Special-purpose acquisition corporations, or SPACs, have develop into one among the hottest monetary market tendencies in latest months, with billionaires, celebrities and athletes racing to create the so-called blank-check companies.
Last 12 months noticed a file variety of listings utilizing SPACs, which generally elevate cash from buyers after which go looking for takeover targets.
As the trend continued into the early a part of 2021, RT’s Boom Bust talked to Tobin Smith of Transformity Research to discover the nature of SPAC-mania, which has captured Wall Street in latest months.
The knowledgeable says SPACs beforehand weren’t very fashionable, with solely about 20 corporations making the transfer over the previous 18 years.
“If you went SPAC, that meant that you couldn’t do an IPO,” Smith mentioned. “And then DraftKings came out and completely changed the game,” he added.
He recalled how the fantasy sports activities firm 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 know-how firm, thus forgoing the typical IPO course of.
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