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SPAC 1: What is SPAC? Should you invest in SPAC?

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Video by Eric Seto, CPA via YouTube
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SPAC 1: What is SPAC? Should you invest in SPAC?

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Full name: Special Purpose Acquisition Company
A SPAC is a shell company that goes to the stock market for the sole purpose of a reverse merger
Reference: https://venturebeat.com/2021/07/24/auroras-spac-merger-comes-amid-self-driving-car-delays/

A SPAC is a shell company that goes to the stock market for the sole purpose of a reverse merger
It has no business or operations. Sometimes it’s called a “blank check” company, because investors are basically trusting its owners to make a good acquisition without knowing in advance which company it will be. Once the merger is made, the SPAC’s name is changed to that of the acquired company.
IPOE to OPEN

Benefits:
A SPAC relieves the complexities of the IPO process, the road show, and the pre-IPO scrutiny.
This is popular with companies that are going public WITHOUT a working business model or WITHOUT a product.
It’s like going IPO with a good idea.

Pre-tax income: $10 million to $100 million in the last 3 years
Global market capitalization: $500 million
Most recent 12 months revenue: $100 million
Aggregated cash flow for the last 3 years: $25 million
Total asset: $75 million
Reference: https://venturelawcorp.com/listing-requirements-of-the-new-york-stock-exchange/

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