Remarks
The SPAC Party Gets Going in Europe, This Time With Better Terms
Learning lessons from the U.S., sponsors proceed cautiously to avoid the wrath of regulators.
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By now we all know just how U.S. investors went crazy for SPACs at the turn of the year, pumping $90 billion into the special purpose acquisition companies from December through February alone.
Blank-check companies raise money from investors in an initial public offering and then merge with a company that’s itself looking to go public. The targets get a wad of cash while avoiding the rigmarole of their own IPO. The method allowed a slew of companies to soar to multibillion-dollar valuations even though they had no revenue, from Richard Branson’s space tourism company Virgin Galactic Holdings Inc. to electric truck maker Nikola Corp.