Navigation Capital Cancels Four SPAC Deals as Industry Cools

Investment firm Navigation Capital Partners has canceled plans for four new special purpose acquisition companies (SPACs) in less than 24 hours, part of a trend of investors souring on blank check companies.

As Bloomberg News reported Friday (April 22), regulatory filings show Navigation will not proceed with plans for Navigation Capital Acquisition VI, VII, VIII and IX. The goal had been to raise $150 million on each of the four deals.

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Investors in one of the companies had included Lawrence Mock and David Panton. Lonnie Johnson – who invented the Super Soaker” water gun – was chief executive of one company, while Super Bowl champion Jerome “the Bus” Bettis served on the board of another.

Bloomberg notes that this brings the week’s total of aborted SPAC filings to seven, the second largest wave of canceled blank check mergers since mid-March when 11 filings were puled. This year has seen 56 SPACs – with the goal of raising more than $16 billion – called off so far.

The report says that bigger banks that have handled SPACs in the past have walked away from the sector in part due to uncertainty over proposals from the U.S. Securities and Exchange Commission (SEC) and as shares of companies that complete their mergers have dwindled.

This year has seen 58 SPACs go public, compared to more than 850 in the previous two years. The first two months of 2021 saw 250 blank check firms go public.

See also: SEC: Investors Can Sue Over Inaccurate SPAC Forecasts

Last month, the SEC said it plans to propose cutting back some of the legal protections SPACs have used to make fantastical statements about the firms they take public. It’s part of a broader collection of SPAC rules that would allow investors to sue over inaccurate SPAC forecasts.

SEC Chair Gary Gensler has repeatedly voiced concerns about SPACs, and said last month his agency is investigating a number of issues, such as disclosure inconsistencies and how investors are informed about fees.