In the two years since the office-sharing company’s failed IPO, a new way to launch a stock on Wall Street has become fashionable: SPACs.
Special purpose acquisition companies have been embraced by big institutions and small-pocketed investors alike.
The goal is to use those millions of dollars to take a private company public without using the traditional initial public offering process that’s been around for decades.
Management has a financial incentive to find an acquisition target — most often management receives a 20% stake in the newly public company.
An exchange-traded fund consisting of SPACs and companies taken public through SPAC acquisitions, the Defiance Next Gen SPAC fund, jumped 55% between early November and mid-February.