SPACs – The Implosion Continues. And... Where's the SEC?

Looking back, those wer. fun times when special purpose acquisition companies ('SPACs') ruled the market...

I was thinking about the "good old days" last week when I was on CNBC's Last Call to talk about a few of yesteryear's most popular SPACs that were warning they might not be able to stay in business...

Looking back... What could we possibly have been thinking?

Even before most of us knew what the "SPAC" acronym even meant – indicating a "blank check" company in search of a business to take public via a special merger – the market was getting flooded by them.

It reached the point that there were more companies than acquisition targets. So many, in fact, that so far this year SPAC Track says 142 SPACs were liquidated without ever finding a business to merge with. That compares to 144 in all of last year.

What made SPACs so special was the 'investor presentation' included in the merger filings after the SPAC found a company to combine with...

Usually toward the tail end there would be a financial projection – often going out years.

As it turns out, many (or most) of these companies’ grand projections were nothing but fantasy.

Such as WeWork (WE), which owns and operates co-working spaces across the country... and which warned last week that there's doubt it can stay in business.

In the below slide from its investor presentation in regulatory filings, here's what the company projected regarding liquidity and adjusted earnings before interest, taxes, depreciation, and amortization ("EBITDA")...

WeWork was expecting positive liquidity to the tune of $2.1 billion at the end of last year, rising to $2.5 billion this year. Oops, not even close.

Then there’s private jet chartering company Wheels Up Experience (UP)...

Here's the slide on financial projections from the company's investor presentation in regulatory filings...

By now, Wheels Up was supposed to have more than $13 billion in revenue... But as of the end of last year, revenue was barely above $1.5 billion. Active users have also fallen short, but so-called "flight legs" are a fraction of what they were supposed to be.

No surprise then, like WeWork, Wheels Up filed last week that it may go belly-up.

And these are just the most recent examples of SPACs that overpromised and didn't just underdeliver, but may not be around for the full length of their projections.

And if they don't make it, they won't be alone...

There were simply so many. Like Lordstown Motors, with its snazzy electric-powered pickup trucks. Projections of grandeur sent this stock to more than $400 per share at its peak.

By now, according to the forecast in its investor presentation, the company should have been producing more than 30,000 units and revenue of $3.5 billion and EBITDA of $10 million... on its way to $298 million this year.

Instead, its stock was delisted from the Nasdaq exchange and moved to the over-the-counter ("OTC") market. It now trades under the ticker RIDEQ, with the "Q" standing for bankruptcy.

But wait, there’s more… (To read the rest, please click here.)