May 25, 2022 - Economy

Massive SPAC deal gets crushed on first day of trading

Illustration of a person walking off the edge of a hundred dollar bill.

Illustration: Shoshana Gordon/Axios

MSP Recovery, a Coral Gables, Fla.-based provider of Medicare and Medicaid payment recovery services, began trading Tuesday on the Nasdaq after completing its merger with a SPAC called Lionheart Acquisition Corp. II. Then those shares promptly lost over half their value.

Why it matters: This was the second-largest SPAC deal in history, just behind Grab, worth $32.6 billion upon announcement in July 2021.

By the numbers: MSP Recovery shares plunged more than 60% within their first hour of trading, closing down 53.06% at $5.06 per share.

  • Lionheart's earlier SPAC bought fast food chain BurgerFi, whose shares have lost more than 80% since going public.

More, from Bloomberg: "With the SPAC boom veering toward a bust as risk appetite wanes, the merger could end up being one of the last outrageous deals to reach the market. It stands out for its transactions between stakeholders, huge fees and lack of capital raised."

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