The course of these legal “shells” listed on the stock market, supposed to buy businesses with high potential, has been in free fall since the beginning of 2021.
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The Fed gave, the Fed resumed. During this period of bursting of the financial bubble at Wall Street, the subject applies perfectly to the Spacs, the Special Purpose Acquisition Companies, which never cease to collapse on the stock market with the end of the free money acted by the American central bank. These companies were empty shells, listed on the stock market, and supposed to buy companies with promising potential with the money entrusted to them by investors. These Spacs were nicknamed “white check”, because investors did not know what the company would be bought.
The maneuver had the advantage of facilitating the target’s stock exchange, without going through the slow course and protector of traditional stock market IPOs, and to collect a market capital gain more quickly. Las, everything did not work as expected, with the breakup of the Spac bubble, from January 2021. The shares, which were worth 10 dollars (9.30 euros), flew … before S ‘ collapse. This is the case of that of the Sofi financial loans, set up from 10 to 28 dollars in January 2021, and which is only worth 4.80.
Same stampede for HIMS, which allows you to order Viagra by Internet, whose value fell from 25 to 3.50 dollars after touching a lower $ 2.72 in early May. We can also cite WeWork, shared office company, fellowship in the fall of 2021, which lost more than 30 % of its value, while the media group Buzzfeed fell by 55 %. The ETF Spak, the investment fund that buys all Spacs in the United States, has seen its course divided by three since the peak of January 2021. Clearly, the savers who took the train on the move during the Introduction on the stock market, lost their shirt.
Everyone opens their umbrella
Now, it is the promoters of the 600 SPACs in search of investment who risk losing the $ 5 million at $ 10 million in commissions that they are supposed to win during this type of operation. Explanation: they generally have two years to invest the funds entrusted to them, otherwise they must return them. The maximum amounts were collected in early 2021: according to the Wall Street Journal, 280 vehicles of this type must invest before the first quarter 2023.
Except that this is the disaster: stock market valuations are in free fall, unlisted companies do not want to sell themselves, and, to save their committee, SPAC managers are likely to rush into poor quality businesses . Admittedly, these companies are paying less today, but they have much less flourishing prospects, with the disruption of production channels, inflation and labor shortages. Moreover, a parallel market, that of classic IPOs, is almost frozen, after the fireworks at the beginning of 2021.
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