After COVID, the elections, and what the fifth instalment of the Scream series will be called (hint: it’s not Scream 5), the topic getting the most attention from our readers is the ramp-up of SPACs, or special purpose acquisition companies.
By definition, these vehicles are publicly traded shell companies with investor cash as their only initial asset. The sponsors then have two years to merge with a target company before the vehicle would have to unwind and return the cash.
A creature of the 1990’s, SPACs were designed to help smaller businesses access public equity. After the tech bubble burst, and again following the Great Recession, the popularity of SPACs declined.
