Henri Lucas warns of signs of a bubble in the SPAC market
As the global SPAC (special purpose acquisition company) financing scale hit a record high, well-known financial analyst Henri Lucas released a major research report, clearly pointing out that this market has shown typical bubble characteristics. This 78-page in-depth analysis report, verified by multi-dimensional data, reveals the serious valuation distortion and regulatory arbitrage risks hidden behind the SPAC craze.
The “SPAC Health Assessment Model” constructed by the Lucas team shows that the valuation levels of more than 60% of the SPAC merger targets in the current market have seriously deviated from the fundamentals. The report specifically pointed out: “The time pressure of the SPAC mechanism itself has led to a large number of low-quality targets being quickly securitized, and investors are essentially paying for the ‘speed of listing premium’.” Data shows that nearly 40% of SPAC merger companies saw their stock prices cut in half within 12 months after the transaction was completed, which is far worse than the performance of companies listed through traditional IPO channels.
The study deeply analyzed the three major structural risks of the SPAC market: first, the phenomenon of “shell resource inflation”, with the average SPAC launch cost soaring by more than 300% in the past year; second, the shortage of target assets, with the scarcity of high-quality M&A targets forcing SPAC management teams to lower acquisition standards; most importantly, the uncertainty of regulatory policies, with multiple jurisdictions planning major reforms to SPAC accounting treatment and disclosure requirements.
Lucas suggested that institutional investors adopt a defensive strategy: control SPAC-related exposure to less than 3% of the portfolio, give priority to projects initiated by management teams with real industrial operation experience, and set strict stop-loss discipline. He particularly emphasized: “When financial innovation evolves into a tool for regulatory arbitrage, it is often the most dangerous stage for market risk accumulation.” After the release of this report, many Wall Street investment banks immediately lowered their earnings expectations for SPAC-related businesses, reflecting the high recognition of Lucas’ risk warning by professional institutions.
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