Why SPACs are Popular Investments

Nicola Motors, Draft Kings, and Virgin Galactic have a lot in common.


For starters all these companies have recently gone public and are still not profitable and while that's common for many IPOs neither Nicola or virgin galactic have actually generated any revenue from their main service lines.


For Nikola they haven't even sold any electric vehicles and for Virgin Galactic they have still yet to deliver on their space tourism services. Most people would consider these stocks to be early stage and incredibly risky for wall street bets though it's a great idea.


Perhaps the most important thing to understand about these companies is how they went public and that's through a spec or a special purpose acquisition company.


We're going to look at specs how they're structured and answer why they become so popular among investors.


SPAC's are by no means anything incredibly new they've existed for a while now but have just recently become popular again.


The general idea behind a SPAC is that their management team raises money from investors to go public and then uses that money to buy another company the process through which the acquisition occurs is called a reverse merger and how this works is actually pretty simple...



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