Is this latest merger Spac era’s worst deal?

Is this latest merger Spac era’s worst deal?

Opinion















The abysmal performance of businesses that have gone public by merging with special purpose acquisition companies (SPAC) has emboldened the US Securities and Exchange Commission to beef up investor protections and disclosure requirements.

Spacs were touted as a shortcut to a stock-market listing and a way for retail investors to gain access to promising start-ups. But the hype and haste have often sidetracked due diligence and financial controls. The promise has given way to losses and, in some cases, lawsuits. An index of 25 companies that became public by combining with a Spac has plummeted more than 75% from its peak in February last year.

When financial historians require a poster child for the Spac boom and bust — echoing Pets.com in the dotcom era — they’ll be spoiled for choice, but may end up nominating View Inc. The “smart-window” manufacturer’s disastrous $1.6 billion merger with a Cantor Fitzgerald-backed Spac illustrates why reforms are long overdue. Already reeling from an accounting scandal that blew up within months of the Spac deal closing in March 2021, View warned it risked running out of cash. The shares extended their