The shell business is viewed with increasing skepticism on Wall Street.
Image: AP
The euphoria about stock exchange shells is over. For many of them, time is running out to find merger partners – and a wave of liquidations is looming.
Bill Ackman doesn’t like to settle for daubs when he can dabble. Accordingly, the well-known American hedge fund manager also went to great lengths when he joined a new trend in the financial sector a good two years ago. So-called spacs, i.e. stock exchange shells, were rapidly gaining popularity, and Ackman wanted to be part of it. He floated a spac, and not just any one, but the largest to date, with proceeds of $4 billion. But he should fail with the mission all Spacs are pursuing.
These “Special Purpose Acquisition Companies” have the purpose of buying a company and then allowing it to list on the stock exchange, and they typically have 24 months to do so. If they don’t find a merger partner by then, they have to return the invested money to their investors and will be dissolved.