So what about the SPAC trend?
Posted: Sat Feb 08, 2025 9:58 am
According to SPAC Research, SPACs are on the rise. In 2013, there were 10 SPACs with approximately $144.7 million in assets. More recent data shows that nearly 200 SPACs went public in 2020, raising more than $70 billion , almost matching the performance of IPOs in 2020. Consider the following examples:
In September, real estate technology company Opendoor (OPEN) announced its intention to go public through a merger with Social Capital Hedosophia II, a SPAC managed by Chamath Palihapitiya. It became a public company and debuted on the market in December. Opendoor raised about $1 billion in cash from the transaction.
Richard Branson's Virgin Galactic (SPCE) merged with Palihapitiya's spain mobile database SPAC in late 2019, taking the company public and giving it a $2.3 billion market cap. Virgin Galactic shares are up 45% since the listing.
Nikola (NKLA) was one of the first high-profile electric vehicle companies to go public via a SPAC. It merged with VectoIQ Acquisition Corp, which is backed by ValueAct and Fidelity. The merger boosted the company’s valuation to nearly $28.8 billion, despite the revenue shortfall.
DraftKings (DKNG) was founded as a fantasy sports company in 2011. It merged with Diamond Eagle Acquisition Corp, giving the sports betting company a valuation of $2.7 billion. The company went public in April with an initial share price of $17, which rose to $52.11 a few months later.
A new type of SPAC
Bill Ackman, the hedge fund activist at Pershing Square, launched a unique $4 billion SPAC in July 2020. The price per share was $20, up from the usual $10 — but his gain was 0%. In one fell swoop, it eliminated the risk of shareholder dilution, while also removing the founders’ incentive to get the deal done before the deadline.
In September, real estate technology company Opendoor (OPEN) announced its intention to go public through a merger with Social Capital Hedosophia II, a SPAC managed by Chamath Palihapitiya. It became a public company and debuted on the market in December. Opendoor raised about $1 billion in cash from the transaction.
Richard Branson's Virgin Galactic (SPCE) merged with Palihapitiya's spain mobile database SPAC in late 2019, taking the company public and giving it a $2.3 billion market cap. Virgin Galactic shares are up 45% since the listing.
Nikola (NKLA) was one of the first high-profile electric vehicle companies to go public via a SPAC. It merged with VectoIQ Acquisition Corp, which is backed by ValueAct and Fidelity. The merger boosted the company’s valuation to nearly $28.8 billion, despite the revenue shortfall.
DraftKings (DKNG) was founded as a fantasy sports company in 2011. It merged with Diamond Eagle Acquisition Corp, giving the sports betting company a valuation of $2.7 billion. The company went public in April with an initial share price of $17, which rose to $52.11 a few months later.
A new type of SPAC
Bill Ackman, the hedge fund activist at Pershing Square, launched a unique $4 billion SPAC in July 2020. The price per share was $20, up from the usual $10 — but his gain was 0%. In one fell swoop, it eliminated the risk of shareholder dilution, while also removing the founders’ incentive to get the deal done before the deadline.