With redemptions still very high and the PIPE market clearly cooling, SPACs that want to get deals done are doing so more creatively. In March, once again, deal activity remained low, with just 9 deals announced in March. Expect more SPACs to liquidate in the coming months, making warrant-based arbitrage more complicated. The most successful SPAC sponsors are juggling multiple vehicles in the market simultaneously. And, with not nearly enough deals coming to clear out the backlog, more SPACs are pulling the plug on offerings.
PIPE IN SPAC TRANSACTION REGISTRATION
Adding to this negative sentiment is the threat of more SPAC regulation from the SEC. While the SEC’s concerns aren’t stopping de-SPAC transactions from being negotiated and completed during 2022, they are likely to mean greater scrutiny of the degree and quality of the SPAC’s disclosure and longer regulatory review periods of proxy statements and registration statements.įor the over 600 SPACs still searching for targets, extensions and more extensions are the norm. The SPAC “big picture” remains generally unchanged: a double-whammy of an oversaturated market and worsening macroeconomic conditions is threatening new issues, deal execution, and deSPAC performance.
Despite increased scrutiny and apparent investor fatigue, deals are getting done and SPACs remain an attractive path to the public markets
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