SPAC Craze Goes Bust, Burning Investors as Once Hot Deals Sour
• SPACs (special purpose acquisition companies) were a popular but risky way for companies to go public in recent years, resulting in many failed deals and lost money for investors.
• Many high-profile companies like WeWork, Arrival, and BuzzFeed went public via SPACs, initially attracting billions in investments, but ultimately performed poorly or went bankrupt.
• The SPAC boom was fueled by easy money and speculative fervor, but collapsed as interest rates rose and money became tighter.
• Donald Trump's social media company Truth Social attempted to go public via a SPAC merger, but the deal has faced ongoing obstacles and investigations.
• The SEC implemented new regulations around SPACs, but too late to protect investors already caught up in failed deals, pointing to the need for quicker action on emerging risky investment trends.