Special Purpose Acquisition Company litigation activity has risen fast on the heels of record SPAC initial public offerings in 2020. This upward trend likely will continue well into 2021 for two reasons: SPACs are the current preferred means by which companies go public; and the SPAC process itself may be creating fertile ground for initiating litigation.
After increasing throughout 2020, SPAC IPOs outnumbered traditional IPOs 129 to 86 in the fourth quarter. That trend accelerated in January, with SPAC IPOs dominating traditional IPOs 3 to 1.
Like the deals themselves, both pre- and post-merger SPAC litigation rose in 2020 ...