The Spactacular boom on Wall Street

IT IS EASYSPACSPACSPACSPACIPOIPOSPACSPAC to mock s. For decades these “special purpose acquisition vehicles”, publicly listed pots of capital raised by investors who seek out private firms to merge with, have ushered a small number of flaky and irrelevant companies onto public markets. The present boom on Wall Street began last year and, true to form, features celebrities-on-the-make, failed bosses looking for redemption and credulous investors keeping their eyes wide shut. Yet it is undeniable that something more serious is also now taking place. The amount of money raised by s in the past 12 months has soared to over $120bn, according to Bloomberg. In a few weeks this year as much has been raised as in the first half of 2020. The boom is spreading to Europe, and Amsterdam is racing ahead of London as a favoured venue (see ). Serious companies are getting involved, too. Two of Asia’s leading digital firms, Gojek and Tokopedia, are said to be considering using a to list in New York, which would be an alternative to a conventional initial public offering ().In an a firm hires bankers who help it sell shares at an agreed price to mainly institutional investors in an elaborate process set out by regulators. The approach turns that on its head. A group of investors float a shell company, giving it a pot of cash. It then hunts for an unlisted target firm and offers to merge with it, raising a second round of cash from investors as it does so. If you are a firm that wants to go public, a marriage with a is relatively quick and certain.