SPAC

SPAC or special purpose acquisition company is a blank cheque company that is specifically set up to acquire a firm in a particular field. Its purpose is to raise money through IPO (initial public offering) for the acquisition. The money once raised in placed in an escrow account that becomes accessible at the time of acquisition. If the acquisition isn’t done in 2 years of the IPO, the SPAC gets delisted and the money goes back to the investors. Recently, the US Securities and Exchange Commission issued an investor alert regarding SPACs.