The Intelligence from The Economist SPAClash: the buzz and the bust
Apr 27, 2021
Alice Fullwood, Wall Street correspondent for The Economist, shares her insights on the rise and challenges of Special Purpose Acquisition Companies (SPACs), exploring their impact on investments and market trends. Cultural writer Michael Hann discusses Brazil's controversial gun laws, highlighting political implications under President Bolsonaro. The episode also transports listeners to HighMag, the world's largest magazine archive, emphasizing its role in preserving cultural history and the ambitious digitization project that aims to make this treasure trove accessible to all.
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SPAC Capital Raising Spree
- SPACs have raised significant capital, with $83 billion in 2020 and $100 billion in 2021 so far.
- An average of five SPACs were created daily between January and March 2021.
SPACs Cooling Down
- The tide is turning for SPACs as share prices of companies that went public via SPACs have fallen.
- Investor enthusiasm is waning, and premiums on SPACs are decreasing.
Grab SPAC Deal
- The large SPAC deal for Grab, raising $40 billion but with the SPAC itself contributing only 1%, questions the difference between SPACs and traditional IPOs.
- The pipe investing process used in this deal resembles a traditional IPO roadshow.