Several blank check companies face the risk of liquidation and may have to return capital to investors as the SPAC acquisition activity drought continues into 2023. Per Pitchbook, out of the 791 blank check companies that were listed in 2021, only 467 have been able to acquire target companies so far. Per SEC rules, SPACs have a timeline of two years — which may be extended by one year — to acquire a target business, failing which they have to return the capital to investors.
- After evaluating the number of SPACs established in 2020 and 2021, Pitchbook estimates that several are fast approaching their deadlines and are at risk of liquidation.
- SPAC listings have been hit hard by rising interest rates, heightened inflation, and geopolitical concerns, causing their valuations to slump by 78.4% since March 2021.
- Several target companies are choosing to stay private rather than merge with SPACs.
- Between the start of December 2022 and the end of January 2023, nearly 100 SPACs have been liquidated.
- Concord Acquisition Corp. shuttered in December after it failed to acquire target company Circle in a deal valued at $9B.
