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Opinion
Chris Bryant

Sorry Folks, the SPAC Party’s Over

With lots of SPACs now selling for less than their cash holdings, the tidal wave of money that’s propped them up may soon become a trickle.

Last week Chamath Palihapitiya offloaded shares worth $213 million of Richard Branson's Virgin Galactic Holdings Inc.

Last week Chamath Palihapitiya offloaded shares worth $213 million of Richard Branson's Virgin Galactic Holdings Inc.

Photographer: Michael Nagle/Bloomberg

Rising bond yields have been unkind to growth stocks. Their impact on the special purpose acquisition companies has been downright cruel. The SPAC boom has become the Spacpocalypse. Nobody should be surprised.

SPACs are listed cash-shells that merge with private businesses in order to take them public. They’ve become the dominant way for a company to raise equity finance in the U.S. — well over 200 new blank-check companies have raised a mind-boggling $70 billion so far this year, according to data compiled by Bloomberg.