Editorial Board

The SEC’s SPAC Rules Are Late But Still Needed

SPAC mania is already on the wane. But at least next time, investors will have a better sense of what they’re getting into.

April 7, 2022 at 12:00 PM UTC

By The Editorial Board

The Editorial Board publishes the views of the editors across a range of national and global affairs.

Wild times.
Photographer: Ore Huiying/Bloomberg

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Few phenomena illustrate the irrational exuberance of the early 2020s U.S. stock market like special purpose acquisition companies, or SPACs. Over the past few years, investors have entrusted hundreds of billions of dollars to these blank-check companies, in the hopes of getting a piece of exciting businesses about to be taken public — with amazingly little understanding of what they would actually receive or how much it would cost.

Last week, the Securities and Exchange Commission announced that it was stepping in to ensure investors have a better sense of what they’re doing. The question is whether it’s too little, too late.