SPACs Are a Pretty Wild Party for Wall Street's Finest
The SEC is right to look at the involvement of investment banks in the SPAC frenzy. There’s not enough transparency.
Celebration time.
Few of Wall Street’s parties have ever been quite this exuberant.
Since the pandemic struck, investment banks have been earning billions of dollars from a surge in stock-market listings of special purpose acquisition companies (SPACs). What for decades was a relatively small area of finance — using listed blank-check companies to acquire promising businesses and thereby take them public — has exploded. The amount raised in north America by these vehicles this year has risen to $92 billion, driving the market for initial public offerings to new records. Investment banks have been drinking freely from this punch bowl of easy money.