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What are spacs...and should you invest?
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Wall Street has no shortage of curious acronyms, but here is one you have likely been hearing more and more of: SPACs.

Special Purpose Acquisition Companies have actually been around for decades, but are suddenly proliferating like, well, a global virus. Sometimes called “blank check” shell corporations, SPACs are designed to take companies public without going through the traditional IPO process.

In that way, they have something of a private equity or venture capital feel: You are handing your dollars over to an investor, with the ultimate aim of merging with a target firm within a couple of years.

“The search for the next great company is driving a lot of this,” says Cameron Stanfill, a senior analyst at data provider PitchBook. “People are using these vehicles to raise money and go public more quickly, and staking their reputations and skills as investors. The pace of activity in 2021 has definitely been surprising.”

The trend has involved some familiar names: Gaming site DraftKings, for instance, was acquired by a blank-check company formed by media executive Jeff Sagansky, and now lists on the Nasdaq. Firms like space tourism concern Virgin Galactic and electric vehicle maker Nikola Corp. also went public through the SPAC process.