After a wild year, Spacs are growing up
The volatility of 2020 has pushed listings of special purpose acquisition companies to record levels. But the gradual shedding of their fly-by-night reputation is also driving the surge.
Fear and exuberance are rarely parcelled out rationally. Having fallen more than 80% in the year to December 2018, Bitcoin has since risen 450% to a record of nearly $20,000 on November 30, 2020.
But after a year in which IPOs of special purpose acquisition companies (Spacs) leapt to a record level, it is these vehicles that often get the bad press.
Companies that Spacs merge with are sneaking onto public markets without due process, goes one argument. Sponsors are taking all the juice for themselves at the cost of unwary retail investors, goes another.