SPACs are back for 2025
Days before the November election, Cantor Fitzgerald filed an IPO registration for its 10th SPAC, just months after filing for its ninth. The company raised $2.2 billion across seven SPACs in 2020, taking five companies public, though performance of those companies had been lackluster at best. One went bankrupt, and the other four were trading well below their $10 per share deal price (until the recent resurgence of Rumble). But Lutnick seems bullish on SPACs again, and he isn’t alone.
Since April, 50 SPACs have raised a total of $8.7 billion, including new SPACs from Michael Klein (who took Lucid public) and Harry Sloan and Eli Baker (who took DraftKings public). The money raised is more than double the total amount raised in 2023.
While SPACs, as a whole, performed poorly in the public markets (nearly 50% of the 450-plus ex-SPACs still trading are down more than 90% from their public-market debuts), the combination of a recent uptick in investor sentiment, an IPO window that appears to be thawing, and a number of late-stage private companies that could go public has created an opportunity for SPACs to once again be a vehicle for companies to consider as they weigh going public. Time will tell if investors have short memories regarding the performance of other recent SPACs, or if they’ll mandate higher quality acquisition targets from the sponsors whose last merger targets performed so poorly.
Since April, 50 SPACs have raised a total of $8.7 billion, including new SPACs from Michael Klein (who took Lucid public) and Harry Sloan and Eli Baker (who took DraftKings public). The money raised is more than double the total amount raised in 2023.
While SPACs, as a whole, performed poorly in the public markets (nearly 50% of the 450-plus ex-SPACs still trading are down more than 90% from their public-market debuts), the combination of a recent uptick in investor sentiment, an IPO window that appears to be thawing, and a number of late-stage private companies that could go public has created an opportunity for SPACs to once again be a vehicle for companies to consider as they weigh going public. Time will tell if investors have short memories regarding the performance of other recent SPACs, or if they’ll mandate higher quality acquisition targets from the sponsors whose last merger targets performed so poorly.
