Forbes | Peter Goldstein | A Market Of Caution And Opportunity: SPACs And IPOs

Why This Matters

The public market is smaller than it used to be. That changes who gets access, when they get it and who participates in the upside. It also concentrates ownership in private hands for longer.

Over the last three decades, the U.S. has lost close to half of its listed domestic companies. The count peaked at 8,090 in 1996 and stood at 4,010 in 2024, the latest World Bank year.

Listings are returning, but the mix matters. S&P Global Market Intelligence counted 349 U.S. IPOs in 2025 including SPACs, and 205 non-SPAC IPOs. That implies 144 SPAC IPOs, representing 41% of total U.S. IPO issuance for the year.

Fewer public companies mean fewer pathways for growth capital and long-term participation. That is why the quality of the “reopening” matters as much as the volume.

When SPACs Work

For the right companies, SPACs provide the flexibility a traditional IPO often cannot. Cross-border companies, complex stories, emerging technologies and non-standard capital structures can benefit from a negotiated process and an experienced sponsor who understands public markets.

But those advantages are conditional. Trust protects capital until a deal closes. Redemption gives investors a real choice. Sponsors put capital at risk and lose it if no deal closes. These mechanics shape incentives, but they do not make a weak business investable.

A SPAC is not just financing. It is a partnership with embedded incentives. When alignment is real, the sponsor behaves like a long-term steward. When alignment is weak, the structure tilts toward closing over quality. That is why terms matter. They shape behavior when timelines tighten, redemptions rise and the market stops being forgiving.

Regulation has raised the bar and removed many shortcuts. The SEC tightened disclosure and liability expectations. Financials, risk factors and valuation support show up earlier. Investors get clarity sooner. Teams get less room for sloppy execution.

Done right, a SPAC can accelerate access to public capital without compromising governance. The best candidates are operationally mature, financially transparent and ready for public market accountability.

When SPACs Fall Short

SPACs are not a shortcut. The same flexibility that helps the right company can amplify risk when fundamentals are thin or execution slips.

Heavy redemptions can leave a thin float. Thin float drives volatility. Volatility raises the cost of capital. In tougher deals, redemptions can force PIPE repricing or shrink proceeds, and the economics can change fast.

Across multiple cohorts, post-merger de-SPAC performance has often lagged traditional IPO cohorts. The market is still cautious. Investors are wary of deals that feel rushed, promotional or lightly vetted.

In practice, SPACs demand the same discipline as IPOs—and sometimes more. Diligence is heavy. Disclosure is real. Sponsors and targets must align strategy, governance and communications. Without alignment, confidence breaks. Liquidity suffers. Long-term value becomes harder to defend.

What Investors Are Underwriting

Public market outcomes are often decided before the ticker changes hands.

In a traditional IPO, investors are underwriting price discovery and a broader holder base. In a SPAC, investors are underwriting structure as much as operations.

Redemptions shape float. Float shapes volatility. Volatility shapes the cost of capital.

The questions are simple. Who owns this after closing? How tight is the float? How much real capital comes in versus paper proceeds? If those answers are unclear, the risk is not theoretical. It shows up in price.

The Enduring Strength Of The Traditional IPO

For mature companies with predictable earnings, a real operating history and brand credibility, the traditional IPO remains the preferred path. The process is longer, but it delivers what SPACs rarely replicate: broad institutional participation, durable analyst coverage and deeper liquidity. It also builds a broader holder mix from day one.

The road show is still the market test. It pressures valuation, surfaces objections early and builds long-term investor relationships. For founders who can handle scrutiny, the process strengthens positioning.

An IPO also brings credibility and visibility that can compound over time, if execution stays clean after pricing. It rewards readiness for the spotlight.

Fit, Not Fashion

Choosing between a SPAC and an IPO is about cost of capital, certainty of outcome, timing and the investor base you want to live with after the bell. It is about fit, stage and organizational readiness.

In volatile markets, time becomes capital. A traditional IPO often runs 12 to 18 months, depending on readiness and market windows. A SPAC can compress timelines into months. Speed helps when windows are short. It hurts when preparation is incomplete.

The best outcomes treat going public as an operating upgrade, not an exit.

Lessons From This Cycle

2021 proved that structure without real underwriting attracts volatility, and volatility eventually gets priced in. The pullback of 2022 and 2023 reminded everyone that fundamentals still win.

Now the market is rewarding credibility over hype. Sponsors are underwriting the business, not the narrative. Investors want transparency first, excitement second. That is healthier for issuers, investors and the market’s long-term reputation.

Cycles shift. Discipline endures. SPACs are not a replacement for IPOs; they are an option inside the same system. Used with integrity, they can complement IPOs and widen access to public capital.

SPAC or IPO, durable success comes down to the same fundamentals: sound governance, clear alignment and disciplined execution.

The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.