Investors enjoyed record IPOs this year, despite Covid-19. Topping record-breaking, blockbuster IPOs by DoorDash and AirBnB, cloud data company Snowflake was the surprise IPO dark horse, raising $70 billion on its opening day above its $12.4 billion pricing and is now worth $90 billion.

Electric vehicle maker Nikola’s SPAC (Special Purpose Acquisition Company) – a company designed to acquire another company to go public -- reached $34 billion in June, but fell to $6.6 billion after a deal with GM fell through, demonstrating the risks of SPAC offerings. Nevertheless, these massive IPOs have woken up investors, especially ESG (Environmental, Social & Governance) funds that have tens of trillions of capital shifting from fossil fuels to other assets. Special Purpose Acquisition Companies (SPACs) on FireSPACs are now the hottest stick on Wall Street for mergers and acquisitions (M&As). Often with no commercial operations, they are formed to acquire an existing company and raise capital via an IPO. They are also known as “blank check companies” because they raise capital with no idea where they will be investing. As of December 19th, over 45,000 deals with $3.4 trillion had been announced, down 7% by value from the same time last year. The new SPACs are focused on tech and consumer fields where new high-growth start-ups serving emerging markets can excel. There are tradeoffs so analyze them carefully before you invest or work with a SPAC. More at Bloomberg and NYTimes.

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