SPAC
MarketsDefinition
Special Purpose Acquisition Company. A shell company that IPOs to raise cash, then has 18-24 months to find and acquire a private operating company (the "de-SPAC"). The target instantly becomes public, sidestepping the traditional IPO process.
Boomed in 2020-2021 then collapsed in 2022-2023 as performance disappointments and SEC scrutiny mounted. Median post-merger SPAC stock has lost 40-60%. Notable winners: DraftKings, Virgin Galactic; many losers including Lordstown, Nikola.
Boomed in 2020-2021 then collapsed in 2022-2023 as performance disappointments and SEC scrutiny mounted. Median post-merger SPAC stock has lost 40-60%. Notable winners: DraftKings, Virgin Galactic; many losers including Lordstown, Nikola.