Air Out of the SPAC Balloon

Mar 27, 2021 by
Pete Kremer

A month ago, I shared my thesis about Post-IPO, pre-merger SPACs. At the time, the average SPAC traded at $10.50, the cheapest one in my portfolio was $10.30, and the four SPACs I owned that announced deals each popped from 10-24% on their announcement. What a difference a month makes. The entire SPAC sector deflated over the last six weeks. Every SPAC in my portfolio now trades from $9.70-$10.20 (the most expensive today is cheaper than the least was a short time ago), and SPACs are no longer popping on deal announcements. Across the ecosystem, the risk-reward proposition needs revision:

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