SPACs are not a shortcut to IPO

I was reading an article by the CEO of European Tech company mentioning that a US listing was necessary due to a lack of capital in Europe. The company is now considering doing so through a #SPAC in the US.

I still don't understand why a promising company would want to rush into the SPAC trap, and on a foreign market at that.

Thanks to our summer intern Julian Alme for compiling the statistics on European companies that chose to list via a SPAC (the IPO's back door) in the US.

Looking back, 42 European companies merged with a US SPAC since 2020. Average return of -53%, and 1 out of 3 went bankrupt. Hardly a sign of sticky capital - or perhaps of issuers rushing into a premature listing sold on the false promises of the SPAC acquirer.

Another 8 companies (16% of announced deals) eventually canceled the business combination — in other words, SPACs do not guarantee a higher chance of listing than a standard IPO.

Issuers should look at facts- and carefully consider the best conditions to become a public company.