The US SPAC (special purpose acquisition company) boom is coming to Europe, says Matthew Field in The Daily Telegraph. Also known as “blank-cheque companies”, SPACs are shell firms that list on the stockmarket in order to raise cash. They then use the money to merge with another company. SPACs provide an alternative route to a public stockmarket listing that can be more straightforward than the traditional initial public offering.
The latest SPAC boom started with Richard Branson’s Virgin Galactic space business, which went public through an $800m SPAC in 2019, says Field. Once confined to the US tech scene, European start-ups are now in the crosshairs too: UK electric-vehicle business Arrival is listing on the Nasdaq through a $660m SPAC. New SPAC vehicles are being launched in Frankfurt and Amsterdam.
SPACs allow business founders to bypass “sharp-suited investment bankers” on the way to a public listing, says The Economist. Yet while some SPACs are led by “excellent management teams”, many “don’t know the first thing” about the sectors they are investing in, says an unnamed investment banker. Around 250 SPACs launched last year in the States, raising $83bn. In January, “an average of five were created each working day”. The SPAC boom is a symptom of the “wider exuberance” currently gripping world markets.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Average pension pot by region – how do your retirement savings compare?Making sufficient savings for retirement is critical to ensure you can enjoy your later years without too many financial worries, but new data suggests some are saving far more than others. We look at the average pension pot by region.
-
Could colour diamonds add a sparkle to your portfolio?Diamonds of various shades never go out of fashion, says Chris Carter
-
Could colour diamonds add a sparkle to your portfolio?
Diamonds of various shades never go out of fashion, says Chris Carter
-
Okta: an undervalued cybersecurity playOkta provides vital security services and appears cheap considering AI’s growing prominence
-
Should you invest in Pakistan – the Vietnam of South Asia?Opinion If Pakistan is now serious about reform, it’s time for investors to buy, says Maryam Cockar
-
Why it pays to invest in family firms – and how to buy inIt makes sense to invest in family firms. Here are some of the best to buy now
-
'Why you must own gold and Bitcoin'Opinion The world is dedollarising, and gold and Bitcoin are the only alternatives. Buy now, says Dominic Frisby
-
8 of the best properties for sale with mountain viewsThe best properties for sale with mountain views – from an Arts & Crafts house with holiday lets in the Carding Mill Valley in Shropshire to a highland lodge with wood-burning stoves near the Rogie Falls in the Scottish Highlands
-
'Where to find the world’s hidden gems offering durable growth and value'Opinion Joe Bauernfreund, chief executive officer and chief investment officer, AVI Global Trust, highlights three businesses where he'd put his money
-
What are wealth taxes and would they work in Britain?The Treasury is short of cash and mulling over how it can get its hands on more money to plug the gap. Could wealth taxes do the trick?
