One year ago, investors couldn’t get enough of special-purpose acquisition companies. Now, they can’t dump SPACs fast enough.
In 2021, some 613 SPACs came to market, two-and-a-half times as many as in 2020, and raised $163 billion, about twice that of the previous year. New technologies, new capital, and optimistic business projections had investors dreaming of big gains from these blank-check companies, like the 250% pop in 2020. It inflated what, in hindsight, looks to have been a financial bubble.