Categories
Business

What is a SPAC? RT’s Boom Bust digs into the hottest trend on Wall Street

Author: RT
This post originally appeared on RT Business News

What is a SPAC? RT’s Boom Bust digs into the hottest trend on Wall Street

Special-purpose acquisition companies, or SPACs, have become one of the hottest financial market trends in recent months, with billionaires, celebrities and athletes racing to create the so-called blank-check firms.

Last year saw a record number of listings using SPACs, which commonly raise money from investors and then go hunting for takeover targets.

As the trend continued into the early part of 2021, RT’s Boom Bust talked to Tobin Smith of Transformity Research to explore the nature of SPAC-mania, which has captured Wall Street in recent months.

READ MORE: Coinbase IPO ‘monumental’ for crypto industry but has fueled kind of frenzy that ‘never ends well’ – investor Mike Novogratz

The expert says SPACs previously weren’t very popular, with only about 20 companies making the move over the past 18 years.

“If you went SPAC, that meant that you couldn’t do an IPO,” Smith said. “And then DraftKings came out and completely changed the game,” he added.

He recalled how the fantasy sports company and bookmaker went public after merging with Diamond Eagle Acquisition, a SPAC with a market capitalization of roughly $ 500 million, and SBTech, a betting and gaming technology company, thus forgoing the typical IPO process.

For more stories on economy & finance visit RT’s business section

Newslanes Media

By Newslanes Media

Newslanes.com is the leading e-news platform for the latest breaking news of world today. Newslanes auto aggregates and gather popular stories, business news, tech releases and much more for free for everyone. The news repository targets everyone after factual and well-researched information provided by trusted sources. All content and material belongs to their respective sources.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.