It’s been a brutal start to the year for companies bold enough to go public through SPAC mergers, but in that sea of red, a space-exploration company stands out as a raging success.
(Bloomberg) — It’s been a brutal start to the year for companies bold enough to go public through SPAC mergers, but in that sea of red, a space-exploration company stands out as a raging success.
Intuitive Machines Inc., which debuted earlier this week at $10, is up roughly 230% to more than $33 after surging as much as 209% on Thursday, triggering at least five halts Thursday. The Houston-based firm is the top performing de-SPAC to start trading this year.
While 2023 is only about six weeks old, it has resulted in more than a dozen new companies that merged with blank checks. As companies and SPAC sponsors push deals through, the newly public companies have mostly spiraled. The median stock is down more than 40%, and two have already wiped out more than 80% of their value in a handful of sessions.
The strong debut for Intuitive Machines may prove to be a head-fake. The company is among the many de-SPACs to see the vast majority of shareholders opt to swap their stock for their cash back, leaving a smaller pool of shares available to trade and giving Intuitive Machines far less cash than initially anticipated. Roughly 83% of shares held by public shareholders were redeemed when the deal was approved.
The once-hot SPAC industry has dried up amid a crackdown by regulators and as a glut of sponsors shut down and return cash to investors.
A record 142 sponsors call it quits and close up shop last year, while 57 had deals collapse as markets spiraled, according to data from SPAC Research.
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