Money Makers Mentor

The Looming Tug-of-War Between SPACs and IPOs

When going public, many companies must decide which method of listing to pursue. While 2021 has been a year filled with initial public offerings (IPOs), special purpose acquisition companies (SPACs) have also taken the investment banking industry by storm. To better understand the differences between the two, you must understand the definitions and requirements of each.

What is an SPAC?

SPACs are undertakings that are purely established for acquiring another existing company. They don’t enter into any kind of mercantile transactions. These blank check companies raise money through IPOs which are subsequently used for acquiring an operating company. Instead of listing its shares directly, the acquired company is a publicly-traded company via the SPAC merger. SPACs are not only commo…

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