DiscoverCoinDesk Podcast NetworkBREAKDOWN: SPACs 101... A Bubble, the Future or Both?
BREAKDOWN: SPACs 101... A Bubble, the Future or Both?

BREAKDOWN: SPACs 101... A Bubble, the Future or Both?

Update: 2020-07-27
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A primer on, and critical look at, one of Wall Street’s hottest trends: special purpose acquisition companies. 

This episode is sponsored by Bitstamp and Crypto.com.

Special purpose acquisition companies have been around since the 1990s, but have seen a significant uptick in popularity in recent years. Companies like Virgin Galactic, Draft Kings and Nikola have changed SPAC’s reputation from a tool for second- and third-tier private equity shops to win fees to a legitimate alternative to initial public offerings. In 2020, SPACs have made up roughly 40% of the IPO market.

Recently, chatter around SPACs reached a fever pitch with the listing of Bill Ackman’s Pershing Square Tontine Holdings - the largest-ever SPAC. 

In this episode, NLW breaks down:

  • What a SPAC is
  • Standard SPAC terms 
  • Why the traditional IPO process has generated growing discontent, especially from Silicon Valley
  • The benefits of SPACs for companies and investors
  • The downsides of SPACs for companies and investors 
  • A number of reasons explaining why SPAC popularity is surging now
  • How Robinhood retail traders are creating an important bridge buyer for SPACs
  • Why Ackman’s Tontine Holdings SPAC could change how we think about SPACs in the future 
  • Are SPACs a bubble?


Cited resources:

SPAC Man Begins - Alex Danco

SPACs as a Call Option on Hype - Bryne Hobart

SPACs: the most ludicrous bubble we’ll ever see… why not $IAC? - Yet Another Value Blog

Return of the SPAC - John Street Capital

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BREAKDOWN: SPACs 101... A Bubble, the Future or Both?

BREAKDOWN: SPACs 101... A Bubble, the Future or Both?