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Shuli Ren

Hong Kong Needs More Unicorns So It Has to Join the SPAC Race

The blank check companies could increase the hot IPOs available to investors so the throngs don’t all go chasing a small number of good deals.

Lost in SPACs.

Lost in SPACs.

Photographer: KARL-JOSEF HILDENBRAND/DPA

New York is the place where more startups — from EV battery makers to flying cars — have gone public by way of the boom in SPACs, or special purpose acquisition companies. Once listed, SPACs are on the lookout to place their vast sums in promising enterprises (which then don’t have to go through the complex initial public offering process). At the current rate, the world’s new generation of unicorns will all be listed in New York via SPACs. The city is once again the IPO center of the world.  

This gush of funding is putting pressure on rival stock exchanges from London and Singapore to Hong Kong to rewrite their listing rules to attract the so-called “blank check” companies. London’s tough regulations, for example, may allow Amsterdam to become Europe’s SPAC center, according to my colleague Chris Hughes. Already there are plans to make Britain more competitive. Here in Hong Kong, the question is: should the markets jump into the SPAC race?