Shaquille O’Neal has one, as does Serena Williams and former Speaker of the House Paul Ryan. What exactly are SPACs, the investment trend that’s grown popular among the wealthiest Americans during the pandemic?
SPACs— or special-purpose acquisition companies— are shells of companies whose purpose is to find a private company to buy and take public quickly. The result, at least ideally, is a huge payday for everyone involved. They are sometimes referred to as “blank check companies” because investors put up the money before an acquisition target is identified. Some in the finance world are concerned that the SPAC boom could be a bubble that is heading toward bursting.
So what are SPACs, what should you know about them, and where might this new trend be headed? We’re learning more on AirTalk. Comment below or call us with questions at 866-893-5722.
John Howe, professor of finance at the University of Missouri and the author of “The Foolish Corner: Avoiding Mind Traps in Personal Financial Decisions” (Stuart Charles Group, 2017). He also authors the newsletter "Behavioral New World."