SPAC Frenzy Returns: $1.8 Billion Floods In as IPO Market Crashes

17 hours ago 3

Khac Phu Nguyen

Fri, Apr 18, 2025, 11:16 AM 1 min read

Since Trump dropped a tariff weaponry connected planetary markets, sidesplitting IPO appetite and slashing implicit $2 trillion from the S&P 500, you'd deliberation risk-taking would spell into hibernation. Not quite. Nearly a twelve SPAC sponsors person softly filed to rise a combined $1.8 cardinal this period alone. Why? Because erstwhile the IPO marketplace dies, the blank-check assemblage smells opportunity. Serial sponsors similar Harry You and Alec Gores are backmost astatine the tablebetting that the IPO drought volition unit backstage companies into their arms. EY's Mark Schwartz enactment it bluntly: SPACs thrive erstwhile accepted exits stall.

Warning! GuruFocus has detected 2 Warning Sign with AACT.

Momentum is already building. Ares Acquisition Corp II (NYSE:AACT) conscionable announced a $2.5 cardinal woody with Kodiak Robotics, a self-driving trucking firm. That aforesaid day, shares of erstwhile SPAC Webull Corp (NASDAQ:BULL) spiked 500%a reminder that successful this country of the market, thing tin happen. With $4.1 cardinal already raised by SPACs this year, the playbook is backmost successful motion: small-float names, large pops, and sponsors betting the nationalist markets are inactive bare for a definite benignant of storyone with nary amended way to listing.

But let's beryllium clear: this is simply a buyer's market. Two-thirds of post-merger SPACs since 2019 are down much than 80%. Most commercialized beneath the $10 motorboat price. Hedge funds are lone sticking astir for the information netcash redemption positive interestnot the moonshots. As Columbia's David Erickson noted, this isn't a large alternative, it's the lone 1 near for startups that person outstayed their invited successful the backstage markets. No bells. No whistles. Just survival.

This nonfiction archetypal appeared connected GuruFocus.

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