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Will SPACs Make a Comeback in 2022?

By Matthew Frankel, CFP® and Jason Moser – Dec 31, 2021 at 1:33AM

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2021 started off as the year of the SPAC, but the boom has fizzled out.

In early 2021, dozens of new special purpose acquisition companies, or SPACs, were going public every single week. The SPAC boom certainly faded as the year went on, but what about 2022 and beyond? In this Fool Live video clip, recorded on Dec. 13, contributor Matt Frankel and Industry Focus host Jason Moser discuss whether we could see a resurgence in SPAC activity in the New Year. 

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Matt Frankel: No. 4 is that SPACs will make a comeback. I'm not saying that we're going to see early 2021 happen again. I think one of the shows we did, there was something like 12 SPACs that went public that day.

Jason Moser: Probably. We did that whole series. We did four shows, just a series of SPACs.

Matt Frankel: I think each show I gave the statistics on how many went public that week, and it was like in the 40s and 50s certain weeks. I don't think we're going to see that again. But what I do think is we are going to see a wave of more prominent companies go public by SPAC again. We're going to see some more high-profile sponsors decide to get back into the SPAC game. Some of these companies that were issuing one, two, and three SPACs or whatever in 2021, Virgin, for example, to have pumped the brakes and haven't put out any new blank-check companies. Virgin took public 23andMe (ME 1.33%), and they just announced their second one it's taken public, the Grove Collaborative. It's an organic foods company, I believe.

Jason Moser: Yeah.

Matt Frankel: But they hadn't put out once since the second one, which was in the middle of the year. I could see these companies that are finally starting to get their SPACs worked through the process getting back into it and I think, early 2022, you're not necessarily going to see what we saw last year, but you're going to see a resurgence in the SPAC boom.

Jason Moser: Yeah. We just saw Harley-Davidson (HOG 2.21%). They are going to spin out their electric bike business LiveWire. That's going to go public in 2022 via SPAC. I think you're right. I think we're going to continue to see it. Maybe not the same headline news that we saw through 2021, but it does give businesses a chance to go public earlier, and not to say that every one of those businesses is a good one, but there are some good businesses that come from this and keep that in mind.

Jason Moser has no position in any of the stocks mentioned. Matthew Frankel, CFP® owns 23andMe Holding Co. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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