Are SPACs a Smart Investment Option for 2022?

SPACS or special acquisition companies are becoming a popular way to raise money. It is a unique and innovative concept that, on the surface, doesn’t seem to make sense.

This article will answer the question, what is a SPAC, and offer the pros and cons of the method as we see them.

A SPAC is a company that raises money from investors to acquire another company. They are typically listed on an exchange and have a board of directors and management team.

What is a SPAC?

The first Special Purpose Acquisition Company was created in 1993 by Bill Ackman, Pershing Square Capital Management founder.

SPAC History

SPACs have two years to find a target company or return the money to investors (including retail and institutional investors).

How Do They Work?

They are easy to access for many investors since you do not need special qualifications like passing through accredited investor status.

Pros of Investing in SPAC

They are highly speculative investments since there isn’t much known about their assets after finding another company or business to buy out.

Cons of Investing in SPAC

Albertsons Companies, Inc. (ABS) is an American supermarket chain formed in 2006 by the merger of Albertsons and Safeway.

Examples of Some Well-Known SPACs