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Presumably because Instacart is planning a direct listing. That's not the same thing as a SPAC.

dmingod666 6y ago
What am I missing here: "IPOs have been on a tear since last summer as markets rallied following the Federal Reserve’s moves to support the U.S. economy during the COVID-19 pandemic. Yet their popularity has been eroding as more companies choose to go public through mergers with special purpose acquisition companies (SPACs) or direct listings."
- lmm 6y ago
  That sentence is true but it's also kind of akin to "car popularity is declining as more people choose to use bicycles or trains" - bicycles and trains don't actually have much in common, and in many ways cars are more similar to either of them than they are to each other.
  - dmingod666 6y ago
    Thanks! :)
- Johnny555 6y ago
  I think you're missing that SPACs are not the same as direct listings. That sentence didn't mean "...go public through SPACs, also known as direct listings", but it meant "...go public through either SPACs or direct listings". More info about SPACs vs direct listings here: https://jonathanhung.com/spac-vs-direct-listing-whats-right-for-your-startup/ https://jonathanhung.com/spac-vs-direct-listing-whats-right-...
- yowlingcat 6y ago
  There's a bit of nuance here in that outside IPOs, companies can go public both through either a SPAC or direct listing. However, a SPAC incurs a 20% sponsor fee that the direct listing doesn't, so you imagine that many strong firm would simply balk at the price and opt for the direct listing if they felt bullish enough about their market prospects. Perhaps it's more reasonable to compare SPACs and traditional IPOs, where there's a middleman taking a cut one way or another. SPACs seem like an inverted IPO to me pioneered in the current rather frothy environment, where there's more capital that wants to go into taking growth tech firms public than there are firms ready to take public, so they pre-allocate the dollar allocation into a blank check firm to streamline the process when a suitable target is found to expedite the process. The advantage here seems to be 1) time preference or 2) ease of taking firms public that otherwise would face challenges in being taken public in more traditional market conditions.

What am I missing here: "IPOs have been on a tear since last summer as markets rallied following the Federal Reserve’s moves to support the U.S. economy during the COVID-19 pandemic. Yet their popularity has been eroding as more companies choose to go public through mergers with special purpose acquisition companies (SPACs) or direct listings."

lmm 6y ago
That sentence is true but it's also kind of akin to "car popularity is declining as more people choose to use bicycles or trains" - bicycles and trains don't actually have much in common, and in many ways cars are more similar to either of them than they are to each other.
- dmingod666 6y ago
  Thanks! :)
Johnny555 6y ago
I think you're missing that SPACs are not the same as direct listings. That sentence didn't mean "...go public through SPACs, also known as direct listings", but it meant "...go public through either SPACs or direct listings". More info about SPACs vs direct listings here: https://jonathanhung.com/spac-vs-direct-listing-whats-right-for-your-startup/ https://jonathanhung.com/spac-vs-direct-listing-whats-right-...
yowlingcat 6y ago
There's a bit of nuance here in that outside IPOs, companies can go public both through either a SPAC or direct listing. However, a SPAC incurs a 20% sponsor fee that the direct listing doesn't, so you imagine that many strong firm would simply balk at the price and opt for the direct listing if they felt bullish enough about their market prospects. Perhaps it's more reasonable to compare SPACs and traditional IPOs, where there's a middleman taking a cut one way or another. SPACs seem like an inverted IPO to me pioneered in the current rather frothy environment, where there's more capital that wants to go into taking growth tech firms public than there are firms ready to take public, so they pre-allocate the dollar allocation into a blank check firm to streamline the process when a suitable target is found to expedite the process. The advantage here seems to be 1) time preference or 2) ease of taking firms public that otherwise would face challenges in being taken public in more traditional market conditions.