SPAC Stocks are looking like the trend right now($FMCI,$LCA,$OPES)

[CricPokChic]

What Is a Special Purpose Acquisition Company (SPAC)?

A special purpose acquisition company (SPAC) is a company with no commercial operations that is formed strictly to raise capital through an initial public offering (IPO) for the purpose of acquiring an existing company. Also known as "blank check companies," SPACs have been around for decades. In recent years, they've gone mainstream, attracting big-name underwriters and investors and raising a record amount of IPO money in 2019.

KEY TAKEAWAYS

• A special purpose acquisition company is formed to raise money through an initial public offering to buy another company.
• At the time of their IPOs, SPACs have no existing business operations or even stated targets for acquisition.
• Investors in SPACs can range from well-known private equity funds to the general public.
• SPACs have two years to complete an acquisition or they must return their funds to investors.

How a SPAC Works

SPACs are generally formed by investors, or sponsors, with expertise in a particular industry or business sector, with the intention of pursuing deals in that area. In creating a SPAC, the founders sometimes have at least one acquisition target in mind, but they don't identify that target to avoid extensive disclosures during the IPO process. (This is why they are called "blank check companies." IPO investors have no idea what company they ultimately will be investing in.) SPACs seek underwriters and institutional investors before offering shares to the public.

 

The money SPACs raise in an IPO is placed in an interest-bearing trust account. These funds cannot be disbursed except to complete an acquisition or to return the money to investors if the SPAC is liquidated. A SPAC generally has two years to complete a deal or face liquidation. In some cases, some of the interest earned from the trust can be used as the SPAC's working capital. After an acquisition, a SPAC is usually listed on one of the major stock exchanges.

 

Advantages of a SPAC

Selling to a SPAC can be an attractive option for the owners of a smaller company, which are often private equity funds. First, selling to a SPAC can add up to 20% to the sale price compared to a typical private equity deal. Being acquired by a SPAC can also offer business owners what is essentially a faster IPO process under the guidance of an experienced partner, with less worry about the swings in broader market sentiment.

 

SPACs Make a Comeback

SPACs have become more common in recent years, with their IPO fundraising hitting a record $13.6 billion in 2019—more than four times the $3.2 billion they raised in 2016. They have also attracted big-name underwriters such as Goldman Sachs, Credit Suisse, and Deutsche Bank, as well as retired or semi-retired senior executives looking for a shorter-term opportunity.

 

Examples of High-Profile SPAC Deals

One of the most high-profile recent deals involving special purpose acquisition companies involved Richard Branson's Virgin Galactic. Venture capitalist Chamath Palihapitiya's SPAC Social Capital Hedosophia Holdings bought a 49% stake in Virgin Galactic for $800 million before listing the company in 2019.

 

With the recent success of NKLA...Many wanted to find the next SPAC with potential.

Recent run ups: NKLA,DKNG,SHLL

Few that I identified below:

1)FMCI

Info and potential about this SPAC:

https://mailchi.mp/transformityresearch.com/fmcitattooedchefreport

2)LCA

Info and potential about this SPAC:

https://insiderfinancial.com/landcadia-golden-nugget-tilman-fertitta/180078/

3)OPES

Info and potential about this SPAC:

https://www.restaurantbusinessonline.com/financing/opes-acquisition-paying-100m-burgerfi

This is not investment advise.I just shared my knowledge on these.Do ur due diligence and research. Don't blindly buy without research or u will get burnt.

Let me know if u find it interesting and useful.

[CricPokChic]

[CricPokChic]

Popular spacs right now:
$FMCI

$LCA

$SHLL

$GRAF

$INSU

$NFIN

$OPES

[CricPokChic]

Bought $FMCI on the slight dip today avg  $16.5...Will hold until the merge happens with tattooed chef  in Q3....

[MaZA]

3 hours ago, CricPokChic said:

Bought $FMCI on the slight dip today avg  $16.5...Will hold until the merge happens with tattooed chef  in Q3....

$LCA is this good?