Special Purpose Acquisition Company SPAC Explained

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What is a special purpose acquisition company (SPAC)? What is a blank check company? Both a SPAC and blank check company are publicly-traded shell companies that raise collective investment funds through an initial public offering (IPO) in the form of a blind pool. The funds are placed into a trust until an acquisition is made or a predetermined period of time elapses and the fund is liquidated. A SPAC can be used in two different ways; • 1) As an alternative investment vehicle where investors can participate alongside an experienced PE investor or management team in making a value-oriented acquisition • 2) As a vehicle to complete a reverse merger and take a private company public in a much cheaper and more profitable way for current owners • There are many considerations and questions that are covered and answered in this video; • Are SPACs like private equity investments? • What are the key differences between a SPAC and an IPO? • What is the reverse takeover process? • What are the advantages of a SPAC to investors? Target companies? Sponsors? • Why is a SPAC bid considered weaker to target companies than a normal bidding company? • What are the rules overseeing SPACs in Canada? The United States? • Here is the TPG Pace Energy SPAC article published on CNBC; • https://www.cnbc.com/2017/05/05/unusu... • A in-depth guide to the SPACs listed on the TSX can be found below; • https://www.tsx.com/resource/en/1359/... • If you have any other questions, please comment below. If you enjoyed the video and found it helpful, please like and subscribe to FinanceKid for more videos soon! • For those who may be interested in finance and investing, I suggest you check out my Seeking Alpha profile where I write about the market and different investment opportunities. I conduct a full analysis on companies and countries while also commenting on relevant news stories. • http://seekingalpha.com/author/robert...

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