Wall Street’s SPAC engine restarts as deal volume hits post-2021 high
Remember SPACs? They are showing signs of life again. So far this year, 89 SPACs have launched IPOs, according to data from SPACInsider. That’s the busiest year since 2021, when a record-setting 613 SPACs came to market during the height of the investment craze. SPACs are special purpose acquisition companies , which raise capital in an IPO and use the cash to merge with a private company and take it public, usually within two years. The latest resurgence comes after a sharp, two-year slowdown as regulatory scrutiny , disappointing post-merger performance and rising interest rates dampened investor appetite. Many SPACs liquidated rather than find deals, and the once red-hot sector became a cautionary tale. Now, with traditional initial public offerings returning and the broader stock market charging ahead, dealmakers are dusting off the structure. The proprietary CNBC SPAC 50 index , which tracks the performance of the largest 50 SPACs from the announcement of a merger target until the deal closes, is up 9.5% year to date, trading at levels approaching the 2021 spike. The CNBC SPAC Post Deal Index , comprised of SPACs that have completed their mergers and taken their target companies public, has risen nearly 38% this year. Notably, there have been several cryptocurrency-related deals in the SPAC area lately. Trump Media & Technology Group and Crypto.com agreed to a blank-check deal to launch a treasury-style strategy to accumulate the cryptocurrency platform’s native token CRO. Anthony Pompliano’s ProCap Financial has raised more than $750 million and is going public through a SPAC with Columbus Circle Capital Corp. The firm plans to hold up to $1 billion in bitcoin and aims to offer lending, trading and capital market services. “With the uptick of recent stablecoin and reserve SPACs I must admit that it feels as though a bit of euphoria may be taking over the market,” Morgan Stanley’s trading desk said in a recent note to clients. — CNBC’s Gina Francolla contributed reporting.
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