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SPACs: “They’re finding themselves in situations where they’re not ready for prime time"

Nicola White of Bloomberg highlighted the trials and tribulations of a few of our favourite Special Purpose Acquisition Companies (SPACs) today. Read more here:

 Bloomberg article on SPACS citing Bedrock

Our CEO, Kris Bennatti is quoted in the article, saying “They’re finding themselves in situations where they’re not ready for prime time,” referring to the ongoing troubles with accounting and reporting at these newly public companies.

The companies discussed in the Bloomberg piece have frequently been flagged by our algorithms. Our software identifies red flags in SEC filings that are predictive of downside risk. In addition to our equity research portal, we also curate some of the most interesting flags in regular emails to our customers.

In December we wrote:

VIEW INC ($VIEW): VIEW is not in compliance with NASDAQ listing requirements because their audit committee does not have at least three independent directors. VIEW had to retrospectively restate their financials in Q1 2021 and has filed two NT 10-Qs while they investigate the accounting for a warranty accrual.

Since December, VIEW's stock price has decreased dramatically from ~$4 per share to ~2 per share. As discussed in the Bloomberg article, VIEW subsequently published another NT 10-K filing (notification of non-timely filing) and got into even worse hot water with the NASDAQ and finally issued a notification of restatements.

Many of the companies mentioned in the Bloomberg piece have filed NT filings. NT forms are submitted when a company is unable to file it's annual or quarterly statements on time. NT filings often precede price declines. Hudson Labs' research portal facilitates NT filing screening.

NT filings shown on Bedrock AI's portal

Here's a twitter thread discussing some of the NT filers mentioned:

Twitter thread discussing some of the NT filers

There's another reason that some of the SPACs mentioned were flagged on our platform. We provide auditor relationship mapping to our customers. For example, Tattoed Chef's previous audit partner ($TTCF recently switched from Marcum to BDO) was the auditor for over 30 SPACs in fiscal year 2020.

Interested in exploring auditor relationships? Send us a note here.

Interested in exploring SPAC disclosure more generally? We now facilitate filtering by SPAC in our company screening tool.

Bedrock AI screening tool with SPAC filter

To continue the conversation about SPACs, red flags and SEC filings, follow us on Twitter and subscribe to our free newsletter, Dirty Laundry.


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