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 2022.
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 >
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 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.
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.
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.
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.
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.
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.
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.
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 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.
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.
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 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.
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 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 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.
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.
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.
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