The return of the SPAC, Saudi-style

In 2021, SPACs were everywhere.

Chamath Palihapitiya was on CNBC every week, doing his best approximation of Kevin Feige launching SPACs like Marvel phases. Bill Ackman tried to engineer a version so complex it broke the SEC’s brain. Everyone had a blank-check company. The TAMs were big, the fees were bigger, and the market appetite was seemingly insatiable.

It didn’t last. Reality reasserted itself, as it tends to, and like many financial fads inflated by zero rates and retail exuberance, the SPAC boom went spectacularly bust. By the end of 2022, 80%+ of SPACs had traded down, targets struggled to meet forecasts, and redemptions hit record highs. In the US, regulators tightened rules. In Europe, interest never really caught on. And regionally? Well, tumbleweed.

The once-sexy alternative to traditional IPOs became shorthand for financial engineering with more optimism than substance.

So what on earth then is Saudi doing reviving them in 2025?

This week, the Capital Market Authority (CMA) published a draft framework to allow SPACs to list on Nomu, the kingdom’s parallel market. It’s a move that seems, at first glance, three years late to the party.

And yet, this may be the first time SPACs have actually arrived on time.