How Spacs went splat

Behind the Money

Topher Forhecz

Markets, Investing, News, Banking, Finance, Business, Business News, Crypto

4.4 • 350 Ratings

🗓️ 6 July 2022

⏱️ 20 minutes

🔗️ Recording | iTunes | RSS

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Summary

Spacs, or special purpose acquisition companies, were all the rage at the start of the pandemic. These shell companies raise cash by listing on the stock market, and then seek a merger with a private company. This created a novel way for companies to list on the stock market without having to go through the traditional initial public offering process.

Now, Spacs are floundering. The FT’s Ortenca Aliaj talks with guest host Jess Smith about how the Spac investment boom collided with rising interest rates and regulatory threats, and ultimately went bust.

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For further reading:

Spac boom dies as wary investors retreat

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On Twitter, follow Ortenca Aliaj (@OrtencaAl)

Read a transcript of this episode on FT.com

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Transcript

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0:00.0	Am I missing anything? Is this the right decision?
0:02.0	Could it be a alternative?
0:04.0	Am I too late?
0:05.0	Find clarity in your investment decision-making.
0:08.0	Manage your portfolio for sustainable growth
0:11.0	and regulatory alignment
0:12.0	with the ultimate blend of powerful AI and
0:14.6	industry expertise.
0:16.5	Reduce risk, meet your sustainability goals and push the boundaries of possibilities based on
0:21.1	facts, not opinions.
0:23.0	Clarity AI scaling human decisions through tech.
0:26.6	Visit clarity.
0:28.0	Aye and take action today.
0:31.5	When Artenza Alii was named the F.T's mergers and acquisitions correspondent, it was July
0:36.4	2020, so still the beginning of the pandemic, financial markets were panicked and it was a really
0:41.9	tough time to be covering M&A deals.
0:44.8	There were basically no deals in the entire M&A market had shut down and I was like great
0:49.6	I'm going to lose my job and then Spacks magically appeared and first of all there was one and two and then
0:56.4	late spack listings a day. So Spack stands for a special purpose acquisition company.
1:03.5	The name doesn't give much of a clue as to what it does, but it's basically a financial
1:07.3	investment vehicle that has no operations.
1:10.7	It's like a Shell company.
	...

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