Definition
A SPAC is a publicly traded company created solely to raise capital and acquire a private company, taking it public without a traditional IPO. SPACs raise money through their own IPO, then have 2 years to find and merge with a target. Investors can redeem shares if they don't approve the merger.
Example
A SPAC raises $300M in its IPO, then merges with a private electric vehicle company, taking it public through the 'de-SPAC' process.
FAQ
What is SPAC (Special Purpose Acquisition Company)?
A shell company that raises capital through IPO to acquire a private company.
Why is SPAC (Special Purpose Acquisition Company) important?
SPAC (Special Purpose Acquisition Company) helps investors evaluate IPO and make more informed decisions.