How Did All Those Travel SPACs End Up Doing?
Photo Credit: Nasdaq Stock Exchange. Source: VisualHunt / luisvilla
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You win some, you lose some. As quickly as SPACs soared on the hype, they lost much of their luster just as quickly on Wall Street. Travel SPACs were definitely no exception. Take a look at the numbers.
The investor mania for special purpose acquisition companies, or SPACs, in the past two years cooled mighty quick, with most travel companies going public through this process plummeting in value since their stock market debuts.
In fact, some of the major travel SPACs have lost on average more than 65 percent of their value from market debut.
A quick recap on the concept: These faddish investment vehicles offer an alternative fundraising method for companies seeking capital. A shell company with no operations is formed with a pool of money from investors. The goal is to identify an acquisition target, often a private company, and take it public quickly.
The appeal of the process is often to bypass the regulatory scrutiny and lengthy process behind a traditional initial public offering, or IPO. SPACs have been on the playing field long before gaining popularity during the pandemic.
A combination of eager startups seeking funding and abundant investors sitting on dry powder saw a storm of blank-check companies enter the stock exchanges in 2020 and 2021.
The Wall Street SPAC frenzy waned in 2022. One culprit was increased regulatory scrutiny from U.S. regulators. Another was general market underperformance in response to rising interest rates.
Here are the specific outcomes of some travel SPACs swept up in the frenzy and made it to the market:
Vacasa’s Merger With TPG Pace Solutions to Trade Under Nasdaq: VCSAVacasa, the Oregon-based startup offering a full-service vacation rental property management platform, was one of the first SPACs in the travel industry to hit the market. The company announced in July 2021 its plans to become publicly listed by comb
