Short sellers are coming for SPACs.
Investors who bet against stocks are targeting special-purpose acquisition companies, one of the most popular growth areas on Wall Street. The dollar worth of bearish bets against shares of SPACs has more than tripled to about $2.7 billion from $724 million at the start of the year, according to information from S3 Partners.
Some of the stocks under attack belong to big SPACs that surged in recent months, in part due to the fact that they were backed by high-profile financiers. IV, a SPAC produced by former financial investment lender Michael Klein that is merging with electric-vehicle startup Lucid, more than doubled in March to about 5%.
Others are wagering against business after they integrate with SPACs. Muddy Waters Capital LLC announced last week it was betting against XL Fleet Corp., a fleet electrification company that went public in December after combining with a SPAC. XL has since said Muddy Waterss report, which alleged XL inflated its sales pipeline and made misleading claims about its technology to name a few issues, had “many errors.”.
XLs stock rate dropped the day Muddy Waters released its report by about 13%, to $13.86, from its previous close on March 2. Shares closed Friday at $12.79.

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