26 May, 2021

Would you invest in SPACs?

I know investors have made a ton of money doing this lately but it just seems a little scammy to me. It’s like a back door to an IPO without all the scrutiny and regulatory protections. I’m still studying this phenomenon.

For private companies, SPACs offer a streamlined alternative to initial public offerings. A SPAC initially raises money in its own public offering and lists its shares on a stock exchange. After that, it uses the war chest to hunt for a private company to merge with. If it finds a deal, the private firm takes the SPAC’s listing on the exchange and becomes a public company.

Wall Street Journal
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About : Kevin Bae

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