A little over a year ago, we discussed in this newsletter the SPACs—companies without a defined business that serve as a shell to take companies public without having to go through the process of an initial public offering. These “blank-check” companies were all the rage in the market. The situation has changed radically. Many of these vehicles are selling for less than what investors paid for them, and their promoters are facing a more skeptical market.

The decline in risk appetite and the drop in “value” stocks explain the decline in SPACs. The De-SPACindex, which measures the performance of companies that went public through these entities, had fallen 62% from the start of the year through mid-June, more than doubling the S&P’s decline, according to Businessweek magazine.