What's Next for SPACs

With prices, mood, interest, IPO valuation, and deal valuations all coming down, SPAC investors are asking what comes next.
Author:
Publish date:

** Get the Daily SPAC Newsletter **

SPACs joined Tuesday's tech selloff with the average price of a pre-deal SPAC hitting $9.90 -- that's 10 cents below NAV. It's ironic that in a SPAC market that is much more rational (and tradable) than during peak SPAC earlier this year investors have lost much of their enthusiasm. 

Volume across the board has gone down for SPACs with an average daily volume dropping from 580,000 in February dropping to 104,000 in April. In some ways this is good as the higher volumes were partly a sign of some irrational SPAC exuberance, but at these levels investors will be very worried about efficiently pricing as they get in / out of SPACs.

Daily trading volume in SPACs has fallen significantly as a result of decreasing enthusiasm

Daily trading volume in SPACs has fallen significantly as a result of decreasing enthusiasm

The latest SPAC rumor is that Chamath and Social Capital's IPOF is planning to take Equinox public at a valuation around $7.5b (h/t Bloomberg). FinTwit is already debating the merits of the deal given the luxury gym company was hit hard by COVID and so valuation will be key. Will it be one that allows investors to capture the value pre-boom following re-opening or in the fight to get any SPAC deal done will it be overvalued with sensational forward financial forecasts?

Pressure is now on SPAC sponsors as "peak deal" is coming soon -- starting late summer/early fall -- and the number of SPACs that are (a) looking for a deal and (b) are rapidly aging towards their deal deadlines will result in a feeding frenzy for any private companies that have a decent narrative. Further, if the general SPAC mood continues along the current path we could see increasingly few private companies that want to be tagged as a "SPAC."

What is clear is that not even Chamath's SPACs can escape the overall SPAC dynamics of deflating prices and decreasing volume. IPOF is a great example as you can see below how price and volume spiked during "peak SPAC" and have since tumbled.

Chamath's SPACs can't escape the broader SPAC market dynamics

Chamath's SPACs can't escape the broader SPAC market dynamics

The Take Away

Overall, the SPAC market has shaken off the irrationality from early this year, but the pendulum may now be swinging too far in the opposite direction. It will take courage for SPAC investors to stick to their strategies as the malaise continues and "peak deal" nears. 

Other SPAC News

  • In another bad sign for the market, Maquia Capital Acquisition (MAQCU) priced a downsized $160M IPO -- $40M less than originally planned.
  • Vesper Healthcare Acquisition (VSPR) announced the closing of their deal with HydraFacial. It will begin trading as SKIN on May 6, 2021. VSPR gained +6.44% closing at $13.05 on Tuesday
  • Altimar Acquisition Corporation (ATAC) shareholders will meet on May 18, 2021 to vote on the deal that will combine Owl Rock Capital Group and Dyal Capital Partners to form Blue Owl Capital Inc.

Biggest SPAC Gainers
6.44% ~ $ 13.05 | VSPR - Vesper Healthcare Acquisition Corp (Announced)
4.93% ~ $ 10.65 | SVFB - SVF Investment Corp. 2 (Pre-Deal)
2.19% ~ $ 10.28 | FTOC - FTAC Olympus Acquisition Corp (Announced)
1.87% ~ $ 13.61 | RSVA - Rodgers Silicon Valley Acquisition Corp (Announced)
1.52% ~ $ 10.00 | ENNV - ECP Environmental Growth Opportunities Corp. (Pre-Deal)
1.43% ~ $ 9.93 | NAAC - North Atlantic Acquisition Corporation (Pre-Deal)
1.31% ~ $ 10.05 | OMEG - Omega Alpha SPAC (Pre-Deal)
1.27% ~ $ 11.13 | FTCV - FinTech Acquisition Corp. V (Announced)
1.21% ~ $ 10.01 | AVAN - Avanti Acquisition Corp (Pre-Deal)
1.21% ~ $ 9.97 | ANAC - Arctos NorthStar Acquisition Corp. (Pre-Deal)

