Goldman Cancels its SPAC

Sad news yesterday for the SPAC world. According to yesterday’s Wall Street Journal, because the IPO of Goldman Sachs’ planned SPAC, Liberty Lane Acquisition Corp., failed to price, the SPAC announced that it had canceled its proposed IPO due to market conditions.

Originally Goldman had hoped to start trading Liberty Lane’s stock last week, then they postponed to this week, and now this cancellation. Observers seem to differ as to whether Goldman’s planned changes to the SPAC structure were partially to blame for their failure to attract investors, or whether the failure heralds a declining interest in SPACs generally.

Goldman had planned to reduce the interest in the SPAC granted to its management team, and require less money up front from them. They also reduced their underwriting fee from what is traditional. To blame failure to price on this, however, seems strange as these changes were meant to benefit initial investors as well as the acquisition targets.

There are still a number of quality players out there churning out new SPACs with high quality management teams and lots of ambition. There are still a number of good acquisitions being made. There has been a slowdown that is hopefully due more to the saturation of the market than anything else. Some players are beginning to examine the potential of radical changes in the structure.

In any event, let’s hope there is a strong future for this useful vehicle.

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