Ticketing platform SeatGeek and black-check firm RedBall Acquisition Corp. decided to terminate their $1.35 billion take-public deal amid a roller-coaster market.
The move was a result of current unfavorable market conditions, particularly impacting growth technology companies, according to SeatGeek and the SPAC backed by Billy Beane of the Oakland Athletics as well as Brooklyn Nets star Kevin Durant.
"Given the volatility in the public markets, together, we determined that a termination of the business combination was in the best interest of all parties," SeatGeek CEO and co-founder Jack Groetzinger said in a statement. "We have a tremendous amount of respect for the great team at RedBall and appreciate their partnership throughout the process."
The oversaturated SPAC market is continuing to get crushed, as speculative stocks with little earnings fall further out of favor in the face of rising rates. This SeatGeek merger joined a growing number of deals that were abandoned in the tough environment, including Forbes' $630 million deal with former Point72 executive Jonathan Lin-led SPAC Magnum Opus.
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SPACs stand for special purpose acquisition companies, which raise capital in an initial public offering and use the cash to merge with a private company and take it public, usually within two years. The market enjoyed a record year with more than $160 billion raised on U.S. exchanges in 2021, nearly double the prior year's level, according to data from SPAC Research.
After a year of issuance explosion, there are now almost 600 SPACs searching for an acquisition target, according to SPAC Research. As the market gets increasingly competitive, some announced deals failed to come to fruition.
CNBC's proprietary SPAC Post Deal Index, comprised of SPACs that have completed their mergers and taken their target companies public, has tumbled more than 40% this year.
Goldman Sachs as well as some other big banks are scaling back their business in the SPAC market as a regulatory crackdown worsened the outlook for the space.