SPAC companies accounted for at least 21 bankruptcies this year and a staggering $46 billion in lost investor value

At least 21 firms that went public by merging with special purpose acquisition companies, or SPACs, went bankrupt this year, according to data compiled by Bloomberg. Measured from their peak market capitalizations, the insolvencies bookend the loss of more than $46 billion of total equity value.

The failures span money-losing electric vehicle startups and forward-thinking farming companies. Blank-check firms were good at propelling their targets to the public market even when they lacked well-formed financials, said Gary Broadbent, an executive guiding former SPAC AppHarvest Inc. through its liquidation. Many weren’t “ready for primetime,” he said.

Some were more promising than others, but all drew dollars from excitable investors caught up in the SPAC craze, including mom—and-pop traders. Plenty of shareholders are now suing SPAC sponsors over their losses.

The largest SPAC bankruptcies included that of flexible workplace provider WeWork Inc., which boasted a $9.4 billion market value after going public in 2021. It succumbed to Chapter 11 last month with plans to jettison expensive office leases. Electric vehicle makers Proterra Inc. and Lordstown Motors Corp. also carried sizable market values, topping out at roughly $3.7 billion and $5 billion, respectively, before filing for bankruptcy earlier this year.

Many of these companies sought protection from creditors less than two years after going public. Software firm Near Intelligence Inc. filed Chapter 11 in December, less than 9 months after its stock debuted on the Nasdaq.

Of course, many predicted the ongoing wave of bankruptcies. Critics called the SPAC frenzy a bubble soon after it began. 

Going public via SPAC has historically been faster and faced…