The hottest thing in finance is four letters long. Former NBA star Shaquille O’Neal has one. So does former House Speaker Paul Ryan. Same goes for silver-haired hedge-fund billionaire William Ackman.
It’s called a SPAC, and increasingly it is the favorite source of financing for private companies looking to go public. Richard Branson’s space-exploration firm Virgin Galactic Holdings Inc. went public through a SPAC in 2019, and sports-wagering firm DraftKings Inc. did so last year. Nearly 300 SPACs are now seeking deals, armed with about $90 billion in cash. And more are rolling out at a furious clip—so far this year, an average of five new SPACs launched each business day.
