Cohen & Company's SPAC Machine Grinds On, But the Market Punishes the Stock
Q2 investment-banking revenue surges on de-SPAC activity, yet the shares have halved in 90 days as investors question the sustainability of a deal-fee-driven earnings spike.
COHN · Earnings Call · 2026-08-03
A Strong Quarter, Buried Under a Falling Stock
Cohen & Company (COHN) delivered a solid Q2. Net income attributable to shareholders rose to $3.6 million, more than double the prior quarter, and adjusted pretax income jumped to $10.1 million from $4 million. The engine was the boutique investment bank, Cohen & Company Capital Markets (CCM), which pushed CCM business revenue to $54 million. "We are pleased to deliver another solid quarter, driven by continued strong performance in our full-service boutique investment bank Cohen & Company Capital Markets and its expertise in SPAC and de-SPAC transactions," said CEO Lester Brafman on the call. Yet the market isn't buying it. The stock is down 39.7% over the past 90 days and sits 51.8% below its April 17 high. The full history is brutal: a -81.3% lifetime return since 2010, with repeated drawdowns. After the earnings release, the shares continued to slide, suggesting investors are focused on the sustainability of this SPAC-driven earnings spike rather than its level.The Market's Skepticism
The quarter's strength was clearly deal-driven. CFO Joe Pooler noted: "We closed five SPAC IPOs, a number of de-SPACs. Some of the consideration that we received from prior deals in terms of warrants and units that the CCM business takes as part of its upfront consideration moved up in value because the related deals either signed business combination agreements, or in two cases, actually closed business combination agreements immediately subsequent to the quarter end." The business combination with Elroy Air is a key milestone, and the $230 million IPO of Columbus Circle Capital Corp. III post-quarter adds to the pipeline. But the company also forfeited placement units on the Elroy Air deal — a reminder that these transactions carry real costs that aren't always visible in the headline revenue. The prior call laid out a strategic ambition to diversify: "Our top two priorities in 2026 are expanding our investment bank, expanding our footprint, getting more verticals, and not being as dependent on the SPAC product." That dependency remains heavy, and the market likely sees little progress on that front. The 90-day tape pattern — a single downward move with no bounce — suggests the market is pricing in either a peak in SPAC activity or a failure to diversify.We remain confident in our ability to execute our strategic priorities and continue driving progress as we enhance long-term value for our stockholders.