(Reuters) – As retail investors pump less money into blank-check companies, returns on those stocks are badly underperforming versus the S&P 500.
Reuters found that over 100 special-purpose acquisition companies, or SPACs, that announced mergers this year on average have gained under 2% from the price they traded at when they first listed on the stock exchange.
Most of those SPACs began trading on the stock market last year, and the group’s median performance has trailed the S&P 500 by 15 percentage points, according to the Reuters analysis of data from Refinitiv and research firm SPAC Research.
Their underperformance comes amid a fall from grace for SPACs as increased regulatory scrutiny threatens to make many proposed mergers less attractive.
In early 2021, individual investors hungry for exposure to industries such as electric vehicles…