A total of 57 special purpose acquisition companies began trading in October, the highest amount since March when a record of 109 SPACs were issued, according to CNBC calculations. The number of new deals in October nearly doubled that in September and was also higher than the total during the same time last year, the data showed.The rebound came as a backlog of blank-check deals held up by accounting and other regulatory issues rushed to the market before the year ends.
"That was a hiccup, but once the rules of the road were established, that was taken care of pretty quickly by accounting firms and law firms," said Perrie Weiner, partner at Baker McKenzie LLP. SEC Chairman Gary Gensler has repeatedly warned of the misaligned interests between sponsors and shareholders and said greater disclosure is needed. Gensler said in June that the agency planned to propose rule changes.
"The SEC's focus is on transparency, on conflicts of interest and on concerns of share dilution," Weiner said. "I think that once the SEC gets comfortable and investors are going in eyes open, it will become just like any other widely accepted financing structure. It's definitely here to stay.", which tracks the 50 largest U.S.-based pre-merger blank-check deals by market cap, is still down about 3% on the year.
Meanwhile, SPAC redemptions have been climbing amid waning investor appetite. The average SPAC redemption ratio — the percentage of shares that investors redeem prior to closing of an acquisition — has risen in the last two quarters, after falling to all-time lows in the first quarter, according to Barclays.
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