Companies that raise money for buying businesses. The reason they’re known as blank-check companies as they generally don’t have a merger target when they are formed. It’s as if investors are giving the sponsor of the SPAC a blank check to use as she sees fit.
SPACs raise money through an initial public offering that sells shares and warrants in a bundled unit usually at $10. SPACs usually have 24 months to identify and complete an acquisition. If investors of the SPAC dislike a planned purchase, they get to sell their shares but keep the warrants. That gives them the possibility of an upside even in transactions they opt out of, if a merger goes better than they expected. That combination is seen as making SPACs a safe bet especially during turbulent markets. Once the business combination is completed, the acquisition target becomes a public company.
The first recorded listing