.
Some investors apparently don’t even care if the stocks they are buying are an actual business. If you have a business you have even thought about taking public, now’s the time. The IPO market is as hot and speculative as it has been since the dotcom bubble.
Bloomberg has more:
Special purpose acquisition companies, or SPACs, went from a back-of-the-shelf financial vehicle to one of the biggest segments of initial public offerings, with a record $78 billion raised in the U.S. this year, according to data compiled by Bloomberg. That exceeded the combined total of SPACs in all previous years and made up about 45% of this year’s record $177 billion IPO volume, the data show.
Blank-check companies, as SPACs are also known, will continue to shake up not only equity markets but also mergers and acquisitions in 2021, dealmakers predict. Still, the flood of SPACs searching for acquisition targets — plus the new ones being raised every day trying to woo investors — could create a
challenging dynamic.“I still think it’s going to be a very, very robust market in 2021,” said Niron Stabinsky, Credit Suisse Group AG’s head of SPACs. “ECM volumes are incredible, which is a function in part of the strong performance of the equity markets in general. At some point it is inevitable that things will cool down and you will see volume slow.”
Credit Suisse alone is preparing to launch seven to eight new SPACs in January, he added.
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