New SPACs Head Into 2021 With Deal Markets In Sight

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New SPACs Head Into 2021 With Deal Markets In Sight

According to a recent S&P Global Market Intelligence analysis, a record of 218 new SPACs debuted in the U.S. in 2020 (as of Dec. 17). SPACs, which are skeleton organizations that launch with the intention of buying and reverse merging with a private company, raised $74.49 billion in the process.

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Q3 2020 hedge fund letters, conferences and more

Key highlights from the analysis include:

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  • The prior record for SPAC IPO proceeds was set in 2019 when 52 blank-check companies went public and raised $13.31 billion.
  • Among the companies that went public via a SPAC were DraftKings Inc., Global Blue Group Holding AG and Fisker Inc.
  • Of the 218 SPACs that launched in 2020, 51 intended to look at companies in the technology, media and telecom industries, 37 planned to go after healthcare companies and 24 were pursuing financial companies. There were 57 SPACs that launched with no expressly stated target industry.

New SPACs Head Into 2021 With Deal Markets In Sight

Hundreds of blank-check companies are heading into 2021 on the hunt for a deal after yet another record-breaking year.

Once viewed as last resorts to take a company public, special purpose acquisition companies have entered a renaissance with private market investors and executives looking for more alternatives beyond the traditional initial public offering.

The awakening reached a new high in 2020 when SPACs stampeded into the public markets after the COVID-19-induced equities downturn of March and April. A record 218 SPACs, some backed by the likes of hedge fund billionaire Bill Ackman, former Speaker of the House Paul Ryan and Chicago Cubs Executive Chairman Tom Ricketts, debuted in the U.S. in 2020, according to S&P Global Market Intelligence data as of Dec. 17. SPACs, which are skeleton organizations that launch with the intention of buying and reverse merging with a private company, raised $74.49 billion in the process, Market Intelligence data show. The prior record for SPAC IPO proceeds was set in 2019 when 52 blank-check companies went public and raised $13.31 billion.

Now, Wall Street is readying itself for a barrage of SPAC-led deals in the coming years that could bring scores of private companies public and cement the vehicle's place as a credible alternative to the IPO.

New SPACs

Read the full article here by S&P Global Market Intelligence

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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