Traveloka halts talks on US listing via SPAC

Traveloka has reportedly dropped talks regarding going public in the United States via a merger with special purpose acquisition company (SPAC) Bridgetown Holdings Ltd. A source familiar with the matter told Bloomberg that the start-up giant’s board of directors decided to stop the listing process due to the ceasing enthusiasm in the SPAC market.

The source said that Traveloka may revisit talks with Bridgetown Holdings Ltd. or different SPAC companies if the market recovers. For the time being, the two parties will actively observe the market.

Traveloka in February announced its plan to go public via SPAC on Wall Street this year. 

SPAC or “blank check company” is basically a shell company listed on a stock exchange to acquire a private company, thus making it public without going through the traditional public offering route. The process usually takes two years and if the acquisition has not finished by the agreed deadline, the fund will be returned to the investor.

According to Bloomberg, of the $461 billion (Rp6 quadrillion) raised via initial public offering globally this year, $131 billion (Rp1.8 quadrillion) went to SPACs. However, the market trend is slowing down significantly. The SPAC trend peaked in March with 109 deals and plunged to 10 deals the very next month. 

The slowdown happened after the Securities and Exchange Commission issued accounting guidance that classifies SPAC warrants as liabilities instead of equity instruments. If the guidance becomes law, all existing SPACs will have to go back and recalculate their financials in 10-Ks and 10-Qs for the value of warrants each quarter.