SPACs

Extracted Attributes

Special-purpose acquisition company

A special-purpose acquisition company (SPAC; ), also known as a blank check company or a blind-pool stock offering, is a shell corporation listed on a stock exchange with the purpose of acquiring (or merging with) a private company, thus taking the private company public through a procedure which requires fewer regulatory filings and has fewer safeguards for investors than the initial public offering (IPO) process. According to the U.S. Securities and Exchange Commission (SEC), SPACs are created specifically to pool funds to finance a future merger or acquisition opportunity within a set timeframe; these opportunities usually have yet to be identified while raising funds. In the U.S., SPACs are registered with the SEC and considered publicly traded companies. The general public may buy their shares on stock exchanges before any merger or acquisition takes place. For this reason they have at times been referred to as the "poor man's private equity funds." The majority of companies pursuing SPACs do so on the Nasdaq or New York Stock Exchange in the US, although other exchanges, such as the Euronext Amsterdam, Singapore Exchange, and Hong Kong Stock Exchange have also overseen a small volume of SPAC deals. Despite the popularity and growth in the number of SPACs, academic analysis shows investor returns on SPAC companies post-merger are almost uniformly negative, although investors in SPACs and merged companies may earn excess returns immediately after the merger. Proliferation of SPACs usually accelerates around periods of economic bubbles, such as the "everything bubble" between 2020 and 2021.

Web Search Results

• Special Purpose Acquisition Company (SPAC) Explained

  ### Key Takeaways A special purpose acquisition company (SPAC) is formed to raise money through an initial public offering (IPO) to buy another company. At the IPO, SPACs do not have business operations or stated targets for acquisition. SPAC shares are structured as trust units with a par value of $10 per share. Investors in SPACs range from prominent private equity funds and celebrities to the general public. SPACs have two years to complete an acquisition, or they must return funding to investors. [...] SPACs are commonly formed by investors or sponsors with expertise in a particular industry or business sector, and they pursue deals in that area. SPAC founders may have an acquisition target in mind, but they don’t identify that target to avoid disclosures during the IPO process. SPACs provide IPO investors with little information before they invest, seeking underwriters and institutional investors before offering shares to the public. During the early 2020s SPAC boom period, they attracted prominent names such as Goldman Sachs, Credit Suisse, and Deutsche Bank, in addition to retired or semiretired senior executives.3 [...] Special purpose acquisition companies (SPACs) have no commercial operations. They are formed strictly to raise capital through an initial public offering (IPO) that it can then use to acquire or merge with another company. After a period of relative obscurity—they were most popular in the lead-up to the 2007–2009 financial crisis—SPACs had a remarkable resurgence in the early 2020s, with a record-breaking number of SPAC IPOs and mergers, before quieting down in the mid-2020s.1

• Special Purpose Acquisition Companies | SPAC Law - Goodwin

  Special Purpose Acquisition Companies (SPACs) are newly-formed companies that raise capital in an initial public offering (IPO) for the sole purpose of using that capital to acquire assets or, more typically, one or more companies identified after the IPO. SPAC IPOs have increased dramatically during the past four years (33 in 2017, 46 in 2018, 59 in 2019, and 248 in 2020), as operating companies, PE and VC firms, institutional investors and other constituents have recognized the advantages of combining with a SPAC to access the public markets and/or obtain liquidity. In 2019 and 2020, SPAC IPOs outpaced every other industry segment. SPACs can provide a variety of advantages over a traditional IPO or other liquidity alternatives, including:

• Special-purpose acquisition company - Wikipedia

  A special-purpose acquisition company (SPAC; /spæk/), also known as a blank check company or a blind-pool stock offering, is a shell corporation listed on a stock exchange with the purpose of acquiring (or merging with) a private company, thus taking the private company public through a procedure which requires fewer regulatory filings and has fewer safeguards for investors than the initial public offering (IPO) process. According to the U.S. Securities and Exchange Commission (SEC), SPACs are created specifically to pool funds to finance a future merger or acquisition opportunity within a set timeframe; these opportunities usually have yet to be identified while raising funds. [...] 1. ^ a b Domonoske, Camila (2020-12-29). "The Spectacular Rise Of SPACs: The Backwards IPO That's Taking Over Wall Street". NPR. Archived from the original on 2021-02-22. So what is a SPAC? A "special purpose acquisition company" is a way for a company to go public without all the paperwork of a traditional IPO, or initial public offering. In an IPO, a company announces it wants to go public, then discloses a lot of details about its business operations. After that, investors put money into the company in exchange for shares. A SPAC flips that process around. Investors pool their money together first, with no idea what company they're investing in. The SPAC goes public as a shell company. The required disclosures are easier than those for a regular IPO, because a pile of money doesn't [...] On January 24th, 2024, the SEC unveiled new rules for Special Purpose Acquisition Companies (SPACs), introducing clarifications to enhance regulatory transparency and integrity without significantly altering the existing framework. Critical updates include maintaining the current stance on SPACs under the '40 Act and the definition of banks as underwriters while refining the criteria for forward-looking statements by redefining "blank check company" and eliminating one safe harbor provision. Additionally, the SEC has encouraged more realistic management projections for DeSPAC transactions and required detailed disclosures on board votes and the dilutive impacts of compensation and securities issuances. These developments aim to enhance transparency and integrity within the SPAC ecosystem,

• SPACs have seen increased activity in 2025. Here's how they work

  During the IPO, investors buy into the SPAC without knowing the company it will acquire, which is why they’re frequently called “blank-check” companies. The money raised during the sale goes into a trust account and is untouched while the SPAC searches for a suitable private company to merge with.5 The SPAC generally has 18 to 24 months to identify and complete a merger. Once a potential acquisition is found, the two sides negotiate terms, publish detailed financial disclosures, and seek shareholder approval. If approved, the private company effectively “steps into” the listing and becomes a public company — a process called a de-SPAC, which typically takes 3 to 6 months.6 [...] Anyone following financial news this year may have noticed the term “special purpose acquisition companies,” or SPACs, popping up in the headlines. The investment vehicles — also known as blank-check companies — were back in force in 2025 after a few quiet years.1 SPACs are publicly traded shell corporations — with no underlying business — that raise money first and then search for a still-unnamed private company to acquire. When they find a target, the acquired private company assumes the SPAC’s stock listing, creating a faster route to going public than a traditional IPO.2 [...] ## Key takeaways SPACs are shell companies that raise capital first and acquire a private firm later. Investors can redeem shares for cash if they oppose a proposed merger, offering downside protection before a deal closes. SPAC activity rebounded in 2025, with tech-focused mergers leading the way. SPACs resurfaced in 2025 as an active route for private companies to reach public markets, driven by faster timelines and negotiated deal structures. Learn how they operate and differ from traditional initial public offerings (IPOs).

• SPACs: What You Need to Know - Harvard Business Review

  Leer en españolLer em português Post Buy Copies Special Purpose Acquisition Companies, or SPACs, are garnering a lot of attention lately in corporate boardrooms, on Wall Street, and in the media. And for good reason: Although SPACs, which offer an alternative to traditional IPOs, have been around in various forms for decades, 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 alone of 2021, 295 were created, with $96 billion invested. Then there’s this remarkable fact: In 2020, SPACs accounted for more than 50% of new publicly listed U.S. companies. Read more on Entrepreneurship or related topic Entrepreneurial financing