Number of the Day
The SPAC Attack, by the Numbers
Everyone’s favorite new route to going public is having quite a year
46%: That’s the share of the $103 billion raised through October 2 in U.S.-listed initial public offerings this year that went to Special Purpose Acquisition Companies, or SPACs, according to financial data provider Dealogic.
So far, 2020 has been an unusually frothy year for public markets, which is on track to overtake the boom years of 1999 and 2000 in terms of the money raised in IPOs. While there’s no reason to think this is a repeat of that era’s dot-com bubble, what’s especially unusual this year is how many companies have opted to go public via SPACs (127 to date, versus just 59 in all of 2019), otherwise known as blank-check companies, in which a shell company raises money from public markets with the aim of later merging with a private company that wants to go public. It’s a model that has been championed by venture capitalist and former Facebook growth hacker Chamath Palihapitiya, who most recently announced that he would be merging one of his many SPACs with the real-estate platform Opendoor.
