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Chris Bryant

Goldman Sachs Is Right to Warn About SPACs

Blank-check companies were already looking frothy last year, but things have gotten even crazier in January.

Party pooper.

Party pooper.

Photo: Bloomberg

Sorry kids, dad showed up at the party and he says you’re having too much fun. That was my initial reaction when David Solomon, the boss of Goldman Sachs Group Inc., warned that the boom in equity issuance by special purpose acquisition companies (SPACs) isn’t sustainable.

“There will be something that will in some way, shape or form bring the activity levels down over a period of time,” Solomon said on an earnings call Tuesday, without saying what that thing might be. “Like many innovations there is a point in time as they start where they have a tendency maybe to go a little bit too far and they need to be pulled back or rebalanced in some way.”