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SPAC IPO Pace Picking Up; Liquidation Rate to Follow?

With the pace of SPAC IPOs picking up again (6 today, 11 tomorrow), the SPAC market and investors could be in for trouble.

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It will be a busy night of SPAC IPO pricings as 11 are expected to price. Given the current, renewed pacing of IPOs (6 today!) and the outstanding supply, the market better get ready for a higher rate of liquidations and bad deals to come. We've said it before, but there simply is no reason -- other than for sponsors, banks, lawyers making money -- for the market to continue to pump out new SPACs. 

There are already over 510 SPACs looking for deals and high quality targets will become increasingly scarce as deals are made. Unless there are more DWAC-like SPACs that are able to make a deal out of nothing but slideware and have the market reward them for it (DWAC closed at $63.25 today). So, if the rate of deals doesn't acceleratea -- and they need to be quality deals -- the market is again setting up for problems.

The resurgence in SPAC issuance should alarm everyone in the ecosystem

The resurgence in SPAC issuance should alarm everyone in the ecosystem

Today's 6 SPAC IPOs almost all traded up, but their overfunded trusts and deal structures are the main reason for it. 

$ 10.05 | TRAQ - Trine II Acquisition Corp
$ 10.10 | TGVC - TG Venture Acquisition Corp.
$ 10.03 | FRLA - Fortune Rise Acquisition Corp
$ 10.00 | INTE - Integral Acquisition Corp 1
$ 10.07 | ONYX - Onyx Acquisition Co. I
$ 10.07 | MLAI - McLaren Technology Acquisition Corp.

Also of note, the SPAC IPOs each traded a significant amount of their float. That suggests that hedge funds are back to their SPAC IPO flipping ways when the deal looks right for it.

Recent SPAC Merger Announcements

We've been seeing renewed retail energy behind SPAC merger announcements with some deal pop and lots of FinTwit chatter. However, only DWAC has showed sustained strength behind the first few days -- it currently is trading over $60. 

Now, investors should take extreme caution with any SPAC that hasn't yet deSPAC'd and is trading significantly above $10. In those instances it should mean the deal is a well valued, there is general excitement and belief in the deal, and their is proof of an ability to execute going forward. In the case of DWAC, it likely only has 1 of these 3 criteria. But, most likely it is more MEME than anything and it should investors should treat it with extreme caution.

Nov 02 | $ 10.34 | SBEA - SilverBox Engaged Merger Corp I --> Black Rifle Coffee Company
Oct 28 | $ 9.90 | TWNT - Tailwind Two Acquisition Corp. --> TERRAN ORBITAL Corp
Oct 25 | $ 10.30 | BRPM - B. Riley Principal 150 Merger Corp. --> FaZe Clan
Oct 21 | $ 63.25 | DWAC - Digital World Acquisition Corp. --> Trump Media & Technology Group Corp.
Oct 15 | $ 9.88 | ADER - 26 Capital Acquisition Corp --> Okada Manila
Oct 14 | $ 9.98 | ACEV - ACE Convergence Acquisition Corp --> Tempo Automation
Oct 13 | $ 10.06 | RBAC - RedBall Acquisition Corp. --> SeatGeek
Oct 12 | $ 9.91 | DUNE - Dune Acquisition Corporation --> TradeZero
Oct 07 | $ 9.90 | FMAC - FirstMark Horizon Acquisition Corp --> Starry, Inc.
Oct 05 | $ 10.38 | SNII - Supernova Partners Acquisition Company II, Ltd. --> Rigetti Co, Inc.
Oct 04 | $ 9.94 | GBRG - Goldenbridge Acquisition Limited --> AgiiPlus
Oct 04 | $ 9.93 | HLXA - HELIX ACQUISITION CORP --> MoonLake Immunotherapeutics AG

