London Looks to Un-Meme the SPAC Market

a fund that tracks the shares of De-SPACs, or former SPACs, has lost two thirds of its value in a year.

But top European De-SPACs have done noticeably better than their American counterparts, falling only about a third. Those few that trade in London and Amsterdam also have outperformed those listed in New York since the day of their merger. London hosts more “old economy” De-SPACs, like National World—publisher of regional newspapers The Yorkshire Post and The Scotsman—and boutique wealth manager Oberon; the flashier British startups, like electric-vehicle maker Arrival, choose the U.S.

There are other reasons why SPACs have crossed the Atlantic. Until last year, the U.K. applied some draconian rules to the vehicles, such as the assumption that trading in their shares would be suspended after a deal announcement. As these were eased, activity surged. Meanwhile, the Securities and Exchange Commission is moving to narrow the gap in oversight between traditional IPOs and U.S.-listed SPACs, which is also reducing the space for trans-Atlantic arbitrage.

It still isn’t clear whether SPACs can remain popular once scrutiny increases. Yes, firms establish direct connections with knowledgeable sponsors who focus on growing the business, as opposed to spending months on IPO roadshows. But today’s situation shows that the much-touted “early price discovery” through merger talks provides little security against adverse markets.Europe, and particularly London, may provide a clue to SPACs’ future.

United Kingdom United Kingdom Latest News, United Kingdom United Kingdom Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Twitter whistleblower testimony, consumer price index, Oracle earnings top week aheadFOX Business takes a look at the upcoming events that are likely to move financial markets in the coming days, including some big matters for Twitter. “Every statue and street building has been renamed, every date has been altered. And the process is continuing day by day and minute by minute. History has stopped. Nothing exists except an endless present in which the Party is always right.” - George Orwell, 1984
Source: FoxBusiness - 🏆 458. / 53 Read more »

Wall Street's favorite value stocks include a media giant that could surge 55%This year's tumble in stocks has led many on Wall Street to look at a previously underappreciated part of the market: value.
Source: CNBC - 🏆 12. / 72 Read more »