SPAC Talk
The rush to the exit continues. There are no new SPAC IPOs to report for month of June so far, nor any new IPO registrations. YTD, there have been only 15 IPO pricings, of which six came in February, and only nine new S-1 registrations have been filed thus far. The SPAC IPO pipeline stands at just 45 versus a number that peaked at 310 in September 2021. However, the rush to the exit doors continues. So far in June, we have already seen 16 liquidations completed or scheduled for the month, returning $4.7 billion of trust funds. We are almost certain that the number will be higher by the time we complete the first half of the year. IBC transactions are taking longer to close. The first week of June brought five new IBC announcements, with all these deals valued at $500 million or less, at an average of $267 million per deal, the lowest value since the pre-SPAC boom. While there have been 82 IBC transactions announced in 2023, just 35 de-SPACings have been completed YTD. It is taking longer to close SPAC mergers. On average, it has taken these 35 transactions eight months to close from their announcement date, which compares with seven months and five months for deals closed in 2022 and 2021, respectively. SPACs and the AI wave. If SPACs were all the buzz in 2020/2021, then artificial intelligence (AI) is definitely the buzz of 2023 in the wake of the launch of ChatGPT in late 2022. SPACs are noted for chasing the hottest trends but are they riding the AI wave? The Bloomberg De-SPAC Index (DESPACTR) is up 21% in 2023, for which the AI wave is a contributory factor. Our SPAC Talk Focus considers this topic further.
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