Last Call for Podcast Questions for SEAH CEO John Collins

Wejo CEO Richard Barlow on the Know Who Drives Return Podcast

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SPAC Stock Movers

Biggest Gainers
14.44% ~ $ 9.35 | SWBK - Switchback II Corporation (Announced)
7.53% ~ $ 13.00 | CND - Concord Acquisition Corp (Announced)
5.81% ~ $ 10.92 | IVAN - Ivanhoe Capital Acquisition Corp (Announced)
2.30% ~ $ 11.55 | TPGY - TPG Pace Beneficial Finance Corp (Announced)
2.17% ~ $ 10.36 | MOTN - Motion Acquisition Corp (Announced)
2.06% ~ $ 12.87 | MEKA - MELI Kaszek Pioneer Corp (Pre-Deal)
1.89% ~ $ 12.95 | DCRC - Decarbonization Plus Acquisition Corporation III (Announced)
1.74% ~ $ 9.92 | FRXB - Forest Road Acquisition Corp. II (Pre-Deal)
1.53% ~ $ 9.95 | DALS - DA32 Life Science Tech Acquisition Corp. (Pre-Deal)
1.46% ~ $ 10.42 | LMACA - Liberty Media Acquisition Corporation (Pre-Deal)
1.14% ~ $ 10.21 | ADF - Aldel Financial Inc. (Announced)
1.10% ~ $ 12.88 | FST - FAST ACQ CP (Announced)
1.09% ~ $ 9.75 | GOBI - Gobi Acquisition Corp. (Pre-Deal)
1.01% ~ $ 10.05 | MPAC - Model Performance Acquisition Corp (Announced)
.89% ~ $ 10.20 | SVFA - SVF Investment Corp. (Pre-Deal)
.84% ~ $ 9.79 | CPAA - Conyers Park III Acquisition Corp. (Pre-Deal)
.72% ~ $ 9.83 | NSTD - Northern Star Investment Corp. IV (Pre-Deal)
.71% ~ $ 9.87 | CLIM - Climate Real Impact Solutions II Acquisition Corporation (Pre-Deal)
.68% ~ $ 10.38 | SNII - Supernova Partners Acquisition Company II, Ltd. (Announced)
.67% ~ $ 9.80 | IPVI - InterPrivate IV InfraTech Partners Inc. (Pre-Deal)

Biggest SPAC Losers
-8.74% ~ $ 10.34 | SBEA - SilverBox Engaged Merger Corp I (Announced)
-6.80% ~ $ 9.45 | GNRS - GREENROSE ACQUISITION CORP (Announced)
-5.58% ~ $ 10.67 | BENE - Benessere Capital Acquisition Corp. (Pre-Deal)
-3.49% ~ $ 10.52 | KVSB - Khosla Ventures Acquisition Co. II (Announced)
-2.67% ~ $ 11.68 | AGC - Altimeter Growth Corp. (Announced)
-2.63% ~ $ 63.25 | DWAC - Digital World Acquisition Corp. (Announced)
-1.93% ~ $ 10.15 | CBAH - CBRE Acquisition Holdings, Inc. (Announced)
-1.93% ~ $ 9.65 | VLAT - Valor Latitude Acquisition Corp. (Pre-Deal)
-1.78% ~ $ 11.04 | SEAH - Sports Entertainment Acquisition Corp (Announced)
-1.33% ~ $ 9.68 | MITA - Coliseum Acquisition Corp. (Pre-Deal)
-1.30% ~ $ 9.84 | PHIC - Population Health Investment Co Inc (Pre-Deal)
-1.14% ~ $ 13.82 | XPDI - Power & Digital Infrastructure Acquisition Corp. (Announced)
-1.05% ~ $ 10.38 | DGNS - DRAGONEER GR OP (Announced)
-1.00% ~ $ 10.85 | FPAC - Far Peak Acquisition Corp (Announced)
-.99% ~ $ 10.05 | FSII - FS Development Corp. II (Announced)
-.87% ~ $ 10.28 | LEAP - Ribbit LEAP Ltd (Pre-Deal)
-.77% ~ $ 10.30 | BRPM - B. Riley Principal 150 Merger Corp. (Announced)
-.72% ~ $ 9.70 | OSI - Osiris Acquisition Corp. (Pre-Deal)
-.71% ~ $ 9.76 | LVRA - Levere Holdings Corp (Pre-Deal)
-.70% ~ $ 9.96 | AMAO - American Acquisition Opportunity Inc (Pre-Deal)

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(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report.)