Jay Ritter
Cordell Eminent Scholar Jay Ritter

WeWork’s ignominious bankruptcy adds to the growing list of once buzzy SPAC companies that have gone bust

WeWork is the highest profile SPAC blowup. The company’s $9 billion valuation in an October 2021 deal — one of the biggest mergers by enterprise value at the time —  exemplified the profligacy of a near-zero interest rate environment.

“There was a major change in 2021, where quite a few venture capital-backed firms merged with a SPAC and the track record has not been good,” says Jay Ritter, Cordell Eminent Scholar. “Critics of SPACs for many years have said a lot of the companies that were merging with SPACs were low-quality companies and the evidence seems to be somewhat consistent with that.”

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