The implosion of the SPAC boom has taken a long time. We might be in the final stages of the experiment.
When capital was cheap and public markets were hot, special purpose acquisition companies gained popularity. Synthetic companies are taken public with no real operations of their own. They merged with a private company and made their partner public.
Less-mature companies can raise capital and go public using blank check combinations. It seemed like it was a good way to make money. Retail investors don't invest a lot. The results of recent deals have been disappointing.
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The companies backed away from their proposed transactions. The overall SPAC experiment was called a failure by this column because it had not been able to clear any meaningful portion of the growing list of companies. The pace at which traditional IPOs have been able to take billion-dollar companies public is far below the rate at which more companies are created.
Many companies tried to combine SPACs. The electric vehicle SPACs were messy. SPACs are best used for floating less-than-spectacular companies. Retail investors are holding the bag because of the post-combination performance of SPAC deals.
SPAC'd EV company has recently declared bankruptcy. The projections were just that.
We want to know the performance of companies that went public via blank-check combinations. We will discuss upcoming regulatory changes, the growing trend of SPAC deals getting canned, and look to the future. Firms are holding onto their plans for public disclosure. They are either bold, misguided, or something else.
The investing class used to adore the company. The $50 million Series E was led by a16z while the $200 million round was led by NBCUniversal. New ENTERPRISE ASSOCIATES and RREVENTURES were other venture backers. The private-market value of the website was over $1 billion.
The SPAC route was taken by BuzzFeed to the public markets. It is worth about $1.78 per share. The price at which they usually execute their combination is $10 per share.
Techstars, Lux Capital, and RRE invested in Latch, which sells hardware and software to apartment buildings. According to data from PitchBook, it reached a $411.76 million valuation, which pushed it past the $1 billion mark. It is worth $194 million or $1.35 per share today.
AppHarvest, an agtech company that grows crops indoors, raised more than 100 million dollars before going public in a blank check merger. It was worth $1 billion in its public debut. It is worth $260 million, or $2.65 per share.
There is a list going on and on. Dave was valued at $1 billion back in 2019. Its value went up in the deal. The company's value has been slashed by more than 90% with its 89-cent share price.
It is not correct to say that a SPAC combo is a valuation kiss of death.
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