Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.

Future SPACs to watch

Special-purpose acquisition companies (SPACs) are the latest buzz on the stock market. These blank-check companies offer an alternative method to the traditional IPO process when a private company opts to float its shares on a stock exchange. Discover our list of future SPACs that are in the pipeline to merge with targeted companies at some point in 2021.

See inside our platform

Get tight spreads, no hidden fees and access to 11,000 instruments.

Why trade on future SPACs with CMC Markets?

  • Tight share spreads from 0.10pts
  • Low commission fees when trading CFDs
  • Margin rates starting at 20% (leverage ratio of 5:1)
  • No foreign exchange fees to pay
  • Spread betting is tax-free in the UK*

What trading opportunities do SPACs present?

SPACs may appeal to investors for a number of reasons. The SPAC trend has risen in the stock market over the past few years, even overtaking the number of IPOs that were listed in 2020. This is perhaps helped by the fact that many SPACs are formed by prominent market players or CEOs of large companies, which adds an element of knowledge and expertise to the process. Investors may therefore feel more comfortable or confident in their decision to trade on a specific SPAC. These types of shell companies also tend to list quicker on an exchange in comparison to a traditional IPO, and once the intended merger company is announced, the SPAC displays the clear value of the target company such as market capitalisation and share price before actually completing the merger.

Read more about special-purpose acquisition companies​ >

SPAC 'king' Chamath Palihapitiya with Richard Branson at Virgin Galactic's listing on the NYSE in 2019

List of future SPACs

Social Capital Hedosophia Holdings (IPOD and IPOF)

This holdings company is a partnership between the founder of Social Capital, Chamath Palihapitiya, and the CEO of Hedosophia, Ian Osborne. The goal of the remaining SPACs IV and VI is to target businesses operating in the technology industries. The first three SPACs of the Social Capital series took companies such as Virgin Galactic, Opendoor and Clover Health public, indicating a successful partnership.

Dune Acquisition Corp (DUNE)

Dune Acquisition only went public on the NASDAQ in February 2021, making it a relatively new SPAC. It managed to raise $150m of private equity at the time of debut. The blank-check company intends to target companies within the SaaS (software as a service) sector, which is an increasingly expanding industry of private and start-up companies.

Social Capital Suvretta Holdings Corp

These four SPACs are the latest filings of Chamath Palihapitiya, who is widely credited for being the ‘king of SPACs’. The blank-check companies I, II, III and IV will focus on the biotech sector, each with a different area of focus: immunology, neurology, oncology and organs. He aims to raise at least $200m per SPAC, which are not yet available on the stock market.

Apollo Strategic Growth Capital (APSG)

APSG is the first SPAC vehicle to be administered by Apollo Global Management, an institutional investment company whose clients mainly come from the public pension, finance, insurance and government sectors. The SPAC seeks a growth-oriented market leading company with strong business fundamentals. It aims to create long-term shareholder value.

Reinvent Technology Partners Y (RTPY)

Whereas Reinvent Technology Partners Z has already announced a merger with home insurance company Hippo, Y is still on the market and searching. The SPAC is led by a number of well-known names, such as Reid Hoffman (co-founder of LinkedIn) and Mark Pincus (founder and chairman of Zynga). It is reportedly targeting companies in a tech sector or sub-sector, including ecommerce, payments, gaming, SaaS, AI and autonomous vehicles.

Ares Acquisition Corporation (AAC)

This shell company is affiliated with Ares Management Corporation, a global investment manager that focuses on investors across the credit, private equity and real estate markets. AAC does not have a specific industry in mind but is excluding companies within the fossil fuel industry, including upstream, midstream and energy services sub-sectors.

Burgundy Technology Acquisition Corp (BTAQ)

This SPAC is led by the former CEO of HP and SAP, Leo Apotheker, who helped to transform the companies into multi-solution tech platforms. Burgundy is said to be targeting the technology and enterprise software markets in the US, Israel and Europe. This could present the opportunity for an exciting merger, with speculation of eToro or Taboola being in the running.

SVF Investment Corp (SVFA, SVFB and SVFC)

These three SPACs were formed in close partnership with SoftBank Investment Advisors, which is an investment manager to the SoftBank Vision Funds. These seek to target technology companies that operate in a large and growing market with next-generation technology and solid management teams. Previous companies that SVF have helped to take public include DoorDash, Slack and Uber.

Trade on future SPACs and mergers

SPAC mergers

Churchill Capital Corp IV (CCIV)

This SPAC is on schedule to take Lucid Motors public through a reverse takeover. Lucid Motors is a US electric vehicle company that could rival the likes of Tesla and NIO. The merger is expected to complete in the second quarter of 2021, but you can gain exposure to both companies by trading on CCIV stock now.

