January of 2022 was just about the worst time for a company to go public, and it was all the more painful for companies that made their trading debuts through once-hot special-purpose acquisition companies, or SPACs.
Dave, a fintech app that issues small-dollar advances to consumers, learned the hard way. It merged with a SPAC sponsored by Victory Park Capital on Jan. 6, 2022. The stock proceeded to lose 97% of its value over the next 12 months, partly due to Russia's invasion of Ukraine, rapid inflation, and rising interest rates -- and partly because anything touched by SPACs became toxic to investors. A year after its initial public offering, with the stock trading at 29 cents, Dave's board approved a 1-for-32 reverse stock split to avoid getting delisted from Nasdaq.
"It was kind of the perfect storm," says Devin Ryan, an analyst at Citizens.
Plenty of companies from the postpandemic SPAC boom had similar falls from grace. Dave, however, has engineered a rare post-SPAC merger comeback. The company turned profitable in 2024, grew sales 40% in 2025, and climbed above its SPAC merger share price earlier this year. Even after a post-earnings selloff on Thursday, the stock is up 65% in 2026, and most analysts rate it a Buy.
Dave has had one of the best runs of any company that went public during the post-Covid SPAC boom, outperforming prominent examples like DraftKings and SoFi Technologies.
Yet the Dave story is a cautionary tale for investors, especially with a new wave of SPAC offerings on the horizon. SPACs often represent a quick ramp onto public markets, but they can make for a bumpy road once the company gets there.
Even after the recent rally, Dave shares have trailed the S&P 500 since they began trading.
When Dave went public, merger sponsor Victory Park Capital had $254 million in shareholder funds lined up, and the parties had secured around $200 million in private investment led by Tiger Global Management.
But the actual capital wasn't guaranteed. Investors in a blank-check company can sell shares before a merger is completed. In Dave's case, investors redeemed 88% of shares, cutting that $254 million to less than $10 million after closing costs and depriving newly public Dave of its expected proceeds.
Victory Park, which declined to comment for this article, continues to hold a seat on Dave's board.
Tiger's shares, meanwhile, had no traditional lockup period. The firm went on a selling spree as the broad market started to turn, unloading its entire Dave stake by the end of the third quarter, securities filings show. Tiger didn't respond to Barron's requests for comment.
Dave shares dipped to penny-stock territory by June and stayed there -- not adjusting for the stock split -- for almost two years. Dave was in particularly troubled territory since it hadn't developed a deep bench of institutional investors through the typical IPO recruitment, or roadshow, process.
"We were being told by basically every person that it wasn't a solvable problem," says Jason Wilk, Dave's CEO. "Even if you wanted to invest in the business, there was so little liquidity in the stock that you couldn't even come in."
Dave wasn't alone. The shares of the 300 companies that went public via SPACs in 2021 and 2022 dropped an average of 64% in the stock's first year and about 70% over three years, according to data from University of Florida professor Jay Ritter.
"SPACs certainly all got painted with the same brush, for good reason," says Andrew Jeffrey, an analyst at William Blair. "They're designed to enrich the initial investors at the expense of public market investors."
Dave's early claim to fame was seed funding from billionaire investor Mark Cuban. Cuban told Barron's he had funded one of Wilk's previous ventures and rolled over the investment because he likes Wilk as a CEO. He had some advice when the pair met in late 2023, with the stock at its nadir: "Forget about the investor base, just build the business," Wilk recalls Cuban saying.
Dave's core product is ExtraCash, which the company positions as an alternative to overdrafts, credit cards, and payday loans. Users link their bank account and apply for up to $500 in cash in exchange for a 5% fee, a monthly subscription of up to $5, and some optional add-ons. The average advance size is $215.
Dave doesn't charge traditional interest or do credit pulls. Instead, its underwriting model, dubbed CashAI, analyzes cash flows from the user's linked bank account to assess credit risk. It then recoups the money when a deposit hits the user's account.
CashAI's predictive power improved over time, analysts explain, helping to minimize losses and maximize cash-advance sizes.
The company broke even for the first time in the fourth quarter of 2023, then built on that momentum with a $34.2 million profit in the first quarter of 2024.
Investors took notice and short sellers had to cover their positions, Wilk explains. By May 2024, the stock had soared 1,000% from its all-time low.
Dave's next challenge could be more existential. After a referral from the Federal Trade Commission, the Justice Department sued the company and Wilk in December 2024, alleging Dave misled customers through deceptive advertising.
Dave enrolled ExtraCash users in a monthly subscription without proper disclosure, the Justice Department has alleged. Among other allegations, it says the company rarely offered the advertised $500 and used a since-eliminated payment structure that encouraged customers to pay "tips" on top of their monthly fee. The case is awaiting trial in the U.S. District Court for the Central District of California.
Wilk says Dave acted lawfully and that the facts would bear that out in court. The company noted in a recent annual report that the lawsuits against it "could involve significant monetary costs and have a material impact on the Company's business, financial results and operations."
There is no national regulatory framework for the kind of overdraft product Dave provides, says Alan Kaplinsky, senior counsel at Ballard Spahr, which has no role in the ongoing case.
If deemed a traditional loan, ExtraCash's interest would exceed many state, local, and Military Lending Act limits. The city of Baltimore and a class of individual users sued Dave in separate cases on those grounds last year, with Baltimore citing examples of rates that routinely exceed 1,000%, well above the state limit of 33%. The lawsuits follow a widespread crackdown on payday loans over the past two decades.
Wilk says interest caps aren't designed for the company's short-duration financing.
In 2025, the Center for Responsible Lending found in an analysis of Dave and four other direct-to-consumer loan apps, including EarnIn and Cleo, that heavy users paid an average of $421 in combined fees in their first year.
Such costs, the authors wrote, "can push financially vulnerable workers even further behind."
Dave, which argues its fees are much lower than overdraft charges from banks, now has three million members making transactions every month. Nearly a third of Americans live paycheck to paycheck, according to the Bank of America Institute.
The state of the economy probably helps Dave, says Jeffrey, the William Blair analyst. Unemployment remains low, so users get predictable paychecks that Dave can bridge. But lower-income families are also feeling the crush of grocery and gas prices -- two primary ways members use ExtraCash.
Those dynamics may be contributing to Dave's growth. The company's revenue grew 60% in 2025 to $554 million, and its operating margin expanded to 34% from 10%. Analysts expect growth of 31% in 2026, with a 38% operating margin.
Wilk says Dave can adapt to different economic realities. If unemployment balloons, for example, average credit amounts may fall, but more people will need short-term cash, he says.
Years after their Covid-era boom, SPAC offerings are creeping back.
More than 140 special-purpose acquisition companies went public last year in search of a target company to take over their listing, the most since 2021, according to Ritter. Another 62 went public in the first quarter of 2026.
But one of the SPAC boom's few success stories knows all about the pitfalls. In hindsight, Wilk acknowledges that Dave's SPAC merger left the company without the institutional backing from investors and banks that may have saved a traditional public offering.
Most SPACs of that era were destined for failure -- speculative businesses taken public by speculative financing vehicles. Dave survived because of its fundamentals, but the stock has still underperformed the S&P 500 despite years of hypergrowth. It continues to trade at a discount to peers like Klarna Group, SoFi, and Affirm Holdings.
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