Companies that came public through special-purpose acquisition mergers have lost nearly $75 billion in value over more than six months, a media report says.
The Wall Street Journal report highlighted companies like electric-vehicle startup Lucid Motors (LCID) - Get Lucid Motors Report, electric-vehicle-charging company ChargePoint (CHPT) - Get CHARGEPOINT HOLDINGS, INC. Report, space travel company Virgin Galactic (SPCE) - Get Virgin Galactic Report and electric-truck maker Nikola (NKLA) - Get Nikola Corp. Report, among others.
A group of 137 SPACs, including those cited above, that closed mergers by mid-February have lost 25% of their combined value, according to Dow Jones Market Data published in a report by The Journal.
The declines are hitting funds managed by the giant asset manager BlackRock (BLK) - Get BlackRock, Inc. Report and mutual-fund icon Fidelity Investments, as well as "many hedge funds, pension managers and other investors" that raced to put money into the blank-check boom, the Journal reported.
SPAC declines are concentrated in companies tied to green energy and sustainability, although the pullback is widespread.
SPACs are formed for the express purpose of finding and merging with an operating partner. The idea is to speed an operating company to the public markets and avoid the extended process of a traditional initial public offering.
At last check shares of Lucid Motors rose 1.8%, ChargePoint advanced 8.1%, Virgin Galactic traded 3.9% higher and Nikola jumped 2.3%.
The $250 billion market for SPACs was among the hottest sector in finance.
Last week, Forbes Global Media Holdings, the publisher of financial magazine Forbes, said it would go public by merging with special purpose acquisition company Magnum Opus Acquisition.