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Bill Ackman and Chamath Palihapitiya’s hot SPACs see shaky trading

  • High-profile special purpose acquisition companies like Pershing Square Tontine Holdings (NYSE:PSTH) and Social Capital Hedosophia Holdings V (NYSE:IPOE) faced pressure in Friday’s session as investors grew wary of SPACs, although the sector later partly rebounded and PSTH even went positive.
  • IPOE, founded by swashbuckling venture-capital investor Chamath Palihapitiya, was leading the class lower. The SPAC fell by as much as 18.2% in the morning and remained down 1.7% shortly after 1 p.m. ET.
  • Its sister SPAC Social Capital Hedosophia Holdings VI (NYSE:IPOF) likewise sank as much as 9.2% and was trading 2.7% lower in the early afternoon.
  • Similarly, Pershing Square Tontine, a SPAC founded by billionaire financier Bill Ackman, dropped as much as 9.1% on the session, but recovered and was trading 2.1% higher shortly after 1 p.m.
  • But Ribbit LEAP Ltd. (NYSE:LEAP) remained 7.3% lower in the early afternoon after falling as much as 9.6% on the session. Ribbit is headed by Meyer Malka, who sits on the boards of Credit Karma, popular Latin America e-commerce site MercadoLibre and other companies.
  • And while Liberty Media Acquisition Corp. (NASDAQ:LMACU) was up 0.6% shortly after 1 p.m. ET, it’s some 21% below the $14.25 intraday high that the SPAC reached on Feb. 11. LMACU is tied to Liberty Media Corp., which owns stakes in SiriusXM, Formula One racing and the Atlanta Braves.
  • SPACs have been hot for months on Wall Street, but many market watchers are warning that the asset class looks increasingly bubble-like. For instance, London Stock Exchange chief David Schwimmer said Friday that SPACs seem to be seeing “froth” that “could end poorly.”
  • Nate Koppikar of hedge fund Orso Partners also recently warned that “if this continues for another week or two, the SPAC market is dead.”
  • And while many SPACs have seen their share prices pop in recent months on word of actual or likely merger deals, several have recently fallen on such news instead.
  • For example, Churchill Capital Corp. IV (NYSE:CCIV) plunged when its widely anticipated deal to buy electric-vehicle maker Lucid Motors actually became official.
  • And Ascendant Digital Acquisition Corp. (NYSE:ACNDU) saw its investment units shed 10.5% on Tuesday after the SPAC agreed to buy financial-information publisher Beacon Street Group at a $3B valuation.

Source: Seeking Alpha – Bill Ackman and Chamath Palihapitiya’s hot SPACs see shaky trading