IPOs

SPAC returns fall short of traditional IPO returns on average

Bill Ackman's Super-SPAC Pershing Square Tontine Holdings (PSTHU) raised $4 billion with great fanfare in the largest SPAC offering of all time. Looking to take a "mature unicorn" public, the blank check company is only the latest milestone in what is already a banner year for SPACs. While the space is rapidly evolving, most SPACs fail to live up to the hype.

Key Takeaways

  • 2015-2020 SPAC IPOs have underperformed post-merger
  • SPAC mergers in 2019-2020 have outperformed those in 2016-2018
  • Larger SPAC mergers have outperformed smaller transactions
  • Healthcare and tech-focused SPACs have outperformed; energy has underperformed


Of the 222 SPACs IPOs since the start of 2015, 89 have completed mergers and taken a company public. Of these, the common shares have delivered an average loss of -18.8% and a median return of -36.1%, compared to the average aftermarket return of 37.2% for traditional IPOs since 2015. Only 26 of the SPACS in this group (29.2%) had positive returns as of Friday's close.

Recent SPAC mergers have outperformed the broader group...

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The article SPAC returns fall short of traditional IPO returns on average originally appeared on IPO investment manager Renaissance Capital's web site renaissancecapital.com.

Investment Disclosure: The information and opinions expressed herein were prepared by Renaissance Capital's research analysts and do not constitute an offer to buy or sell any security. Renaissance Capital's Renaissance IPO ETF (symbol: IPO), Renaissance International ETF (symbol: IPOS), or separately managed institutional accounts may have investments in securities of companies mentioned.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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