Why SPAC Earnings Could Get Even More Volatile
The special-purpose acquisition company (SPAC) boom has ground to a halt over the past month for a number of reasons. Many speculative growth stocks started to sell off aggressively in February as investors shifted toward more value-oriented companies that could benefit from an economic reopening as the pandemic slowly subsides in many regions (while getting worse in others). The number of SPAC initial public offerings (IPOs) has plunged, with just 10 in April so far, according to CNBC. That's down from a record 109 SPACs that went public in March.
Much of the investor consternation appears to stem from a public statement from the SEC earlier this month that proposed a change in how SPACs account for outstanding warrants. If the change is finalized and enacted, it would make the reported financial results of many SPACs even more volatile. Here's what SPAC investors need to know.
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Source Fool.com
