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As an Investor, You Should Know What a SPAC Is

by Fred Fuld III
If you haven’t heard the term SPAC, as an investor, you should at least be aware of what it is. SPAC stands for Special-Purpose Acquisition Company, which is a company created specifically to pool funds in order to finance a merger or acquisition opportunity within a set timeframe, usually two years.
SPACs are sometimes referred to as corporate shells or blank-check companies. They have no operations but go public with the intention of merging with or acquiring a company with the proceeds that were raised from the SPAC’s initial public offering. The SPACs are currently sold in $10 units which includes of one share of common stock and one or more out of the money warrants or a fraction of a warrant. The units, stocks, and warrants usually start trading on either the NYSE or NASDAQ.
Probably the most famous SPAC (which no one remembers the original name of but most remember the new name after the merger) was Social Capital Hedosophia (former symbol: IPOA). This is the company that merged with Richard Branson’s Virgin Galactic (SPCE), the space travel company.
The most recent SPAC transaction hitting the news is the merger of the SPAC called Diamond Eagle Acquisition Corp. (DEAC) with DraftKings (DKNG), one of the world’s largest daily fantasy sports contest and sports betting provider.
Here are a list of SPACs that have announced mergers:
SPACSymbolBuyingBusiness
8i Enterprises Acquisition Corp.JFKDiginexblockchain
Act II Global Acquisition Corp.ACTTMerisantsugar substitute
Arya Science Acquisition Corp.ARYAImmaticscancer immunotherapies
Diamond Eagle Acquisition Corp.DEACDraftKingsfantasy sports
Far Point Acquisition CorporationFPACGlobal Blueairport sales tax refund kiosks
Gordon Pointe Acquisition Corp.GPAQHOF VillagePro Football Hall of Fame
KBL Merger Co. IVKBLMCannBioRx Life Sciencesbiotech
Legacy Acquisition Corp.LGCBlue Valordigital marketing
Leisure Acquisition Corp.LACQGateway Casinosgambling
Monocle Acquisition CorporationMNCLAerSaleAviation Aftermarket
Mudrick Capital Acquisition CorporationMUDSHycroft Mininggold & silver
Nebula Acquisition Corp.NEBUOpen Lendingautomotive finance
Proficient Alpha Acquisition Corp.PAACLion Financial Groupfinancial services
Pure Acquisition Corp.PACQHighPeak Energyoil & gas
VectoIQ Acquisition Corp.VTIQNikolazero emissions trucks
Wealthbridge Acquisition LimitedHHHHScienjoyChina streaming video
Although the SPACs are a way of getting an early investment in currently private companies, they do carry risk.
Happy investing!
Disclosure: Author didn’t own any of the above at the time the article was written.


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