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SPAC
(Special Purpose Acquisition Company)
A SPAC (Special Purpose Acquisition Company) is a "blank check" shell corporation that raises capital through an IPO to acquire a private company, taking it public without traditional IPO. SPACs surged in 2020-2021, peaking at $160 billion raised before regulatory crackdowns.
SPACs give target companies faster, more certain access to public markets but with higher dilution (typically 20% sponsor promote). After the IPO, SPACs have 18-24 months to find a target or return funds. Notable SPAC mergers include DraftKings and Lucid Motors. SEC now requires clearer fee disclosures and performance projections after many post-merger crashes (SPAC index fell 60% in 2022).
SPACs give target companies faster, more certain access to public markets but with higher dilution (typically 20% sponsor promote). After the IPO, SPACs have 18-24 months to find a target or return funds. Notable SPAC mergers include DraftKings and Lucid Motors. SEC now requires clearer fee disclosures and performance projections after many post-merger crashes (SPAC index fell 60% in 2022).