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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.

Updated 3 mins ago - Energy & Environment

Bomb cyclone prompts blizzard warnings from Virginia to Maine

Computer model projection showing the intense storm off of Cape Cod on Jan 29, 2022, with heavy snow and strong winds lashing the coastline. (Weatherbell.com)

Blizzard warnings are in effect for 11 million people from coastal Virginia to eastern Maine as a potentially historic winter storm is set to slam the Mid-Atlantic and Northeast beginning Friday.

Why it matters: The storm will bring hazards ranging from zero visibility amid hurricane force wind gusts and heavy snow, to coastal flooding that will erode vulnerable beaches and threaten property from the Jersey shore to coastal Massachusetts.

Updated 11 mins ago - Politics & Policy

Swastikas found outside Union Station in D.C.

People walk through Union Station on Jan. 16 in Washington, D.C. Photo: Spencer Platt/Getty Images

Drawings of swastikas appeared etched around the entrance to Union Station in Washington, D.C., on Friday morning.

Driving the news: "An investigation is underway with Amtrak Police and the Metropolitan Police Department after swastikas were reported on the exterior of Washington Union Station on Friday," Amtrak spokesperson Kimberly Woods said in a statement to Axios.