This Is Merely the Very Beginning. This Year, at Least 21 Spac-Listed Companies Declared Bankruptcy, Wiping Out a Total of $46 Billion in Equity. Coming: The Mother of All Crashes Coming

Featured Story

0

HNewsWire: A wave of bankruptcies and corporate defaults can be imminent as US corporations are being battered by rising loan rates. Experts caution that as high interest rates have an adverse effect on both consumers and businesses, it may increase the likelihood of a recession. As of the end of August, 459 businesses had declared bankruptcy, according to S&P Global. The entire number of bankruptcy filings reported between 2021 and 2023 is already exceeded by that figure. August saw the largest monthly total of corporate debt defaults since 2009. S&P Worldwide According to Collin Martin, a fixed income strategist at Charles Schwab and director, borrowing prices for certain companies increased by two or almost three times in 2023 compared to earlier years, which had a negative impact on company balance sheets. The ICE BofA US High Yield Index shows that…Read More

Tyler Durden's Photo

by Tyler Durden

Thursday, Dec 28, 2023 – 05:55 AMAn increasing number of startups that have merged with special purpose acquisition companies, or SPACs, are running out of cash and unable to raise new funds in a deteriorating macro environment with high interest rates. 

At least 21 companies that went public via SPACs filed for bankruptcy this year, wiping out $46 billion in total equity, according to Bloomberg data. Some of the largest bankruptcies were WeWork, Lordstown Motors, and Virgin Orbit

The failures of coworking space, electric vehicle, and space launch startups exemplify that these companies were never “ready for primetime” on public markets, said Gary Broadbent, an executive guiding former SPAC AppHarvest Inc. 

WeWork was the highest-profile SPAC implosion of the year. It was once valued at $9.4 billion after going public in 2021. This blow-up exemplifies the bubbles the Federal Reserve blows in a near-zero interest rate environment, with the eventual implosion when rates rise (or before, in anticipation of higher rates). 

Usha Rodrigues, a law professor at the University of Georgia, said the SPAC bubble during Covid was a “ticking time bomb” of corporate failures and “Everyone should have seen this cliff coming.” 

Bloomberg data shows about 140 SPACs desperately need financing in 2024 to keep operations humming. Elevated interest rates will make refinance challenging and increase the risk of more bankruptcies. 

Hudson Labs shows about 44% of SPAC companies that filed annual reports in 2023 have stated going-concern warnings compared with 22% of non-SPAC companies. 

However, the Fed’s pivot this month could be the biggest lifeline for these startups as rate traders prices in 6 interest rate cuts through December 2024. 

The pandemic-fueled frenzy has been over for two years, and the failures will likely accelerate in the first quarter. 

Loading

Don't Miss

Six ‘Criminal’ Banks Finally Identified and Exposed! Why No Media Coverage?

By StevieRay Hansen

Why is it so important to understand and embrace the concept of absolute truth in all areas of life (including faith and religion)? Simply because…

Loading

Read More

Trump Slams Fed After Market Meltdown: “As Usual, Powell Let Us Down”

By StevieRay Hansen

Scripture shows us that physical evils—sickness, famine, war, and death—are the result of moral evil. And moral evil is something human beings are all responsible…

Loading

Read More

JPMORGAN: WE BELIEVE THE DOLLAR COULD LOSE ITS STATUS AS WORLD’S RESERVE CURRENCY

By StevieRay Hansen

These same money changers were associated with others who engaged in shady business practices in the temple courts. Some sold sacrificial animals, overcharging people who did…

Loading

Read More

Like Jeffrey Epstein, Bullion Banks Get Sweet Deals from the Justice Department

By StevieRay Hansen

Paul often clarified the difference between his ministry and that of false teachers by pointing out their greed. In 2 Corinthians 2:17 he wrote, “Unlike so many, we do…

Loading

Read More

HERE’S WHAT AN AMERICAN ECONOMIC COLLAPSE COULD ACTUALLY LOOK LIKE

By StevieRay Hansen

Jeremiah 30:7 says, “That day is great so that none is like it.” The only time period that fits this description is the period of the…

Loading

Read More

StevieRay Hansen

In his riveting memoir, "A Long Journey Home", StevieRay Hansen will lead you through his incredible journey from homeless kid to multimillionaire oilman willing to give a helping hand to other throwaway kids. Available on Amazon.

Leave a Comment