Connect with us

Datastream

Return of the SPAC: They’re Back and Bigger than Ever

Published

on

SPAC IPOs 2020

The Briefing

  • Special Purpose Acquisition Companies (SPACs) are shell companies created with the sole intent to raise capital and buy a private organization, or a stake in a company
  • In 2020, 248 new SPACs went public, an increase of more than 300% from 2019
  • 2020 was a record-breaking year for SPACs on many fronts. For instance, Bill Ackman’s Pershing Square Tontine Holdings raised $4 billion—the largest raised in SPAC history

SPACs are Back and Bigger than Ever

In 2020, SPACs raised over $82 billion in capital. That’s more funds in one year than in the last 10 years combined.

But what exactly is a SPAC, and how have they changed over the years?

SPAC IPOs versus Traditional IPOs

SPAC IPOs are essentially the opposite of traditional IPOs.

In a traditional IPO, an established company goes public to raise funds. In contrast, SPAC IPOs involve a shell company that’s already raised capital and is looking to purchase an organization (or a stake in a company).

While traditional IPOs are seeking funds, SPAC IPOs already have the funds—what they’re seeking is an organization to attach themselves to.

SPACs, also known as “Blank Check” companies, provide a faster way to raise funds compared to traditional IPOs. That’s because the audit process for a SPAC is shorter, since they don’t have any financial statements to review.

A Brief History of SPACs

248 SPACs went public in 2020—189 more than in 2019.

2020 has by far been the biggest year for SPACs in the last few decades. Here’s a look at the number of SPAC IPOs over the last 15 years, along with their average size:

Year# of SPAC IPOsAverage IPO Size (M)
200528$75.5
200637$91.5
200766$183.2
200817$226.0
20091$36.0
20107$71.8
201116$69.4
20129$54.5
201310$144.7
201412$145.8
201520$195.1
201613$269.2
201734$295.5
201846$233.7
201959$230.5
2020248$334.4

SPACs had a brief moment in 2007 prior to the financial crisis, but by 2009 they had lost traction—that year, only one SPAC IPO went public. However, in the last few years, SPACs have picked up momentum again.

And in 2020, the use of this curious go-public vehicle has skyrocketed.

The New and Improved SPACs of 2020

Historically, SPACs haven’t had the highest returns for investors. In fact, they were once considered a last resort when it came to raising capital.

But in the last few years, SPACs have ramped up their game. According to a recent report by McKinsey & Company, there have been three significant changes:

  1. Improved track record
    In 2020, more than 90% of SPAC deals closed. That’s a notable improvement compared to previous years—before 2015, at least 20% of SPACs liquidated.
  2. Bigger in size
    The average SPAC trust size is 5x larger than it was a decade ago.
  3. Well-known participants
    Some high-profile investors have jumped on the SPAC-train this year, which has helped generate hype.

While some experts are expecting the popularity of the SPAC to continue in 2021, it’s still early days. So it’s hard to know for certain if SPACs are back for the long-haul.

»If you found this article interesting, you might enjoy this full-length post on traditional IPOs: The World’s Largest IPOs Adjusted For Inflation

Where does this data come from?

Source: SPAC Data
Details: All US-listed SPACs are included in the data set. Figures as of Dec 30, 2020

Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.

Comments

Datastream

The U.S. Share of the Global Economy Over Time

As of 2019, the U.S. made up almost a quarter of the global economy. This chart shows how the U.S. Share of the global GDP has changed over time.

Published

on

us share of global gdp

The Briefing

  • The U.S. share of the global economy has nearly halved since 1960
  • America’s nominal GDP in current U.S. dollars is $21.4 trillion, or about 24% of the share of the global economy

The World’s Largest Economy

The U.S. is the world’s largest economy by nominal GDP, and its influence on the global economy is quite remarkable.

As of 2019, the U.S. made up almost a quarter of the global economy. But how has America’s share of the economic pie changed over time?

The U.S. Share of the Global Economy Over Time

While the U.S. economy has grown quickly over time, the global economy has grown quicker.

Since peaking at 40% in 1960, the U.S. share of the world economy has been cut almost in half, despite a rising national GDP and being the birthplace of some of the biggest companies on the planet.

YearGlobal GDPU.S. GDPU.S. Share of Global Economy
1960$1.37T$0.53T40%
1965$1.97T$0.74T38%
1970$2.96T$1.07T36%
1975$5.92T$1.69T28%
1980$11.23T$2.86T25%
1985$12.79T$4.34T34%
1990$22.63T$5.96T26%
1995$30.89T$7.64T25%
2000$33.62T$10.25T30%
2005$47.53T$13.04T28%
2010$66.13T$14.99T23%
2015$75.22T$18.23T24%
2019$87.80T$21.43T24%

The decline of America’s contribution to global GDP has been slow and uneven, with crests and troughs along the way.

