Hot SPAC Market Confronts Chilly SEC Rule Change

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Honeypot Field to Catch Bots
Honeypot Field to Catch Bots
04/13/2021

Author: Craig Clay

SPAC records were crushed in Q-1 by count and value with roughly $88B raised from 298 SPACs, more than all of last year’s record volume. With the news today of a potential change in accounting for some SPACs recommended by the SEC – what will happen to the robust pipeline of more than 260 SPACs looking to make their debut?

While details of the change are not fully known, for the hundreds of currently active SPACs - expect amendments as they may need to refile their restated financial statements. Donnelley Financial Solutions (DFIN) has the technology and regulatory expertise to help your deal team pivot and execute when the market or SEC dictates. The SEC continues to comment about SPACs from warnings about celebrity deals to questioning bullish financial projections.

Today’s SEC comments provides guidance on warrants, potentially shifting them from equity to liabilities on a SPAC's balance sheet. Another example that all eyes are on SPACs and keeping them in check means they will remain a viable option for private companies to go public.

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