This is not the week to be tying the knot with a SPAC. Shares of Grab, a Southeast Asian food-delivery and ride-hailing firm that went public via a SPAC merger, fell 21% on its opening day today. Meanwhile we also got word—hats off to The Wall Street Journal for the scoop—that most of the shareholders in BuzzFeed’s SPAC partner, 890 Fifth Avenue Partners, withdrew their cash ahead of today’s vote on that deal. That hardly signals confidence in BuzzFeed’s business prospects.
High SPAC redemptions aren’t uncommon, to be sure, and won’t stop the merger from getting done. But it doesn’t augur well for how BuzzFeed shares will perform when they start trading on Monday, particularly in what appears to be an unforgiving market. Some other recent high-profile tech businesses have flopped after completing their SPAC mergers, notably WeWork (shares now down 19%) and scooter rental firm Bird Global (down 18%). It has long been true that most SPAC mergers end up with shares falling below their original SPAC selling price, which is typically $10. But you have to wonder why high-profile companies with established businesses continue to pursue SPACs as a means of going public.