Between 1965 and 1980, the country’s share fell by 13 percentage points, mainly due to stagflation of the 1970s. This decline was followed by Reaganomics and a period of strong recovery, which helped propel the U.S. share of the global economy back up to 34% by 1985.

The whipsawing would continue. Between 1985 and 1995, the U.S share fell by another 11 percentage points, only to bounce back to a local peak of 30% by the year 2000.

Downhill From Here?

Since the beginning of the 21st century, growth in many developing markets has continued at a rapid pace—and the U.S. share of the global economy has decreased as a result.

Until 2005, the U.S. still accounted for 28% of global GDP, but the Global Financial Crisis left a big dent, and its share fell to 23% by 2010. It has since remained relatively stable at 24%.

It’s important to put this decline into perspective. For instance, China’s share of the global economy grew from 4% in 1960 to 16.3% in 2019. Over that same time period, other countries like South Korea, Brazil, Mexico, Indonesia, and India also saw their emergence on the economic world stage, as well.

What the Future Holds

The COVID-19 pandemic has changed the course of the global economy, with most countries experiencing a recession in 2020. America’s economic position will depend on how quickly it can recover compared to the rest of the world.

Where does this data come from?

Source: The World Bank
Details: Data is in current U.S. dollars. Dollar figures for GDP are converted from domestic currencies using single year official exchange rates.

Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.

Continue Reading

Datastream

America’s Most Responsible Companies in 2021

Which American companies are leading the way when it comes to corporate responsibility? Here’s a look at 2021’s most responsible companies.

Published

on

America's Most Responsible Corporations

The Briefing

  • Overall, HP was rated the most responsible American company in 2021
  • When it came to environmental initiatives, Waters took the top spot. The biotech company has committed to reducing its emissions by 35% from its 2016 levels
  • General Motors received the top score in social responsibility—it’s the only major U.S. company with both a female CEO and CFO
  • In the corporate governance category, Qualcomm placed first. The company runs a number of education programs to help engage women and minorities in STEM related-fields

America’s Most Responsible Companies in 2021

Consumers are becoming increasingly more thoughtful about the brands they support and buy from. In the U.S. and UK, 68% of online consumers would or might stop buying from a brand with weak corporate responsibility practices.

Because of this, companies need to ensure their corporate social responsibility (CSR) initiatives are up to snuff in order to be competitive.

With this in mind, here’s a look at the top 20 most responsible companies in America, and what they’ve been doing to give back to their communities.

The Top 20 Most Responsible Companies

Newsweek and Statista used a four-step methodology to identify America’s most responsible companies. The process included a pre-screening, as well as in-depth CSR document review, and a consumer survey.

From there, companies were given a score out of 100 and ranked accordingly. With a score of 93.2, HP placed first as America’s most responsible company:

RankCompanyOverall Score (out of 100)
1HP93.2
2NVIDIA92.7
3Microsoft91.9
4Cisco Systems91.7
5Qualcomm91.5
6General Mills91.3
7Whirlpool91.3
8Illumina90.9
9Citigroup89.5
10Dell Technologies89.4
11Lam Research88.8
12General Motors88.7
13American Express88.5
14Nielsen88.4
15Mettler-Toledo International88.3
16MetLife88.2
17Merck & Co88.1
18International Flavors & Fragrances88.0
19Waters87.7
20Intel87.4

In its 2019 Sustainable Impact Report, HP outlined how it’s been working to drive sustainability in three key areas—the planet, people, and community. And the company has made some impressive progress. For instance, in 2019 it used over 1 million pounds of ocean-bound plastic in its products.

It’s not a huge surprise that HP has taken the top spot on the list. The company is known for its innovation and progressive practices. In 2020, it was recognized as one of the top 20 most innovative organizations of the year.

Corporate Responsibility in a COVID World

The world’s continual struggle with COVID-19 has put an even larger emphasis on CSR, and the importance of supporting the community at large.

It’s no longer just the right thing to do. As consumer demand for transparency and corporate responsibility escalates, CSR practices are transitioning from a nice-to-have to a need-to-have. And organizations need to get on board before they’re left behind.

Where does this data come from?

Source: Newsweek and Statista
Notes: For more information on methodology, click here

Continue Reading

Subscribe

Join the 220,000+ subscribers who receive our daily email

Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.

Popular