The SPAC attack
The number of companies going public on the US stock market via a special purpose acquisition company (SPAC) has hit almost 300 this year - and it's only the end of March. According to data from SPAC Analytics, there have been 296 companies go public via a SPAC in the US, which greatly outstrips the 56 traditional IPOs.
What exactly is a SPAC? Good explainer here, but if you're short on time it's basically a public shell company with a big blank cheque that buys private companies.
FOMO
The SPAC boom reflects the state of private markets as much as public, and conditions couldn't be more perfect in both. Startup valuations are near all-time highs and stocks have gained 70% in a year. It's no surprise then that owners want to cash in their shares and investors don't want to get left on the sidelines. With less due diligence, and fewer parties to deal with, SPACs offer a quick solution for everyone.
One particular company, that was unceremoniously rejected by the traditional IPO process back in 2019, has finally got its deal...
WeWork is back
WeWork, a provider of co-working office space, announced this morning that it plans to go public via a merger with Bow Capital in a deal that would value the company at around $9bn. That's a decent outcome for WeWork owners relative to this time last year, but it is still way down on some of the $90-100bn valuation estimates placed on WeWork by the world's largest investment banks when they were trying to court the company 2 years ago.
