For a while there, it seemed that the SPAC boom had run out its string. Then came Donald Trump.
Let’s start with first principles. SPACs, or special purpose acquisition companies, are shell companies that collect funds from investors on the expectation that they’ll find a private company to merge into within a given period of time, usually 24 months.
It is never a good idea to invest in a SPAC just because someone famous sponsors or invests in it or says it is a good investment.
Securities and Exchange Commission
The wrinkle is that the SPAC doesn’t have a target in mind at the outset, so these are the blindest of blind pools.
The SPAC boom built through 2020 and through the first quarter of this year, peaking at some 300 deals in that quarter alone.
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