Goldman Sachs Group Inc. said it’s taking a break from handling special-purpose acquisition company , or blank check, initial public offerings amid a sharp slowdown in the market in recent months.
The move comes after the SPAC market has fallen off a cliff in 2022 amid increasing volatility in the stock market as investors grapple with rising inflation and concerns over a potential recession. Read MarketWatch’s “Market Snapshot” column. Meanwhile, the S&P 500 index SPX, +0.83% has dropped 15.0% year to date, after being up 11.5% over the same period a year ago.Citigroup Inc. C, -2.20% led the league tables in 2021 with a 13% share of the SPAC market via 108 SPAC deals that raised a combined $21.7 billion. Goldman Sachs GS, -0.92% raised $15.5 billion in SPAC proceeds last year via 66 SPAC IPOs, followed by $13.8 billion for Cantor Fitzgerald & Co. via 60 deals, Credit Suisse Group AG CS, +1.44% CSGN, -0.19% with $12.
Currently about 80% of the SPACs that have gone public will not result in a merger. Many of the SPAC underwriting fee contracts for investment banks will pay 2% of the deal value to take the company public and 3.5% of the deal if a merger is completed. Sponsors typically put up $8 million to take a SPAC public. If 600 mergers don’t take place, since recently only about 10 mergers have been completed each month, that amounts to about $4.8 billion in equity that sponsors will lose.
GoldmanSachs, you think we have not been watching this whole time? Do you feel safe?
Malaysia Malaysia Latest News, Malaysia Malaysia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: WBUR - 🏆 274. / 63 Read more »