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Matt Levine

Bill Ackman’s SPAC Will Be Three SPACs

Also some more AMC.

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Programming note: I said yesterday that there would not be a Money Stuff today, but there will be. Here it is.

The way a special purpose acquisition company works is that investors put money in a pot, and the sponsor of the pot goes out and looks for a company to merge with. When the sponsor finds a target company and does the merger, the target company gets the money in the pot, and the investors in the pot get shares of the target company. (The sponsor does too, as compensation for her target-hunting efforts.) Until then, the pot is invested in money-market securities. If the sponsor doesn’t find a target company, or if the investors don’t like the merger, they can get their money back with a tiny bit of interest.