Market Trends June - SPACs are Fighting On

The month of June witnessed a noticeable shift in investor sentiment back towards Special Purpose Acquisition Companies (SPACs). This resurgence in SPACs suggests a renewed enthusiasm among investors for this alternative method of taking companies public.

As the leading platform for retail traders, TradingView has access to a wealth of user-engagement data which allows for insight into the sentiment of the overall markets. By piecing these engagement trends together, we can build a picture of how interest levels in various sectors changed over any given month. Let’s take a more detailed look at what was happening last month.

SPACs are Fighting On

A “darling” sector of the pandemic, the popularity of Special Purpose Acquisition Companies (SPACs) somewhat waned in the wake of covid. Some believed that the pandemic-fueled boom for SPACs was a ‘one-off’, and that they would struggle to see sustained interest. The data however, indicates that they have some fight in them yet.

It can be seen from engagement metrics that June’s biggest winner in the list of popular SPACs was Nikola Corporation (NKLA) logging a 166.8% increase in engagement from the month prior. The heavy-duty electric vehicle manufacturer logged stellar share price growth of 121% over the same month – riding a wave of positive sentiment surrounding inflation. However analysts have pointed out that the company is still burning through cash at an alarming rate, and is still very far from being profitable. It was SoFi Technologies (SOFI) which logged the largest increase in engagement since the start of the year, and the online bank’s share price rose by more than 20% in June alone.

Another SPAC which saw increasing interest over the course of June was Richard Branson’s Virgin Galactic Holdings (SPCE) with a 88.5% MoM increase in engagement. However, this interest wasn’t for positive reasons as in the case of Nikola and SoFi. The space travel company only logged a 12% price gain over the course of the month, after several consecutive months of losses before it. This surge in engagement reflects the ongoing fascination and speculation surrounding the potential of commercial space travel, but also highlights the volatility and unpredictability associated with such ventures.

One popular SPAC which saw decreasing engagement was DraftKings (DKNG), with a 23.9% engagement decrease MoM in June. This might come as a surprise to some, as the sports betting company’s share price has been steadily climbing upwards since the beginning of the year and in the month of June. Overall, the fact that six of the eight high-profile SPACs analyzed logged fairly significant increases in engagement over June, would suggest that interest in SPACs still remains and is perhaps beginning to recover slightly.