The SPAC Slowdown

Welcome to the Capital Note, a newsletter about business, finance, and economics. On the menu today: the SPAC craze slows down, Hwang's ...

Image April 02, 2021
April 02, 2021

The SPAC Slowdown

Welcome to the Capital Note, a newsletter about business, finance, and economics. On the menu today: the SPAC craze slows down, Hwang's leveraged blowout, and S&P 4,000. To sign up for the Capital Note, follow this link.

Are SPACs Whack?
The boom in special-purpose acquisition companies (SPACs) has driven global deal activity to its highest level since 1980. Each blank-check company begins with an equity offering and ends with a merger, all in the span of less than two years — great news for the investment bankers collecting fees on the transactions. With 103 SPACs issued last year executing the "reverse mergers" by which they take companies public, M&A activity is up nearly 100 percent since last year. The velocity of SPAC deals is so high that banks are reportedly turning the lucrative deals down:

The pipeline of SPACs rushing to market is getting so clogged that bankers, lawyers and auditors are turning away business as they struggle to keep pace, according to people familiar with the matter. As founders of blank-check companies wait in line, the deep-pocketed investors needed to take them public have grown squeamish.

Some banks, such as Citi and Moelis, are compensating their overworked junior employees with cash bonuses, but analysts appear slated to have a lighter workload this summer as the SPAC craze slows down. In the past two weeks alone, four blank-check deals have been halted, with SPAC shares declining significantly from their highs early this year. The slowdown follows an influx of short-sellers into the ...   READ MORE





Alden Abbott & Tracy C. Miller

Antitrust Should Stay Focused on Consumer Welfare

Antitrust attacks aimed at 'cutting monopoly platforms down to size' harm consumers. ...

Andrew Stuttaford

Leverage, Leverage, Leverage

On the menu today: Archegos, Ark, Japan's financial socialism, Boris Johnson's bad joke, and who really pays ...

Alexander William Salter

Is Economics a Liberal Art?

Why economics should be included in liberal-arts curricula. ...

David Beckworth

Why Investors Can't Quit U.S. Debt

The long love affair between investors and U.S. Treasury securities isn't coming to an end anytime soon. ...

Daniel Tenreiro

The Unwinding of Bill Hwang's Archegos Has Few Systemic Implications

On the menu today: a mammoth margin call, the banks on the hook, and a look back at the failure of Long-Term ...

Jon Hartley

Treat Money-Market Funds Like Banks

The COVID-19 market meltdown highlights the risks of prime-money-market funds. ...


The Case for Nationalism: How It Made Us Powerful, United, and Free

By Richard Lowry

“Makes an original and compelling case for nationalism . . . A fascinating, erudite—and much-needed—defense of a hallowed idea unfairly under current attack.” — Victor Davis Hanson



Learn more about RevenueStripe...
national review

Follow Us & Share

19 West 44th Street, Suite 1701, New York, NY, 10036, USA
Your Preferences | Unsubscribe | Privacy
View this e-mail in your browser.


Posts les plus consultés de ce blog

Chris Ramsey can take the heat, but what would relegation for QPR mean for black managers in the Premier League?

How a team of innovators overcame the odds to create water from thin air

Britain's health service uses long Twitter thread to explain why it needs more black people to donate blood