VG Acquisition Corp (VGAC)

VG Acquisition Corp is run by Richard Branson’s Virgin Group. This SPAC has gained a lot of investor attention due to the success of Virgin Galactic’s own SPAC merger in 2019. It announced that it would be taking 23andMe public, a genomics and biotechnology company that specialises in DNA and ancestry testing, with an expected valuation of around $3.5bn.

Pershing Square Tontine Holdings (PSTH)

Owned by US investor and hedge fund manager Bill Ackman, PSTH announced at the start of June its decision to acquire a 10% stake in Universal Music Group. This meets the SPAC’s criteria of a high-quality, large-cap growth company. Vivendi, UMG’s parent company, is planning on listing UMG separately, so shareholders of this SPAC will gain exposure to this stock once the merger is complete.

Khosla Ventures Acquisition Co. II (KVSB)

Nextdoor, the social networking platform for connecting residents of the same neighbourhood, has settled on a merger with Khosla Ventures' second blank-check company. Nextdoor has apparently reached 1 out of 4 neighbourhoods in the US and the company plans to raise up to $700m in proceeds. Early investors include venture capital firms such as Tiger Global and Hedosophia.

Soaring Eagle Acquisition Corp (SRNG)

Soaring Eagle is the company behind the SPACs that took companies like DraftKings and Skillz public on the stock market, so their seventh SPAC merger was eagerly awaited by investors. In May 2021, Soaring Eagle announced a business combination with Ginkgo Bioworks, a genetic engineering company and cell programming platform founded by scientists of MIT, that will result in the company going public.

VPC Impact Acquisition Holdings III (VPCC)

This shell company has announced a merger with US leading banking app Dave, which could value the company at around $4bn. The app reportedly helps over 10m customers with banking, financial insights, overdraft protection and building credit. SPAC sponsors include Victory Park Capital and Tiger Global Management.

AJAX I (AJAX)

AJAX originally announced its intention to acquire a high-quality company within the internet, software, fintech or consumer sectors. The SPAC is on track to merge with the UK’s leading online car retailer, Cazoo, in a $7bn business deal that will list the company on the New York Stock Exchange later in 2021. It has a leading management team with CEOs and former employees of 23andMe, Square, Chipotle and Goldman Sachs.

BowX Acquisition Corp (BOWX)

BowX is a newly-organised blank check company that initially focused its search on target companies within the technology, media and telecommunications industries. It intends to take WeWork public on the stock market two years after the company failed, which is expected to go ahead in Q3 of 2021. WeWork should receive funding from institutional investors such as Fidelity and BlackRock, as well as cash raised in BowX’s original IPO.

Cerberus Telecom Acquisition Corp (CTAC)

Backed by private equity company Cerberus Capital Management, this SPAC has announced a merger with KORE, a wireless network data company specialising in Internet of Things (IoT) solutions. This deal should bring the merged company around $484m in cash proceeds for an overall valuation of $1.01bn.

Electric vehicle manufacturer Lucid Motors is due to merge with blank-check company Churchill Capital Corp IV (CCIV) in 2021

How to trade future SPACs and SPAC mergers

  1. Open a live account. You will be able to spread bet or trade CFDs on SPAC stock that is already public on the stock market.
  2. Keep up to date with market news. Blank-check companies will announce when they are due to IPO and when they have found a target company to merge with.
  3. Decide on a trading strategy. Take a long position (buy) if you think that the SPAC and its subsequent merged company will rise in value, or take a short position (sell) if you think that its value will decrease.
  4. Manage your risk by using controls such as stop-losses. SPACs can be a volatile investment and trends can decline steeply at any point. Read our in-depth guide to money and risk-management.

FAQS

What is a SPAC merger?

A SPAC merger is when a blank-check company chooses a privately-held company to take public on the stock market, as an alternative to the traditional IPO process. This then becomes one company and takes on the stock ticker and name of the target company. Read more about the SPAC process.

How can I trade on SPACs?

To start trading on SPACs, open a trading account. You can then spread bet or trade CFDs on its price movements within the stock market, depending on whether you think its price will rise or fall.

Are all SPACs publicly traded?

SPACs must undergo the traditional IPO process themselves before they can be listed on a stock exchange and traded by the public. Read more about initial public offerings.

How much does it cost to sponsor a SPAC?

In terms of costs, SPACs usually come with a 2% underwriter fee and an additional 3.5% at completion. Examples of SPAC sponsors include private equity and investment management firms, including BlackRock, Fidelity and Tiger Global Management.

Are SPACs overvalued?

There has been a rising trend for SPACs over the past few years, even overtaking traditional IPOs in the number of listings. We cannot predict whether this trend will continue in the future but the heavy interest in SPAC mergers is going strong. Learn more about these types of blank-check companies.

*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.

Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.