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Finance: SPACs

This guide lists eBooks and databases with information related to finance.

Special Purpose Acquisition Company

What Is a Special Purpose Acquisition Company (SPAC)?

A special purpose acquisition company (SPAC) is a company that has no commercial operations and is formed strictly to raise capital through an initial public offering (IPO) for the purpose of acquiring or merging with an existing company. Also known as "blank check companies," SPACs have been around for decades, but their popularity has soared in recent years. In 2020, 247 SPACs were created with $80 billion invested, and in just the first quarter of 2021, a record $96 billion1 was raised from 295 newly formed SPACs. By comparison, only two SPACs came to market in 2010.


A special purpose acquisition company (SPAC) is formed to raise money through an initial public offering (IPO) to buy another company.
At the time of their IPOs, SPACs have no existing business operations or even stated targets for acquisition.
Investors in SPACs can range from well-known private equity funds and celebrities to the general public.
SPACs have two years to complete an acquisition or they must return their funds to investors.


Quoted from:
Young, J. (2021, October 16). Special Purpose Acquisition Company (SPAC). Investopedia


Blank Check Company

What Is a Blank Check Company?

A blank check company is a publicly-traded, developmental stage company that has no established business plan. It may be used to gather funds as a startup or, more likely, it has the intent to merge or acquire another business entity. Blank check companies are speculative in nature and are bound by Securities and Exchange Commission Rule 419 to protect investors.


Blank check companies do not have established business plans.
This type of company is often used to gain funds, with the plan to merge with or acquire another business.
SPACs are a type of blank check company.


Quoted from:
Scott, G. (2021, September 29). Blank Check Company. Investopedia.