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Negative headlines about SPACs have become so commonplace that they are no longer “sky is falling” stories. But when evaluating the speed of a falling object, isn't it worth asking if gravity is acting similarly on other bodies too?
To answer the question of SPAC performance, we must consider the context of the overall equity market. Therefore, we compared the performance of IPOs versus SPACs in calendar year 2022 YTD and found:
- Total capital raised by new SPAC listings dropped from $128.7 billion to $12.7 billion – a drop of 90%. Whereas the total proceeds from IPOs dropped from $107.4 billion to $6.5 billion – a drop of 94%. SPAC listings raised nearly two times the proceeds of traditional IPOs.
- The number of SPAC listings dropped from 447 in 2021 to 78 – a drop of 83%. Whereas the number of IPOs dropped from 313 to 64 – a drop of 80%. So far this year, there were 14 more SPAC listings than regular IPOs.
- The average size of a SPAC listing was $162.8 million versus $101.6 million for IPOs – average listing proceeds of SPACs were 1.6x that of IPOs.
- As of September end, newly listed IPOs had lost 51% of their listing value whereas deSPACs were down 49% from their listing price (weighted by actual cash deployed).
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