SPACs drag health tech down – Axios
Well being tech shares are hemorrhaging, Based mostly on Rock Well being, which found that publicly commerced digital health securities plummeted 38% between The start of Q3’21 and The prime of Q1’22.
Why it issues: It is no secret that The general public markets have been risky, however A…….
Well being tech shares are hemorrhaging, Based mostly on Rock Well being, which found that publicly commerced digital health securities plummeted 38% between The start of Q3’21 and The prime of Q1’22.
Why it issues: It is no secret that The general public markets have been risky, however As in contrast with the S&P 500 — which dropped simply 5% over The identical interval — this tumble clearly stands out.
Between the (downward] strains: A quantity of elements are contrihowevering to health tech’s poor public efficiency — particularly SPACs.
- On common, the inventory worth of the 31 digital health corporations that went public after 2020 dropped 55% from The start of Q3’21 to The prime of Q1’22.
- Of these corporations, Greater than half (17) acquired here public by way of SPAC, and their shares over The identical interval retreated A imply of 57%.
Flashback: Well being corporations that went public earlier than 2020 noticed shares fall simply 17% on common over The identical interval, comparatively mirroring the efficiency of the Nasdaq Biotech Index, Based mostly on Rock Well being.
Be smart: It is not as if SPACs outdoors the health tech sector carried out swimmingly, both.
- In accordance to SPAC Insider, fintech corporations that SPACked in 2021 misplaced A imply of 40% in worth As a Outcome of the day of their first commerce.
What they’re saying: “In an optimistic market, SPAC provides contrihowevere to — or maybe are A mirrored picture of — investor pleasure, however in occasions of cautious buying and promoting, wariness pervades,” Rock Well being researchers Adriana Krasniansky and Pavan Shah write.
- As one enterprise banker put it, the market bounces “…….
Source: https://www.axios.com/pro/health-tech-deals/2022/04/18/spacs-drag-on-health-tech-stocks