What do a health insurance company, a space tourism company, and an electric vehicle company all have in common? They’re all SPACs. And that’s not space with the letter “e” missing.
SPACs, short for “special purpose acquisition companies,” exist to acquire promising private companies and take them public on the stock market. They aren’t new but surged in popularity among investors in 2020. SPAC deals swarmed the stock market; over 200 went public, a giant 300% leap from 2019 and nearly matching traditional IPOs in aggregate deal sizes.