As SPACs have grown over the last decade – culminating in 2020’s record number of 248 SPAC IPOs – return on investments have been mixed for the acquiring shell companies. New data shows how the growing number of SPAC IPOs over the last few years has roughly correlated with increased returns on investment.
In data collected by the Warrington College of Business at the University of Florida, the average initial return on investment for SPAC IPOs reached a 14-year high in 2020 at 1.6 percent. That correlates positively with the record number of SPAC IPOs on the year, with the last few years also showing slight upticks in average initial returns for more SPAC IPOs. The previous years of SPAC IPOs dating back to 2003 have seen more mixed results, with a high of over 3 percent average initial return in 2006 contrasted with the decline of roughly 1.5 percent in 2010.