One of the biggest words for investors in 2021 was SPACs. While special purpose acquisition companies have been around for years, 2021 became the year that they took over the market in terms of IPOs and as a topic of conversation.
There were over 600 new SPACs that went public in 2021 and over 150 deals that were announced last year. Here’s a look at what could be ahead for SPACs in 2022 from two well respected names in the SPAC coverage sector.
The SPAC Experts: Benzinga talked 2021 SPAC deals and news items with Julian Klymochko, founder and CEO of Accelerate, and Nick Gershenhorn from SpacTrack.IO, a leading SPAC data and insights website.
SPAC Offerings: Despite over 600 new SPAC offerings in 2021 and a list of hundreds of SPACs looking for deal partners going forward, new offerings might continue to ramp up.
“Looks like the brisk pace of issuance will continue in 2022,” Klymochko said.
Gershenhorn sees the number of offerings in 2022 coming in near the record number set in 2021.
“I think we continue to see roughly the same pace, but slightly lower than the fourth quarter of 2021,” he said. Regulatory oversight into SPACs could significantly reduce the number of SPAC offerings in the future, he said.
Sectors to Watch: Among the most common sectors for SPAC deals in 2021 were electric vehicles, eVTOLs, sports betting and space travel.
While those could be sectors that see numerous 2022 SPAC deals, Klymochko thinks another sector will see a lot of deals in 2022. “Crypto and NFTs,” he noted.
Gershenhorn sees the trend of sports and gaming companies going public via SPAC merger continuing in 2022. Blockchain is highlighted as a sector that could see an increasing number of SPAC deals this year.
Related Link: Exclusive: Accelerate CEO On SPAC Arbitrage, Why You Can'ts Always Bet On SPAC Sponsor
SPACs to Watch 2022: SPACs from several high profile sponsors are among the companies that Klymochko is closely watching in 2022.
“Looking forward to deal announcements from Churchill Capital and Social Capital,” Klymochko said referencing Churchill Capital Corp VII CVII, Churchill Capital Corp VI CCVI, Churchill Capital Corp V CCV, Social Capital Hedosophia Holdings Corp IV IPOD and Social Capital Hedosophia Holdings Corp VI IPOF.
An IPO from Panera Brands that will be backed by the SPAC USHG Acquisition Corp HUGS is highlighted by Gershenhorn as one to watch in 2022. HUGS shares have traded over $10 since the deal was announced.
Gershenhorn also highlighted mergers between Highland Transcend Partners I Corp HTPA, Packable, B. Riley Principal 150 Merger Corp BRPM, FaZe Clan and Aurora Acquisition Corp AURC and Better.com as ones to watch closely in 2022.
Hottest SPAC Prediction for 2022: The SPAC experts were asked for a hot take to start the new trading year.
“The market will reach 1,000 SPACs outstanding (up from 694 currently),” Klymochko said.
Gershenhorn's hottest SPAC prediction for 2022 is popular NFT collection Bored Ape Yacht Club going public via SPAC merger. He said shareholders that don’t redeem their SPAC shares could be rewarded with an NFT airdrop.
“I predict we see more corporate carve-outs and other more creative deal structures like the HUGS/Panera deal, assuming this passes regulatory muster,” Gershenhorn said.
Disclosure: Author is long shares IPOD and IPOF.
Also See: EXCLUSIVE: SPACs Attack In 2021 — The Best Deals And Biggest News Items From A Breakout Year
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