Report: The IPO SPAC-Tacle

The IPO market slammed shut in the first part of 2020 as pandemic uncertainty set in, only to open up with gusto in 2H even as risks around the virus and its economic impact remained high. This surprising strength following years of tepid IPO markets, as well as lofty valuations for newly public companies, have led to fears of an IPO “bubble”, especially in tech. Adding to these concerns has been a surge in IPOs via Special Purpose Acquisition Companies (SPACs)—public investment vehicles created to merge with a company, thereby bringing it public—which comprised over half of US IPOs in 2020.

With these trends continuing into 2021, whether they’re sustainable, and the implications for companies and investors, is Top of Mind. Goldman Sachs Research asked experts for their answer, including our own capital markets/SPAC experts, David Ludwig and Olympia McNerney, University of Florida’s Jay Ritter and Stanford Law School’s Michael Klausner.