Finance: SPACs

Special purpose acquisition companies, or SPACs, have been around in various forms for decades, but during the past two years they’ve taken off in the United States. In 2019, 59 were created, with $13 billion invested; in 2020, 247 were created, with $80 billion invested; and in the first quarter of 2021 alone, 295 were created, with $96 billion invested. In 2020, SPACs accounted for more than 50% of new publicly listed U.S. companies. SPACs are publicly traded corporations formed with the sole purpose of effecting a merger with a privately held business to enable it to go public. Compared with traditional IPOs, SPACs often offer targets higher valuations, greater speed to capital, lower fees, and fewer regulatory demands. Despite the investor euphoria, however, not all SPACs will find high-performing targets, and some will fail. Many investors will lose money. As an investment option they have improved dramatically, especially over the past year, but the market remains volatile. More changes are sure to come, which means that sponsors, investors, and targets must keep informed and vigilant. This article is not a blanket endorsement of SPACs. It is simply a guide for businesspeople considering a move into this rapidly evolving (and for many, unfamiliar) territory. [ABSTRACT FROM AUTHOR]

The article focuses on American billionaire businessman Tilman Fertitta. Topics include his restaurant chains and his ownership of the Golden Nugget casino, his ownership of the basketball team the Houston Rockets, and how he became wealthier during the COVID-19 pandemic due to the utilization of special purpose acquisition companies (SPACs).

The article focuses on special purpose acquisition companies (SPACs). The author discusses the history of SPACs as "blank-check companies" started in the 1980s, examines how companies such as Archer Aviation have successfully utilized SPACs, and explores the warnings about SPACs from the U.S. Securities and Exchange Commission.

In September 2005, three former Apple Computer executives launched a new high-tech venture called Acquicor Technology (Acquicor). Acquicor raised $172.5 million in its March 2006 IPO on the American Stock Exchange. Although the amount Acquicor raised in its initial offering was unremarkable for a high-tech company with a prominent management team, Acquicor was anything but a typical high-tech venture. At the time of its IPO, Acquicor had minimal earnings and assets, no employees, and no business operations. Acquicor did not even have a business plan other than to "acquir[e] ... one or more operating businesses." While these traits would mean certain failure for a traditional startup company, Acquicor's successful offering is an archetype of an increasingly popular investment vehicle: the Special Purpose Acquisition Company (SPAC).