SPAC issuance this year has been at a record pace, but an accounting change by the SEC appears to have slowed the market dramatically. The SEC recently announced that warrants issued by SPACs would be classified as liabilities, not equity. In March, 109 SPACs went public, but that number is is down to 10 in April. Warrants are typically granted to early investors as extra compensation for the cash invested. Valuing these warrants will be expensive and it appears that many companies may not have the internal capacity to do so. And the warrants will need to be valued every quarter when the company files its 10-K.
