Bad Bounce for Blank-Check Companies

The air is coming out of the bubble in IPOs of so-called blank-check companies -- fledgling concerns in search of a business plan.

The pace of new initial public offerings from blank-check companies is slowing to a trickle, after a flood of stock offerings began hitting two years ago. Worse, some of those early deals are beginning to unravel as the companies have been unable to find merger partners.

Some of the hedge funds that have been sinking money into blank checks are beginning to turn elsewhere, hoping to catch bigger returns by investing in companies that already have functioning businesses. And one of the biggest investors in blank checks, Amaranth, imploded in September when it lost $6 billion in the span of a week on a series of bad natural gas trades.

Meanwhile, some highly touted blank-check deals have had trouble getting done. Services Acquisition (SVI Quote) has twice extended the deadline for completing its much-anticipated $265 million merger with smoothie chain Jamba Juice. The deadline for approving the deal is now Nov. 17.

Another high-profile blank-check deal that's still pending is the planned $260 million merger of Acquicor Technologies (AQR Quote) and Jazz Semiconductor. Acquicor is the blank check sponsored by Apple (AAPL Quote) co-founder Steve Wozniak and led by other former Apple executives.