ANALYSIS: Trad IPOs Hold Lead Over SPACs; Direct Listings Rise

The halcyon days for SPACs may be receding. Traditional IPOs continued the market leadership that they re-established over special purpose acquisition companies in the second quarter. Even more concerning for SPACs are a market pivoting toward value over risk and a great many existential challenges owing to the current SPAC glut and dearth of suitable target companies. There is a growing prospect that a high percentage of SPACs will fail.

Indeed, experts such as blank-check sponsor Betsy Cohen predict a 30% SPAC failure rate, while University of Florida finance professor Josh Ritter believes half of SPACs may liquidate after ...