Odd Lots Why Blank Check Companies Are The Hottest Thing This Year
Sep 10, 2020
Kelly Driscoll, a board director at Fusion Acquisition Corp and a seasoned expert from State Street Global Advisors, sheds light on the current SPAC boom. She discusses the surge of Special Purpose Acquisition Companies as an appealing alternative to traditional IPOs, attracting big names like Bill Ackman and Paul Ryan. The conversation also covers the complexities of the SPAC process, including investor behavior and the importance of management trust. Driscoll explains how recent market conditions have bolstered interest and redefined opportunities in the SPAC landscape.
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SPACs and Market Trends
- SPACs, special purpose acquisition companies, raise money publicly to acquire private companies.
- Historically associated with questionable deals and speculative booms like the pre-2008 period.
SPAC Resurgence
- SPACs offer an alternative to traditional IPOs, especially during volatile market periods like those affected by the coronavirus and election uncertainty.
- Regulatory changes in 2011 and 2017 facilitated SPAC growth and listings on major exchanges.
SPAC Investing Basics
- Invest in SPACs at $10 per unit, typically including a share and a fraction of a warrant.
- Investors can redeem shares if they dislike the acquisition, offering downside protection.