IPOs and SPAC deals are on the rebound

It looks like the IPOs and SPAC deals are on a rebound after a massive hit due to the Coronavirus pandemic. This week, six companies filed their paperwork to go public, four had IPOs, and another eight new deals were announced to be completed later.

David Faber’s comments on CNBC’s “Squawk on the Street”

What caught CNBC’s David Faber’s interest on Friday, however, was that 34 companies which had previously gone public via a SPAC deal, opted to De-SPAC in June. On “Squawk on the Street”, he said:

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“Many of these SPAC deals that we’ve watched occur, we brought the sponsor on with the CEO of the company that they’re merging with, they are now De-SPACing. They are now becoming fully public companies under a ticker symbol representative of the actual company, no longer the SPAC.”

During the same discussion on CNBC, Mad Money host Jim Cramer said it was a positive thing as these companies grow up to create more jobs. He also added that these had become better investments since May 12^th when the CPI (consumer price index) number was red hot.

Commenting on the focus on PIPe (private investment in public equity), Faber said:

“There’s more scrutiny from the SEC now. We don’t have a lot of new rules, but there is sort of a new accounting for the warrants. There’s more focus on the PIPes; many of them are coming without the PIPes – the new deals that are being announced. A lot of risk capital is going to really risky endeavours. And we point that out many times.”

Faber says 2024-25 is a key inflexion point for Embark

Faber and Cramer also talked about Embark Trucks Inc – a self-driving truck technology company that said earlier this week it will go public via a SPAC deal. Faber said:

“2024-25 is a key inflexion point for Embark. They raised a lot of capital, over $600 million, from the SPAC. And that goes towards continuing to build the business.”

According to Cramer, out of the many of these companies that are going public, some are going to be perform incredibly well, while others will fail to make a mark. But they’re going to net out to be positive.