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
-
Why it might be time to switch your pension strategyYour pension strategy may need tweaking – with many pension experts now arguing that 75 should be the pivotal age in your retirement planning.
-
Beeks – building the infrastructure behind global marketsBeeks Financial Cloud has carved out a lucrative global niche in financial plumbing with smart strategies, says Jamie Ward
-
Why it might be time to switch your pension strategy
Your pension strategy may need tweaking – with many pension experts now arguing that 75 should be the pivotal age in your retirement planning.
-
Beeks – building the infrastructure behind global markets
Beeks Financial Cloud has carved out a lucrative global niche in financial plumbing with smart strategies, says Jamie Ward
-
Saba Capital: the hedge fund doing wonders for shareholder democracyActivist hedge fund Saba Capital isn’t popular, but it has ignited a new age of shareholder engagement, says Rupert Hargreaves
-
Silver has seen a record streak – will it continue?Opinion The outlook for silver remains bullish despite recent huge price rises, says ByteTree’s Charlie Morris
-
Investing in space – finding profits at the final frontierGetting into space has never been cheaper thanks to private firms and reusable technology. That has sparked something of a gold rush in related industries, says Matthew Partridge
-
Star fund managers – an investing style that’s out of fashionStar fund managers such as Terry Smith and Nick Train are at the mercy of wider market trends, says Cris Sholto Heaton
-
Affordable Art Fair: The art fair for beginnersChris Carter talks to the Affordable Art Fair’s Hugo Barclay about how to start collecting art, the dos and don’ts, and more
-
Three promising emerging-market stocks to diversify your portfolioOpinion Omar Negyal, portfolio manager, JPMorgan Global Emerging Markets Income Trust, highlights three emerging-market stocks where he’d put his money
