SPACs Return: Natural Story Formation

By Alex Gavrish, SPAC Index; author of “Story Investing”

Recently we have noticed an increase in the SPACs market. SPAC is an acronym for Special Purpose Acquisition Company. It is a black-check company that conducts an IPO and raises capital. The purpose of SPAC is to effect a merger or acquisition with an operating business. For example, if the target of SPAC is a private company, by merging with SPAC vehicle it becomes public.

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Historically, SPACs were a small and opaque niche of the market. Many of them performed unsatisfactory. Some hedge funds used to focus on a technical or arbitrage-type of...