FAST FIVE: "This Is Unsustainable": 2021 SPAC Issuance Will Surpass Entire 2020 Total Before End Of March
“This Is Unsustainable”: 2021 SPAC Issuance Will Surpass Entire 2020 Total Before End Of March The last time we addressed the staggering SPAC bubble sweeping across US capital markets – and when we gave Matt Taibbi the mic to express his SPAC views in his uniquely trademark style – was about ten days ago when citing Goldman data, we reported that we have reached a surreal, permanently high plateau where 5 new SPACs price ever single day so far in 2021, and that YTD, 144 SPACs have gone public raising a total of $44 billion.
Remarkably, as even Kostin admits, “the blistering pace of issuance is likely unsustainable” however – just in case it is – he calculates that if the current pace of issuance persists, 2021 will surpass the 2020 full-year total before the end of March.
$250 mn from 2010-19), smaller acquired stakes, and greater use of external financing (e.g LLCPIPEs) have contributed to the larger deal size.
The aggregate ratio of target enterprise value at merger announcement to associated SPAC capital has been 7x this year, a jump from 6x in 2020 and just 3x during the 2010s.
The average time shortened to 366 days for 2020 announcements and just 175 days thus far in 2021.