Biggest SPAC Decliners
-6.73% ~ $ 11.08 | SRAC - Stable Road Acquisition Corp. (Announced)
-5.00% ~ $ 10.08 | CCVI - Churchill Capital Corp VI (Pre-Deal)
-4.51% ~ $ 16.95 | NGA - NORTHERN GN ACQ (Announced)
-3.78% ~ $ 14.75 | RICE - Rice Acquisition Corp. (Announced)
-3.72% ~ $ 19.17 | CCIV - Churchill Capital Corp IV (Announced)
-3.56% ~ $ 17.05 | MUDS - Mudrick Capital Acquisition Corporation II (Announced)
-3.55% ~ $ 16.01 | TPGY - TPG Pace Beneficial Finance Corp (Announced)
-3.23% ~ $ 11.99 | CLII - Climate Change Crisis Real Impact I Acquisition Corp (Announced)
-3.18% ~ $ 36.38 | BRPA - Big Rock Partners Acquisition Corp (Announced)
-2.78% ~ $ 12.95 | TDAC - Trident Acquisitions Corp (Announced)
-2.50% ~ $ 9.75 | GAPA - G&P Acquisition Corp. (Pre-Deal)
-2.46% ~ $ 10.29 | TBA - Thoma Bravo Advantage (Announced)
-2.33% ~ $ 10.50 | AGCB - Altimeter Growth Corp. 2 (Pre-Deal)
-2.29% ~ $ 9.80 | FRXB - Forest Road Acquisition Corp. II (Pre-Deal)
-2.29% ~ $ 9.81 | SBEA - SilverBox Engaged Merger Corp I (Pre-Deal)
-2.22% ~ $ 9.70 | IPVA - InterPrivate II Acquisition Corp. (Pre-Deal)
-2.04% ~ $ 12.94 | CMLF - CM Life Sciences Inc (Announced)
-2.01% ~ $ 10.48 | HSAQ - Health Sciences Acquisitions Corporation 2 (Pre-Deal)
-2.00% ~ $ 9.80 | SCAQ - Stratim Cloud Acquisition Corp. (Pre-Deal)
-1.70% ~ $ 9.83 | FLAC - Frazier Lifesciences Acquisition Corporation (Pre-Deal)

Recent Merger Announcements
May 03 | $ 9.90 | MAAC - Montes Archimedes Acquisition Corp --> Roivant Sciences
Apr 30 | $ 9.94 | GMII - Gores Metropoulos II, Inc. --> Sonder Holdings Inc.
Apr 28 | $ 10.04 | GLEO - Galileo Acquisition Corp. --> Shapeways, Inc.
Apr 28 | $ 9.95 | MRAC - Marquee Raine Acquisition Corp. --> Enjoy Technology, Inc.
Apr 27 | $ 10.05 | BLUW - Blue Water Acquisition Corporation --> Clarus Therapeutics
Apr 25 | $ 10.28 | SEAH - Sports Entertainment Acquisition Corp --> Super Group
Apr 22 | $ 9.97 | HZAC - HORIZON ACQ CP --> Vivid Seats Inc.
Apr 22 | $ 10.92 | FWAA - Fifth Wall Acquisition Corp. I --> SMARTRENT.COM, INC.
Apr 19 | $ 10.10 | DBDR - Roman DBDR Tech Acquisition Corp. --> CompoSecure Holdings, L.L.C.
Apr 15 | $ 9.92 | DEH - D8 Holdings Corp. --> Vicarious Surgical Inc.
Apr 15 | $ 9.88 | CHFW - Consonance-HFW Acquisition Corp --> Surrozen, Inc.
Apr 14 | $ 10.41 | ROCC - Roth CH Acquisition II Co. --> Reservoir Holdings, Inc.
Apr 14 | $ 11.80 | BCTG - BCTG Acquisition Corp. --> Tango Therapeutics
Apr 13 | $ 13.00 | AGC - ALTIMETER GROWTH CORP --> Grab
Apr 08 | $ 9.91 | TWCT - TWC Tech Holdings II Corp --> Cellebrite
Apr 08 | $ 14.75 | RICE - Rice Acquisition Corp. --> Aria Energy & Achaea Energy
Apr 07 | $ 9.93 | CAHC - CA Healthcare Acquisition Corp. --> LumiraDx Ltd
Apr 07 | $ 9.92 | MCAD - Mountain Crest Acquisition Corp. II --> Better Therapeutics
Apr 06 | $ 9.92 | ROT - Rotor Acquisition Corp --> SARCOS CORP.
Apr 06 | $ 17.05 | MUDS - Mudrick Capital Acquisition Corporation II --> The Topps Company

More from Boardroom Alpha

For on-going tracking, analytics, and data on SPACs checkout Boardroom Alpha's SPAC Data and Analytics service.

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