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everything exploded. Well, let's talk to Mike Ryan about it. Mike's CEO of Bullet Point Network. Mike previously was a partner and co head of Global Equities at Goldman Sacks, also an investment committee member at the Harvard Endowment. It's good to have you with us, Mike. How are you great? Jim, thanks for having me. I should know you're also a board chair of the Alpha Partners Technology Merger Corporation. We

want to talk spacks here, Uh is it? I mean, we we saw a lot of spacks being pulled and we're still right now seeing you know, pretty much each and every week a spack that has been announced, come out and say no, we're not going to do it, or we're gonna return money to shareholders, or we're not

going to acquire that target company. What's going on with SPACs? Well, Look, I think the market overall for growth stocks has been very challenging, as you've been talking about here for days and weeks, with more than half of the Nasdaq stocks down more than from their highs, and all kinds of public well known established companies like Netflix and Zoom, also other high profile I p o s, Lemonade, cors Era

all down about from their highs. So it's pretty natural that the stack market, which is primarily catered to growth companies and emerging early stage growth companies in particular, is also down overall. I think it's really a story of growth stocks, um you average, I PO down, the average back down. Investors don't like losing money, and I think

we need to uh let the market settle. We need to make sure that the companies that come to market through this back product or otherwise are the right companies at the right prices. So what does due diligence look like They're when you're trying to suss out you know what are the right companies and what is the right price for that company? Yeah, that's a great question, Katie. UM. There are a lot of private companies that you probably know.

There's about eleven and fifty private unicorns, you know, valued it more than a billion dollars. Most of them aspire to be public, and I think over the next three to five years, uh, you'll see many many companies come public. When we look at a business right now, we're looking for the same old fashioned basic things that have always been important to us. We're looking for a great business. We're looking for something that has differentiated products, come petitive

mode around it, and is run by trustworthy and competent management. Ultimately, what we think it's all about is growth and profitability. I think what happened last year in the broad equity market as well as in the I p O market, as well as in this back market is um people really lost discipline on profitability and a lot of companies that had no clear path to profitability uh came into the public market. And I think, Uh, that's probably not going to happen again soon. I think there are companies

that are clearly burning capital and investing in their future. UM. But they need to have real credible path to profitability in order to be well embraced in today's market. And so I think what we're looking for our great companies run by great management with growth and profitability outlooks that we can get behind and that investors will like. And then you have to bring it out a price that makes sense for the market. What is the advantage of

doing as back in the environment. Well, again, I think the many companies want to be public, and they want to be public because they want to have a merger currency to do M and A transactions. They want to have a stock option currency to attract and retain and motivate their team and be able to have a competitive addetace. Why not just go public, you know, through a traditional I p O or a direct listing. Well, I think

you'll see a lot of all the above. Um, you know, last year there were many I p o s regular way i p O s. This year they've only been I think forty one, and only about twenty of them have been twenty million dollars or more in the regular way I p O market. And so with I p O s, traditional i p O s essentially down about as much as stacts. You know, I think the stack market down a p O market on average, down forty

six month end. They've been a handful of direct listings, some of them, you know, the averages, they don't matter because it's only a handful of them there down more than so you really have a phenomena where growth stocks, especially cash burning companies that don't have a clear path to profitabilities have sold off. And I think that's happening for public stocks that have been outstanding for years, it's

happening for I p o s, and it's happening for spacts. So, Mike, I mean, does your view of the spack market sort of have to be predicated on the trajectory for growth stocks then well, I think the majority of companies that are looking at going public in any format, including in spacts, need and want capital as well as that public currency

that I mentioned earlier. I think growth companies are generally the majority of I p o s. And you know, technology in particular, I think has had a massive positive effect on the world and as a big enormous segment now of the stock market. So I think you'll you'll imagine that a lot of the I p O s will continue to be technology, health care, other segments of growth. But you're certainly seeing spacts and non spact transactions in

you know, materials, industrials. Obviously, energy is a very hot sector now in the public markets and elsewhere with oil prices as far as they are. So you'll see things of all types, but the predominance of ideo activity has been in growth companies, and most of the growth companies have been in technology and health care. So, Mike, what's attractive to you as board chair of the Awful Partners Technology Merger Corporation. Well, we're looking for companies that have

that special characteristic. They have growth, they have paths of profitability, they're run by great management. And you know, frankly, we're lucky because we have a lot of options out there that fit that bill. We also need companies even in this even in this environment, there are a lot of options. There are. Indeed, um companies have stopped wanting to go public and uh and again, I think over the next three to five years you'll see a lot of ideas

and a lot public listings for these companies. I mean, one of the great things about the US capital markets is with the broadest, deepest pool of money in the world and having successful public listings is going to continue. You've had so far a year to date. I think I just read the worst start to a year since nineteen sixty two. So the stocking really under pressure now. And so I've seen this before. You know, we saw this in you know nineteen the I P. O market

closed completely for a time. We obviously saw this after the dot com uh and so you're just seeing normal volatility and you're seeing a decline in volumes. But I think for the right companies at the right prices, they'll still want to go public and Stack to be part of that, all right, Mike Ryan, We're gonna have to

leave it their CEO of bullet Point Now. We're also a board chair at the Alpha Partners Technology Merger Corporation, talking Stacks that is going to do it for Bloomberg Business Week on behalf of the Katie Greifeld, I'm Tim Stanivik. A big thank you from the entire team here at Bloomberg Radio. This is Bloomberg