The SPAC bubble is bursting, according to Charles-Henry Monchau, CIO at Zyz: With monetary policies tightening, speculative bubbles are bursting one after the other. SPACs are no exception.
Google Maps
The $100 million deli that was highlighted in famed investor David Einhorn s letter to clients earlier this month is actually seeking to strike a deal.
A Hong Kong-based firm that is invested in Hometown International views the company as a mini-SPAC, seeking a merger worth up to $600 million.
The multibillion-dollar endowments of Duke and Vanderbilt also own a slice of the deli, according to a Financial Times report.
.
According to a Financial Times report, the deli s parent company Hometown International is actually a mini- SPAC that is ultimately seeking to make a deal that could be worth up to $600 million while it slings Philly cheesesteaks from its single New Jersey-based location.
SPAC short-sellers were up over $500 million in mark-to-market profits over 30 days.
The increasing profits came amid a steep decline in SPAC market sentiment and performance.
S3 Partners shared the 10 most profitable wagers as skeptics sold short another $265 million shares.
Short-sellers are descending on the SPAC market and making a killing out of it.
Investors betting against these so-called blank-check companies were up more than $500 million, or 16.92%, in net-of-financing mark-to-market profits in the 30 days through April 22, said a Thursday research note by Ihor Dusaniwsky, the managing director of predictive analytics at S3 Partners.
The increasing dollar value of bearish bets is in line with a downward sentiment shift in the SPAC market, which started showing cracks in early March when skeptics tripled their bets against SPACs to $2.7 billion from $724 million at the start of the year.
April 3, 2021
SPACs have so dominated Wall Street thinking this year that they are now the stuff of memes and ironic t-shirts.
Thanks to their burst in popularity with celebrity and retail investors alike, more than half of companies that went public last year happened through a SPAC. But the promise of these unconventional investment vehicles of bigger, more efficient returns on a shorter timeline than traditional IPOs may be starting to fall short.
Also termed blank-check companies, SPACs are shell companies that take private firms public by raising money on an exchange and then merging with or acquiring them to take their place on the exchange. It’s a back door for private firms to go public without bothering with the tedious IPO or direct listing process. Recent data on the trajectory of SPAC acquisitions show a strong run-up in the number and size of those deals last year, followed by a steep one-month drop-off in March. The number of deals fell more than 50% between Februa