SPACs’ 1% Rate Assumptions Fuel Investor Doubts Over Credibility

As special purpose acquisition companies come under growing scrutiny, one basic calculation that was off the mark for some of them is calling into question all other projections: the interest income the companies said they expected to earn on their cash.

At least nine SPACs, including some tied to billionaire William P. Foley II and Apollo Global Management, have indicated since April 2020 that they anticipated earning 1% or more on the cash they raised before spending it on acquisitions. That’s roughly 10 times the average yield over the past year on Treasury bills, the ultra-safe securities where ...