There have been 378 initial public offerings (IPOs) in the US in the first three months of 2021. That’s more than in any full calendar year between 2003 and 2019. The $139 billion raised so far this year is more than two and a half times the yearly average over this period. They already have what was raised last year ($179 billion across 450 IPOs) clearly in their sights.
After a two-decade period in which the number of US public companies fell by almost half, this is a welcome resurgence. But peeling back the onion reveals there is more to it than meets the eye.
Important Risks: Investing in SPACs is complex and may involve high risk. This paper is a high-level introduction on SPACs for financial professionals and institutional investors and it is not meant to be relied on as a sole source to understand SPACs. The accounting for, and financial reporting of, SPACs is also complex. The Securities and Exchange Commission (“SEC”) is continuing its focus on concerns around certain aspects of SPACs, including the treatment of warrants related to SPACs. Readers are strongly advised to continue to monitor for, and review, SEC investor alerts for more up-to date information on SPACs. Investing involves risk, including the possible loss of principal.
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