$10.6 billion worth of deals were canceled within the space of one hour. If that sounds like a catastrophe in the making to you, then you’re not too far removed from what some in the special purpose acquisitions (SPAC) field think.
Over 55 merger transactions have gone up in smoke this year, cites a recent Bloomberg report. The biggest reason? The market is growing increasingly risk-averse and is turning away from speculative investments like those in the SPAC market.
Two major cancellations put doubt on the entire industry. One, a deal between Footprint and Gores Holdings VIII (NASDAQ:GIIX) Inc faltered. Footprint by itself–a materials science technology firm–had a market value of $1.6 billion.
Two, Concord Acquisition (NYSE:CND) and a major stablecoin operation severed their connection as Concord retreated before completion. These two deals ultimately shut down in the space of an hour, reports noted.
The losses seen so far are substantial enough, but there are larger problems potentially in the making. There are 470 teams that are still looking to establish new deals. With over 55 out of the running, that already projects a substantial failure rate. If that failure rate ultimately holds true throughout the rest of the market, we could see many more SPAC and merger deals fall through.
