So What is a Special Purpose Acquisition Company...?

Hello viewers, welcome to Info Thirst today we are going to talk about blank check companies and understand how it works. Before we get into the topic we would like you to Follow us by clicking the follow button. Now that you have done that...So let's dive into it…

Let's say you want to invest in a company, the first basic and most common thing to do is: personal research and know more and more about the company you want to invest in. But when you look at the model of Special Purpose Acquisition Company, there is no company...confused? Let us help you with that. 

Special Purpose Acquisition Company or blank check companies, are basically a company or corporation that exists only on paper and has no office and no employees, they raise money by IPO(Initial public offering) to take over a private company. The process is to sell common shocks with a warrant (that investor can buy more stock later at a fixed price). Then either management team finds a perfect company to invest in or if the management team fails to find a company before the deadline the money gets refunded back to investors.

So what attracts the investors…?

Special Purpose Acquisition Companies take much less time than traditional IPO. Lower risk and goodwill of the management team are one of the main factors that convince investors to pour their money.

Currently Special Purpose Acquisition Companies are booming but one thing we all can agree on is no risk free investment.

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