Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Sarah Grillo/Axios

It may be too soon to tell whether the SPAC party is over — but the forecast for the parade calls for rain.

Why it matters: The phenomenon that has swept Wall Street is now a pop culture buzzword — attracting your favorite celebrities, former politicos, Reddit traders and long-time investors — and drawing increasing scrutiny.

How it works: So called "blank-check" firms go public with the intention of using the money they raise to buy a private company, which then becomes publicly traded after the merger.

  • By the numbers: A little over two months into 2021, almost as many SPACs (246) have gone public as there were in total last year (248, which was a record itself), according to SPAC Research.

Driving the news: The SEC issued a warning on Wednesday against investing in SPACs solely because celebrities are involved or promoting them, echoing some of its alarm from a couple years ago during the digital token frenzy.

  • And earlier Thursday, an advisory committee to the commission held a hearing about SPACs, where questions to the expert panelists largely focused on investor risks and whether additional protections are needed.
  • NYU Law's Michael Ohlrogge pointed out that not only have post-merger returns for investors historically been poor, but that a lot of the true costs are obscured in the disclosures, noting he and his team have had to spend hours looking for and calculating this for even a single SPAC. Certainly, the average retail investor can't be expected to work this out.

Lawmakers are also feeling new pressure to keep SPACs on their radar, with some advocacy groups recently asking Congress for fixes to "tamp down pre-merger hype," among other things.

The other side: "You've had a lot of folks jump into the SPAC market thinking it's like a gold rush. Whenever you have that in any sort of market, there are a lot of bad actors," Arjun Sethi, co-founder of venture firm Tribe Capital, tells Axios.

  • "But you don't want to have it regulated so hard, with a tight iron grip that you lock people out from being able to participate in the upside," Sethi says. (Yes, he has a SPAC).
  • And as Axios' Dan Primack recently argued, there are already guardrails in place preventing a true disaster.

Between the lines: SPACs got swept up in recent stock market jitters — a sign they aren't immune from broader volatility.

  • An index that tracks their performance is now roughly 15% below where it peaked last month.

The bottom line: More rules — plus investors souring on these deals — could be on the horizon, but for now "the party is definitely not over," says Josef Schuster, who created that index.

Go deeper

What we know about the victims of the Indianapolis mass shooting

Officials load a body into a vehicle at the site of the mass shooting in Indianapolis. Photo:

Eight people who were killed along with several others who were injured in a Thursday evening shooting at a FedEx facility in Indianapolis have been identified by local law enforcement.

The big picture: The Sikh Coalition said at least four of the eight victims were members of the Indianapolis Sikh community.

Pompeo, wife misused State Dept. resources, federal watchdog finds

Former Secretary of State Mike Pompeo. Photo: Joe Raedle/Getty Images

The State Department's independent watchdog found that former Secretary of State Mike Pompeo violated federal ethics rules when he and his wife asked department employees to perform personal tasks on more than 100 occasions, including picking up their dog and making private dinner reservations.

Why it matters: The report comes as Pompeo pours money into a new political group amid speculation about a possible 2024 presidential run.