After an wave of special purpose acquisition companies, known as Spacs, the tide appears to be turning, with some of the highest-profile examples now under pressure
Spacs — or blank-cheque funds — are shell companies that raise money via initial public offerings before listing on a stock exchange. Then they search for an acquisition, typically a private company. Once a deal is finalised, the Spac takes its target public by absorbing it and its investors take a slice of the new company. If no deal is done, the fund is liquidated and investors are refunded.
Two months ago shares in Sir Richard Branson’s VG Acquisition Corp surged to $17.65 when it announced its merger with 23andme, a genetic testing firm. It has since fallen by 42 per cent to $10.20.
Shares in Churchill Capital Corp IV have halved since its combination with Lucid Motors, an electric carmaker, was announced on … Read the rest