SPACs drag health tech down – Axios

Well being tech shares are hemorrhaging, Based mostly on Rock Well being, which found that publicly commerced digital health securities plummeted 38% between The start of Q3’21 and The prime of Q1’22.

Why it issues: It is no secret that The general public markets have been risky, however A…….

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Well being tech shares are hemorrhaging, Based mostly on Rock Well being, which found that publicly commerced digital health securities plummeted 38% between The start of Q3’21 and The prime of Q1’22.

Why it issues: It is no secret that The general public markets have been risky, however As in contrast with the S&P 500 — which dropped simply 5% over The identical interval — this tumble clearly stands out.

Between the (downward] strains: A quantity of elements are contrihowevering to health tech’s poor public efficiency — particularly SPACs.

  • On common, the inventory worth of the 31 digital health corporations that went public after 2020 dropped 55% from The start of Q3’21 to The prime of Q1’22.
  • Of these corporations, Greater than half (17) acquired here public by way of SPAC, and their shares over The identical interval retreated A imply of 57%.

Flashback: Well being corporations that went public earlier than 2020 noticed shares fall simply 17% on common over The identical interval, comparatively mirroring the efficiency of the Nasdaq Biotech Index, Based mostly on Rock Well being.

Be smart: It is not as if SPACs outdoors the health tech sector carried out swimmingly, both.

  • In accordance to SPAC Insider, fintech corporations that SPACked in 2021 misplaced A imply of 40% in worth As a Outcome of the day of their first commerce.

What they’re saying: “In an optimistic market, SPAC provides contrihowevere to — or maybe are A mirrored picture of — investor pleasure, however in occasions of cautious buying and promoting, wariness pervades,” Rock Well being researchers Adriana Krasniansky and Pavan Shah write.

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