Investors Should Watch for Promising SPAC Mergers in 2021
There was a tectonic shift in U.S. primary markets in 2020 as the money raised through SPACs rivaled the money raised through traditional IPOs. So far, 2021 is looking even better for SPACs and the money they have raised is much higher than that through traditional IPOs. Here are the upcoming SPAC mergers in 2021 and the sectors that SPACs are bullish on.
SPACs are also known as blank-check companies. Those buying a SPAC before the merger announcement are only betting on the sponsor’s ability to find a suitable merger target. However, SPACs have attracted a lot of interest from investors since most of them have generated stellar returns for investors.
Top sectors for SPAC mergers
SPACs have been bullish on tech, green energy, and EV ecosystem companies. Within the tech space, SPACs have been hunting for targets in fintech companies. For example, IPOE has announced a merger with fintech company SoFi, while FUSE has announced a merger with MoneyLion—another fintech company.
EV companies and companies that are part of the EV ecosystem, especially the charging infrastructure companies, have been on SPACs’ radar. SBE, CLII, and TPGY are three SPACs that are set to merge with EV charging companies.
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In 2020, EV companies were the prime target for SPACs. Fisker, Canoo, Nikola, and Lordstown Motors listed through the SPAC route. Electric bus startup Arrival also announced a reverse merger with CIIG, which is expected to close in 2021.
Recent SPAC merger announcements continue to trade well, with average return since IPO of +46% for the 19 deals that announced in the past two weeks
h/t RBC
— The SPAC King (@JulianKlymochko) February 20, 2021
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The surge in Churchill Capital IV (CCIV) SPAC stock on the rumors of its merger with EV startup Lucid Motors is an indication of how bullish investors are in the EV industry. At its peak, CCIV stock was trading at a premium of over 500 percent from its IPO price. However, the SPAC stock fell sharply after the merger was announced.
