Andrew Ross Sorkin on the SPAC boom

In Wall Street’s usually brash way, a new saying is making the rounds. It isn’t in good taste, but it speaks to a phenomenon that is transforming finance and corporate America. 

“I know more people who have a SPAC than have Covid,” several financiers have told me recently. (If you’re wincing, you’re not alone. I am, too.) 

SPAC stands for special purpose acquisition company, the biggest thing in financial markets of the moment. Hundreds of these publicly traded shell companies are being created by everyone from KKR, the leveraged-buyout firm, to Alex Rodriguez, the baseball player turned entrepreneur. Just on Tuesday, the football player Colin Kaepernick filed for his own $250 million SPAC. 

These vehicles have only one purpose: to find a private company and buy it, usually within two years. SPACs are sometimes known as "blank check" companies — as in, investors give them a blank check to go buy a business, sight unseen.

~ Andrew Ross Sorkin, "Wall Street’s New Favorite Deal Trend Has Issues," The New York Times, February 10, 2021

Former baseball star Alex Rodriguez announced
this month that his investment firm was aiming
 to raise $500 million for a blank-check fund.
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