Since 2020, SPACs have been a popular listing mechanism in the US for emerging tech companies that require large amounts of operating capital. This year, blank-check firms have raised a record US$103 billion so far, according to SPAC Research in May. This is despite around 40% of US-listed SPACs that have completed de-SPAC transactions trading below US$10 a share.
The US SEC is now considering guidance to rein in future growth projections for SPACs and even Warren Buffet has said there is too much SPAC capital with a time limit to be deployed, raising pressure for sponsors to settle for sub-par acquisitions.
Regardless, the SGX is expected to move forward with SPAC listings in Singapore from mid-year onwards. What are the risks investors should be aware of? Has the SGX fully considered them?
On the other hand, might the bourse’s focus on risk prevention and protecting retail investors be too restrictive, and will this curb interest in SPAC listings in Singapore? In our first podcast, Professor Mak Yuen Teen, Associate Professor of Accounting, NUS Business School, and David Kuo, co-founder of The Smart Investor, weigh in and share their thoughts with AAM contributor Kang Wan Chern
