(Bloomberg) -- It’s exactly what skeptics of the boom in special purpose acquisition companies have been warning about.

ATI Physical Therapy Inc., in its earnings debut as a public company following a merger with a blank-check firm, revised its revenue projections sharply lower and disclosed larger-than-expected staff turnover. But the surprises went far beyond that.

“The release also lacked a share count, a balance sheet, a cash flow statement or, for that matter, a good defense for why the company’s original guidance (which was officially maintained up until yesterday) ever made sense,” Michael Petusky at Barrington Research wrote in a report. “We are shocked by what has unfolded at ATI.”

ATI’s shares closed Tuesday at $3.82, down 54% over the span of two days and ranking it among the worst-performing companies to have gone public via a SPAC, according to data compiled by Bloomberg. Before its earnings, the Bolingbrook, Illinois-based rehabilitation services company had five buy ratings and zero calls to sell with an average price target of $13, Bloomberg data show.

By day’s end, at least five law firms from coast-to-coast had published press releases urging investors who had lost money to contact them for their securities fraud investigations.

SPACs, which sell shares to raise money and hunt takeovers, can offer private companies a path to markets without the rigorous scrutiny of a traditional initial public offering. That’s prompted a chorus of warnings from financial professionals in recent months that the flood of new SPACs were creating conditions for deals with unsustainable valuations and questionable disclosures. While most mergers have so far held up, steep declines like ATI’s underscore the risks and may force sponsors to do more thorough diligence.

Private equity firm Advent International owns about 62.9% of ATI, according to filings, and is now facing a paper loss of about $800 million. It agreed in February to take ATI public through a merger with Fortress Value Acquisition Corp. II, a SPAC sponsored by Fortress Credit, an arm of Fortress Investment Group LLC.

Spokespeople for Advent and Fortress declined to comment.

Fortress itself is facing paper losses of about $54 million, including the $9 million in invested capital it injected to form the SPAC, according to people with knowledge of the matter. It was among participants in the private investment in public equity, or PIPE, that supported the transaction.

It has had success with other SPAC transactions, including MP Materials Corp., a rare earths producer which closed Tuesday at $36.04.

“Companies that go public via a SPAC tend not to have the stable, predictable business models than those that would go public via a traditional initial public offering,” said Greg Martin, a managing director at Rainmaker Securities, which facilitates secondary transactions for private companies. “Investors may begin to have less faith in companies that go public via a SPAC, and the quality of the SPAC sponsor is going to become increasingly important.”

Most SPACs raise capital at $10, a price that’s often used as a benchmark. Lordstown Motors Corp., the electric vehicle maker that tumbled after cutting full-year production expectations, closed Tuesday at $6.59. Hycroft Mining Holding Corp. has fallen to $2.27, Waitr Holdings Inc. has slipped to $1.59 and Ucommune International Ltd. ended Tuesday at $1.22.

ATI’s SPAC transaction gave the combined entity a market capitalization of $2.075 billion as of June 17, a figure that more than halved to $792 million as of Tuesday’s close. The company operates about 900 physical therapy clinics across 25 U.S. states.

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