Markets

SPACs Have Raised Over $38 Billion in 2021, But New NYSE Rule Looms

NYSE
  • SPACs have already raised more than $38 billion in 2021, with an average of $296 million for 128 SPAC IPOs, according to SPACInsider.
  • The money raised through SPACs in January alone surpassed that of all of 2019.
  • But a new rule on direct listings could pressure the booming SPAC market.

The 2021 IPO market is already on fire six weeks into the new year, with SPACs leading the way.

SPACs have raised more than $38 billion year to date, with an average of $296 million for 128 SPAC IPOs, according to SPACInsider. That's nearly half the money raised by SPACs in 2020. Last year, SPACs hauled in a record $83 billion with an average of nearly $335 million for 248 listings.

This year's numbers dwarf those in previous years. In 2019, only $13.6 billion were raised through SPACs. In 2018 and 2017, they collected $10.7 billion and $10 billion, respectively.

The big question this year is how a change to the New York Stock Exchange's direct listing rules will impact the IPO market.

The new rule, which was approved by the Securities and Exchange Commission in late December, will allow companies to raise fresh capital through direct listings as opposed to just selling existing shares. Under the change, companies can raise cash from retail investors as well as by selling existing shares of the company. Making direct listings more attractive could cut demand for a SPAC or traditional initial public offerings.

"Everyone's on a level playing field," NYSE President Stacey Cunningham told CNBC when talking about the new rule. "What's great about it is it democratizes access to that public listing on the exchange on that first day of trading." 

Watch the video above to learn more about the IPO and SPAC processes and whether the IPO market is really broken.

Correction: Online gaming company Roblox said in its latest S-1 filing that it will not be raising fresh capital from registered stockholders.

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