How the SPAC bubble blew up and burst

What do Taylor Swift’s record company and Asian “super-app” Grab have in common? They are both part of Wall Street’s recent dealmaking fad: Special Purpose Acquisition Companies (SPAC). SPACs are shell companies that are floated on the stock market with one purpose: to buy another company. This aims to achieve the same as a stock-market listing or initial public offering (IPO) but in reverse. Instead of a traditional company seeking to raise capital from investors through an IPO, with SPACs the empty listed company is set up first. For this reason, they are sometimes known as blank-cheque companies. Depending on…

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