118 THE US-ISRAEL | Legal Review 2025/26 billion. SPAC IPO terms also became more favorable for sponsors. Industries targeted by SPACs include artificial intelligence, space, cryptocurrency, quantum computing, and nuclear power. While the number of completed de-SPAC transactions continued to decline—43 deals with $38 billion in deal value, down from 73 deals and $42 billion in 2024—this largely reflects the decreasing pool of 2020 and 2021 vintage SPACs. Despite seeing higher-profile names enter the market (including Webull in 2025), de-SPAC activity continued to be challenged by high redemption rates and uneven post-listing performance. Nevertheless, a number of SPACs remain active and in search of targets heading into 2026, and SPACs and de-SPACs will likely continue to provide pathways to the public markets for small- and mid-cap issuers. Looking ahead, the outlook for 2026 is constructive. The IPO environment is expected to benefit from moderating inflation and anticipated interest rate relief. A significant backlog of “IPO-ready” companies are poised to access the market. Proceeds and deal volumes are expected to increase year over year, with the market anticipated to skew toward technology, potentially driven by artificial intelligence and fintech companies. The life sciences and biotech sectors could experience a resurgence as M&A activity recycles capital and stimulates investment. Digital assets and defense-focused companies are also emerging as notable themes. Continued political uncertainty and market volatility in the United States remain risks that could disrupt plans, and actions taken by the current administration, geopolitical developments, tariffs, and global decoupling may introduce additional execution risk. For Israeli companies, 2026 presents a particularly compelling opportunity. Israel’s strengths in technology, artificial intelligence, defense technology, and life sciences align closely with the sectors expected to drive US capital markets activity. Israeli companies in these high-growth industries are well-positioned to capitalize on strong investor appetite and favorable market conditions. De-SPAC transactions will continue to offer viable alternatives to traditional IPOs, particularly for small- and mid-cap issuers with innovative business models. As the US capital markets environment normalizes and investor interest in innovation-driven sectors intensifies, 2026 is positioned to be a takeoff year for Israeli companies seeking access to the world’s deepest and most liquid public markets. Benefits of Being a Foreign Private Issuer Israeli companies that access the US capital markets are subject to US federal securities laws. With the goal of making the US capital markets more attractive to foreign issuers, the Securities and Exchange Commission (SEC) makes available certain accommodations to alleviate some of the burdens of being a public company in the United States. Generally, to take advantage of these accommodations, an Israeli company must qualify as a foreign private issuer (FPI). FPIs benefit from more relaxed reporting requirements under SEC rules and regulations, including annual reporting on Form 20-F, exemption from Form 8-K current reporting requirements, exemption from US proxy rules, and flexibility to report financial statements under International Financial Reporting Standards (IFRS). In addition, the NYSE and Nasdaq provide more relaxed rules for FPIs, including certain rules related to stockholder approval for securities offerings, making access to capital potentially more streamlined. The regulatory landscape for FPIs is evolving, however. In June 2025, the SEC issued a concept release seeking public comment on whether to revise the definition of “foreign private issuer.” The release reflects concerns that many FPIs now trade predominantly or exclusively in US markets and may not be subject to meaningful home-country oversight—the premise underlying the FPI accommodations. Approaches under consideration include updating US ownership thresholds, adding foreign trading volume requirements, requiring listing “Following a strong recovery of the initial public offering (IPO) markets, and significant M&A and foreign investment in the Israeli technology sector in 2025, the stage is set for continued momentum in 2026.”
RkJQdWJsaXNoZXIy MjgzNzA=