SPACs in 2023: The Evolving Market, Structure, and Post-DeSPAC Landscape, and a Look Toward the Future

SPACs were all the rage in 2020 and 2021, with hundreds of SPAC IPOs and De-SPAC transactions raising billions of dollars. In 2022, however, there was a sharp decrease in IPOs, and it became more difficult for existing SPACs to successfully close De-SPAC transactions. This was driven by the overall cooling of the IPO and other new issuance markets, post De-SPAC and post-IPO performance of many companies that went public in 2020 and 2021 being significantly below expectations, and the specter of SEC regulation stemming for rules proposed in the spring of 2022. 2023 has seen a continued slowdown in both SPAC IPOs and De-SPAC transactions, as there has yet to be a market rebound, and the SEC has not yet adopted any of the proposed rules. As a result, SPACs are continuing to face challenges in identifying and closing De-SPAC transactions, and new sponsors are reluctant to raise new SPACs. In this program, we will review:

• the basic structure of SPACs and why they have been popular go-public vehicles

• the structural evolution of SPACs since their initial resurgence in the early 2000s

• the SPAC IPO and De-SPAC market during the 2020-21 boom

• proposed SEC rules and their impact on market participants

• litigation stemming from De-SPAC transactions, both in federal and state courts

• continuing structural changes to address market conditions

• the future for SPACs in 2023 and beyond.
  

Learning Objectives:

1. Review SPAC structures and the reasons why they continue to evolve

2. Examine the impact of the market developments in 2022 and 2023 on SPAC IPOs and De-SPAC transactions

3. Gain familiarity with the proposed SEC rules and how the market has adapted since they were proposed

4. Discuss the claims being made in SPAC-related litigation and how certain structures and behavior may impact defenses

5. Gain insight into potential strategies and changes for successful SPACs in 2023 and beyond