The U.S. IPO market has continued its strong resurgence in 2026. According to the latest IPO statistics compiled by Benjamin P. Edwards, Associate Dean for Faculty Development and Research and Professor of Law at the William S. Boyd School of Law at the University of Nevada, Las Vegas (UNLV), and his research team, IPO activity through August reflects a robust issuance environment featuring a mix of traditional operating company IPOs, direct listings, and a surprisingly strong return of SPAC offerings.

The SPAC resurgence is particularly noteworthy because it follows a period in which many de-SPAC companies struggled to meet the optimistic projections that helped fuel the prior SPAC boom. And, while sponsors are once again launching blank-check companies, courts continue to issue significant rulings arising from de-SPAC transactions completed during the 2020-2021 SPAC boom.

As discussed below, the latest IPO data and the continuing litigation arising from the de-SPAC transaction that took Electric Last Mile Solutions (ELMS) public illustrate two sides of the SPAC story: the resurgence of SPAC issuance as a capital-markets vehicle and the enduring D&O liability risks left in the wake of the prior SPAC boom.

According to Edwards’ dataset, there were 260 public-market offerings and listings through August 2026, consisting of 99 operating-company IPOs, 142 SPAC IPOs, 18 direct listings, and one closed-end fund IPO. Excluding direct listings and the closed-end fund, SPACs represented 142 of 241 IPOs, or approximately 59%, meaning SPAC offerings outnumbered traditional operating-company IPOs by more than 40%. The report also highlighted several prominent offerings, including the IPOs of SpaceX and SK Hynix, as well as a higher-than-expected number of direct listings.

The 18 direct listings completed through August 2026 stand out given that direct listings have historically represented only a small fraction of companies entering the public markets. However, recent academic data indicates that many direct listings completed since 2022 have involved microcap issuers rather than the large, well-capitalized companies traditionally associated with the format. As a result, the increase appears to reflect activity among smaller issuers seeking an alternative path to the public markets rather than a broad migration away from the traditional IPO model.

In addition, the jurisdictional data revealed a stark divide between operating-company IPOs and SPAC formations. While 144 of the 241 IPO issuers (60%) were domiciled in the Cayman Islands, that figure was driven almost entirely by SPACs, as 133 of the 142 SPAC IPOs (94%) were Cayman-based. By contrast, 64 of 99 operating-company IPOs (65%) were incorporated in Delaware, confirming Delaware’s continued dominance among traditional IPO issuers despite the Cayman Islands’ lead in overall deal count.

Even so, Delaware’s dominance was not absolute. Edwards’ data shows that Texas generated the largest amount of IPO capital raised in 2026, a result driven substantially by SpaceX. The data also reflects continued interest in alternative incorporation jurisdictions, particularly Texas and, to a lesser extent, Nevada, consistent with the broader debate over corporate domicile that has emerged in recent years.

ELMS and SPAC Long Litigation Tail

Few cases better illustrate the enduring litigation consequences of SPAC transactions than the ongoing litigation involving ELMS. As readers may recall, in February 2022, The D&O Diary reported on the federal securities class action lawsuit filed against ELMS after the company disclosed the resignations of its CEO and Chairman, the need to restate financial statements, and the Special Committee’s findings concerning pre-merger equity transactions.

ELMS went public in June 2021 through a merger between electric vehicle startup Electric Last Mile, Inc. and Forum Merger III Corp., a SPAC that completed its IPO in August 2020. The transaction, announced in December 2020 and valued at approximately $1.4 billion, was promoted using optimistic projections regarding vehicle production, customer demand, and the company’s ability to achieve positive cash flow.

In November 2021, ELMS formed a special committee to investigate equity transactions involving co-founders Jason Luo and James Taylor. On February 1, 2022, the company disclosed that the investigation had identified discounted pre-merger equity purchases requiring financial statement restatements and announced the resignations of both executives. ELMS subsequently disclosed an SEC investigation, its auditor resigned, and the company filed for Chapter 7 bankruptcy in June 2022. Stockholders filed a Delaware fiduciary duty action on October 14, 2022, alleging that SPAC investors were deprived of the ability to make a fully informed redemption decision because of misleading disclosures.

Litigation involving the ELMS de-SPAC transaction remains active more than five years after the merger was announced. In a January 27, 2026, ruling, the Delaware Court of Chancery denied the SPAC financial advisor’s motion to dismiss, finding that plaintiffs had adequately alleged that the investment bank may have knowingly participated in the underlying fiduciary breaches by preparing or assisting with investor and board presentations that allegedly contained misleading statements concerning production capacity, workforce levels, and financial projections.

Discussion

Perhaps the most striking aspect of the 2026 IPO data is the resurgence of SPAC formation. More than 140 SPAC IPOs occurred through August 2026, despite, like ELMS, well-documented disappointments that followed many transactions completed during the prior SPAC cycle.

Recent decisions involving Lion Electric (February 2026), GigCapital2 (March 2026), and View (April 2026) further demonstrate that disputes arising from de-SPAC transactions completed during the boom years remain active and continue to generate significant judicial decisions. The ELMS litigation provides another illustration of this phenomenon. More than five years after the transaction was announced and more than four years after the company’s bankruptcy filing, the Delaware courts are still addressing claims arising from the merger.

Taken together, these cases suggest that SPAC-related litigation has proven to have a remarkably long tail. What may have initially appeared to be a temporary wave of deal litigation increasingly looks like a developing body of Delaware fiduciary duty jurisprudence. A recurring theme in many of these cases is the allegation that investors were deprived of the ability to make a fully informed redemption decision because of misleading projections, undisclosed conflicts, or incomplete disclosures. Those theories continue to survive dismissal motions and remain a meaningful source of exposure for transaction participants.

As the ELMS litigation illustrates, de-SPAC litigation exposure may extend well beyond a SPAC’s directors and officers. In its January 2026 ruling, the Delaware Court of Chancery allowed aiding-and-abetting and unjust-enrichment claims against the SPAC’s financial advisor, to proceed. From an underwriting perspective, the ruling highlights how de-SPAC claims can expand beyond the traditional D&O defendants, creating the potential for prolonged, multi-party litigation and significant defense expense.

Notably, the latest IPO data shows that nearly 94% of the SPAC IPOs completed in 2026 were organized in the Cayman Islands. The concentration is striking. According to Cayman Finance, Cayman-domiciled SPACs accounted for approximately 61% of all U.S. IPOs completed through the middle of 2026, reflecting what it characterizes as a structural shift toward Cayman as the preferred jurisdiction for blank-check companies. Sponsors have increasingly favored Cayman structures because of the jurisdiction’s tax-neutral framework, flexible corporate law regime, and longstanding role in cross-border capital-markets transactions.

The shift toward Cayman could have significant litigation and insurance implications. As The D&O Diary has previously observed, U.S. courts have shown a willingness in certain circumstances to retain jurisdiction over disputes involving Cayman-organized companies. Cayman incorporation may therefore influence the governing law and procedural framework applicable to future SPAC-related claims, but it may not insulate sponsors, directors, officers, or other transaction participants from U.S. litigation exposure. The evolving interplay between Cayman corporate law, U.S. securities laws, and fiduciary duty claims will be an important area to watch as this new generation of SPACs moves through the market.

Nevertheless, D&O and professional lines underwriters evaluating today’s robust SPAC opportunities, may want to remember that liability issues generated during the last SPAC cycle remain very much alive. As continuing litigation demonstrates, SPAC-related exposures can produce substantial defense costs and prolonged litigation years after a transaction closes, with potential claims extending beyond directors and officers to financial advisors and other transaction participants involved in the deal.