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Spacs: The Hottest Thing About Capital Markets


Empty wallets investing in startups have long been considered an American phenomenon. Now the so-called Spacs are coming to Germany. A boom with risks.

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The German premiere 13 years ago ended in disaster, after which nothing came for a long time - but now, in times of ultra-low interest rates and excessive liquidity, Spacs are the hottest thing on the capital markets.

The acronym stands for Special Purpose Acquisition Company: listed companies that collect capital from investors and promise to spend the money mostly within two years on taking over a company.

The target company then slips into the previously empty Spac shell and can save the laborious journey to the stock exchange.

In the USA, where the Spacs have been around for a long time, investment vehicles have experienced a real boom.

Almost every third IPO on the Nasdaq in 2020 was a SPAC.

The technology exchange registered 237 new Spacs, raising $ 79.8 billion, averaging $ 337 million.

A blatant increase: in 2019, 59 quick IPOs only brought in $ 13.6 billion, or $ 230 million per Spac.

Now the Spacs are also electrifying investors in Germany.

But experts warn of risks and side effects.

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Source: spiegel

All business articles on 2021-02-26

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