It took just 10 months for Quanergy Systems Inc., a maker of high-tech sensors and software, to go from public offering to bankruptcy. Fast Radius Inc., a 3D printing company, made it to nine months. Online retail startup Enjoy Technology Inc. took eight and a half months before submitting its application.
What they all have in common is the way they made it to market. Instead of selling shares in a traditional IPO, they each merged with a special purpose vehicle. A SPAC is a publicly traded shell company that has no other role than to seek a merger with another company, which then inherits the shell’s public listing. Such deals were a pandemic-era Wall Street fad — but now a growing number of companies that went public this way have gone bankrupt, underscoring just how speculative the SPAC game could be.
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