Investment & Economy

In April 2020, there are only 10 spac transactions, and spac fever is rapidly cooling down From SPAC Research

The following is the In April 2020, there are only 10 spac transactions, and spac fever is rapidly cooling down From SPAC Research recommended by And this article belongs to the classification: Investment & Economy.

The SPAC mania has been suspended. According to data from spac research, spac broke the record of issuance in 2020 in just three months at the beginning of this year, completing 100 new transactions in March alone. But in April, there were only 10 spac deals, almost stagnating.

According to reports, the US Securities and Exchange Commission (SEC) has begun to privately inform accounting firms that it will change the application of accounting standards to spac. Warrants issued to early investors may not be regarded as equity instruments, but as liabilities. If this becomes law, the relevant transactions and the existing spac will have to recalculate the financial position of 10 KS and 10 QS to confirm the quarterly warrant value.

This potential accounting rule change may bring a huge blow to the SPAC market. “The SPAC deal has basically stopped,” said Anthony decandido, partner of RSM LLP. This will enable these companies to evaluate and value these warrants on a quarterly basis rather than just at the beginning of the establishment of the SPAC, which will cost a lot of money. Many companies lack the ability to do it internally. ” At the same time, restatement of financial position may further weaken investors’ confidence in the highly volatile and often regarded as speculative spac market.

Many spac stocks fell in free fall after being hit by regulation. As of Tuesday’s close, the CNBC spac post deal index, which tracks spac trading, has wiped out the gains in 2021 and has fallen more than 20% year to date.

There are also signs that retail investors may be rethinking the issue of SPAC trading. According to the customer flow of BofA, the net purchase volume of SPAC retail investors in April was significantly lower than the $120 million per week at the beginning of the year.

“Data from early April suggest that retail investors may be returning to ‘tradition’ and prefer established companies to low-priced speculative stocks,” BofA analysts said in a report

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