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Illustration: Annelise Capossela/Axios

The blank-check boom of 2020 is sapping the 2021 IPO market of prospective issuers.

Driving the news: SPAC godfather Alec Gores this morning announced the market's largest-ever deal, with Gores Holdings IV (Nasdaq: GHIV) agreeing to buy wholesale mortgage lender UWM at an enterprise value of approximately $16.1 billon.

What they're saying: Mat Ishbia, president and CEO of UWM, tells Axios that his company began preparing to go public about a year ago, and over time began to find the SPAC process "more efficient" than the IPO process.

  • "We first met with Alec and [Gores Group's] Mark Stone in March or April, and they made the decision easy," he says. "You only go public once and [we] want to ride shotgun with someone who's done it before."
  • Gores Group was formed as a buyout firm in 1987, but took Hostess Brands public via a SPAC in 2016. Since then it's raised several more, including the one buying UWM and another that last month raised $474 million.

The big picture: Several other companies that have agreed to SPAC deals this year would have otherwise attempted IPOs in 2021. Examples include DraftKings, Desktop Metal, and Opendoor.

  • One SPAC banker estimates that around half of the year's 42 announced deals are for 2021 IPO candidates.
  • There are currently 138 SPACs actively seeking targets, and another 49 that have filed to go public, per SPAC Research.
  • "SPACs are seductive, because they offer the benefits of going public without all the hassles of IPOs," explains an IPO adviser. "You basically trade off more dilution for speed, price certainty, and not having to interface much with Wall Street bankers."

One big question is at what point might new SPAC formation outpace attractive targets, particularly as IPOs themselves are becoming more flexible (direct listings, hybrid listings, etc.).

  • Some sources also speculate that the SPAC formation boom is driven, at least in part, by pandemic-driven difficulties in traditional fundraising. Unclear on what happens if business travel were to return to normal, or if this is a "toothpaste out of the tube" situation.

🎧 Coming attractions: Reid Hoffman and Mark Pincus, who recently raised $600 million for a SPAC called Reinvent Technology Partners, will join today's "Axios Re:Cap" podcast.

Go deeper

SEC finally approves NYSE's direct listings with capital raise

Illustration: Aïda Amer/Axios

The U.S. Securities and Exchange Commission finally approved on Tuesday a rule change that will allow companies doing direct listings on the New York Stock Exchange to simultaneously raise primary capital.

10 hours ago - World

Over 170 Palestinians injured in clashes with Israeli police in Jerusalem

An injured man is carried away as Israeli security forces clash with Palestinian protesters at the al-Aqsa mosque compound in Jerusalem. Photo: Ahmad Gharabli/AFP via Getty Images

At least 178 Palestinians have been injured in clashes with Israeli police in Jerusalem, Reuters reported late Friday.

The big picture: The clashes come amid growing anger over the threatened eviction of Palestinians from their homes on land claimed by Jewish settlers in East Jerusalem. Tensions have also escalated in the occupied West Bank in recent weeks.

Updated 12 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Health: Coronavirus cases hit a seven-month low — Majority back vaccine proof requirements for travel, schools and work — The race to avoid a possible "monster" COVID variant.
  2. Politics: Oklahoma secures $2.6 million refund for hydroxychloroquine purchase — Why Biden's latest vaccine goal is his hardest yet.
  3. Vaccines: Pfizer begins application for full FDA approval of COVID-19 vaccine — Moderna says its COVID booster shot shows promise against variants.
  4. Economy: U.S. adds just 266,000 jobs in April, far below expectations — Americans' return to the skies could benefit smaller airlines.
  5. World: WHO authorizes China's Sinopharm COVID-19 vaccine for emergency use — Mixed response in Europe to Biden's vaccine patents bombshell.
  6. Variant tracker: Where different strains are spreading.