The IPO market may remain active in weeks to come despite coronavirus-fueled concerns, thanks mostly to successful deals by special purpose acquisition companies, or SPACs, that have a unique appeal to investors. That’s according to IPO Edge Editor-in-Chief John Jannarone, who joined Cheddar TV late Monday in an interview with Brad Smith. Some 84% of U.S. IPOs completed since the start of April were SPACs, according to data from Dealogic, and several more deals are lined up in coming days.
Jannarone highlighted the success of SPACs that have announced a merger but not yet completed a deal, particularly VectoIQ Acquisition Corp. (unit, stock and warrant tickers: VTIQU, VTIQ, VTIQW), for example, announced a deal to acquire Nikola Corporation, a maker of battery-electric and hydrogen fuel-cell electric vehicles. That company, whose name is a riff on inventor Nikola Tesla, has drawn fanfare from investors who see it as the Tesla, Inc. of commercial vehicles. VTIQ shares have more-than doubled from their IPO price – even before the deal has been completed.
Jannarone also discussed the switch to virtual IPO roadshows, which could persist even after the coronavirus threat fades. “The bankers I’ve spoke to say it’s surprisingly effective,” he said.
The full interview is available here.
John Jannarone, Editor-in-Chief