Bad Bounce for Blank-Check Companies

The trouble is that given how long it's already taken for the initial round of blank checks to complete deals, it's not clear investors have that much more patience.

And of the 67 bank check companies that have completed IPOs over the past three years, only nine have completed mergers. Another 19 blank-check concerns have tentative agreements to merge with existing businesses. That means more than half of the blank-check companies have yet to fulfill their stated mission: finding a company to acquire.

In all, there's roughly $4.4 billion in cash raised from investors sitting in bank accounts waiting for blank-check companies to complete deals, says Maxim Group, a small investment firm that is one of the leaders in underwriting blank-check IPOs.

Investors are starting to getting impatient about all that cash sitting on the sideline.

On Thursday, shareholders of Coastal Bancshares Acquisition(CBAS Quote), which raised $29 million in a February 2005 IPO, voted to liquidate the company rather than approve a proposed merger with Intercontinental Bank of San Antonio, Texas. Next month, investors in China Mineral(CMAQ Quote), which raised $24 million in an August 2004 IPO, will vote whether to liquidate that company.