Despite the shrinking size of the special purpose acquisition company (SPAC) market, speculative patterns of abnormally sharp swings in prices at the start of trading have intensified. In particular, as the merger success rate has fallen to nearly half, concerns have grown about liquidation losses for investors who bought SPACs at high prices.
According to the Financial Supervisory Service's "SPAC market investment white paper" on the 22nd, the intraday high average on the first day of trading for 25 newly listed SPACs last year was 4,067 won. That is an increase of more than 103% from the offering price (2,000 won) and a renewed rise compared with the average first-day high of 4,052 won the previous year.
In particular, SPAC share prices repeatedly surged and plunged on their first day of listing. In fact, the average closing price of newly listed SPACs last year was tallied at 2,227 won. After listing at an offering price of 2,000 won, shares rose to as high as 4,067 won on day one before falling back to around the offering level by the market close.
SPAC share prices are normally expected to track the offering price. That is because at the time of listing a SPAC is a shell company that does not conduct business and holds only cash-like assets. The Financial Supervisory Service (FSS) noted it was a "speculative pattern unrelated to valuation."
Overall indicators of the SPAC market are deteriorating. In 2025, there were 25 newly listed SPACs (270.4 billion won based on offering proceeds), a 37.5% decrease in count from the previous year (40). The share of SPAC offering proceeds within the overall IPO market also shrank to 5.7% last year from 13.4% in 2023.
Merger success rates also plunged. The number of SPACs that succeeded in mergers totaled 15, down 11.8% (2 cases) from the previous year. In particular, the number that failed to merge and were delisted was 24, up 200% (16 cases) from the previous year. The merger success rate was 35.8%, the lowest in the past five years.
The Financial Supervisory Service (FSS) said SPACs were sidelined as blue-chip corporations favored traditional listings over SPAC mergers amid a booming stock market. The "aging" of SPACs that failed to find merger targets also deepened, with 43.6% of SPACs pursuing mergers as of the end of 2025 entering their second full year.
Even when mergers succeed, it is hard for investors to profit. For issues that reached nine months after successful mergers last year, share prices fell an average of 26.6%, with 85.7% of them declining. Looking at the five-year average, share prices were shown to have declined an average of 31.8% four years after mergers.
Financial authorities plan to begin institutional reforms to restore the soundness of the SPAC market. For now, they will expand consumer alerts to strengthen guidance for individuals and other investors on what to watch when investing in SPACs. They also plan to further toughen reviews of SPAC disclosure documents.
An official at the Financial Supervisory Service (FSS) said, "The SPAC system was introduced in 2009 to help overcome a slump in the initial public offering market and has been used over the past 16 years as a key funding tool for corporations," adding, "We will continue to explore ways to develop SPACs more rationally by referring to overseas cases."