The SPAC spectacle

摘要

SUSPEND YOUR disbelief. That seems to be what modern financial markets require of investors. GameStop, a tiny and humble retailer that was swept up in an online-trading mania earlier this year, is still worth $11bn. Digital animations are being sold through online tokens for millions of dollars. The stock of Doge-coin, a digital currency that was until recently considered to be a parody, is valued at almost $50bn. Crypto, meme-stocks, NFTS- each new financial fashion seems to bring its own terminology and the whiff of absurdity. Many investors would add to that list special-purpose acquisition companies (SPACS). They are an alternative way of taking firms public that bypasses the cumbersome initial public offering (IPO) process. The pace of deals has been furious. Between January and April some $100bn was raised through SPACS, many of which are now hunting for firms to buy. Some 84 companies have announced they will float via spac mergers so far in 2021, versus 123 using IPOS. The spac trend is a giant experiment with a different way to take firms public. And it is also a test of the firms involved, most of which have either been hidden away in private markets for years, or are so nascent that they are more concepts than companies.