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The SPAC boom is buzzing when investors withdraw money from big names



(Reuters) – Several companies, including Grab Holdings and BuzzFeed, which merged with shell companies to become listed have seen their shares fall, as investors pull up the mat under the shares hyped in Wall Street's frantic blank check deals.

Shares in BuzzFeed, which merged with blanco company 890 5th Avenue Partners, have fallen 40% since debuting on December 6. The digital media company raised a paltry $ 16 million out of $ 288 million in SPAC trust as 94% of its investors withdrew their money.

Grab Holdings, Southeast Asia's largest home delivery and delivery company, has lost half of its market capitalization since its debut on Nasdaq on December 2 after the company's record $ 40 billion merger with a blank-check company.

"Many investors are now looking more at companies with proven credentials, which have shown a history of delivering profits," says Edward Moya, senior market analyst at Oanda. "The frenzy that has driven some of the momentum in SPAC that we saw earlier in the year has clearly disappeared." in order to merge with a private company and make it public.

Because investors are not aware of the target company before listing, SPACs often give them the right to redeem their initial investment as an incentive to put their money in a trust. [1

9659002] The average redemption rate has more than doubled to 58% in the fourth quarter from a year earlier, data from Dealogic showed, as many companies do not live up to investors' high expectations.

Regarding Zoom Video. The communications-supported event management company Cvent, almost 85% of investors redeemed their shares for cash two days before the debut, it appeared in the notification.

The holiday rental company Vacasa received a gross income of ab. released $ 340 million from its debut on December 8, $ 145 million below expectations due to redemption. Reuters.

"SPACS went crazy in February and investors started looking at them as memes. Then Lucid crashed and the SEC started making negative comments and SPAC fell into disfavor," said Matthew Tuttle, CEO of Tuttle Capital Management LLC.

US regulators said last week that they were considering tightening the rules on how insurers, boards of directors and sponsors of SPAC structure fees, issue forecasts and reveal conflicts.

SPACs are among the group that has seen a decline in retail investor participation, according to Vanda Research.

The De-SPAC index, which tracks the 25 largest companies that have implemented a merger with blank checks, has declined by about 43% so far this year after reaching a record high in mid-February. Capital in its annual review. However, 62% of the full year's revenue was collected in the first quarter alone.


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