Analysis-SPAC returns trail S&P 500 as retail investors temper interest

(Reuters) – As retail investors pump less money into blank-check companies, returns on those stocks are badly underperforming versus the S&P 500.

FILE PHOTO: People are seen on Wall St. outside the New York Stock Exchange (NYSE) in New York City, U.S., March 19, 2021. REUTERS/Brendan McDermid

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.

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