Investor interest in special purpose acquisition company (SPAC) deals appears to be cooling off.
After more than 100 new SPAC deals in March, issuance is nearly at a standstill with just 10 SPACs undertaken so far in April, according to data from SPAC Research.
The slowdown comes after the U.S. Securities and Exchange Commission (SEC) has started scrutinizing SPAC deals and the financials of the companies involved in the reverse mergers. More than 90% of SPACs have been audited by just two accounting firms over the past six years, according to SPAC Research.
Many SPAC stocks are falling because of the increased regulator scrutiny. Collectively, SPAC stocks are down 20% year-to-date after making their market debut, according to SPAC Research.
Signs have also emerged that retail investors might be having second thoughts about SPACs. Bank of America’s (NYSE:BAC) client flows showed that retail SPAC buying slowed significantly in April.
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