A special purpose acquisition company (SPAC) is a business without any commercial operations that are established only for the purpose of raising money through an IPO or for the acquisition or merger of another business.
SPACs, also referred to as “blank check firms”, have operated for decades. The operations of special purpose acquisition corporations (SPAC) and market interest in SPAC deals with digital asset companies both significantly increased in 2021. SPAC mergers allow private operating companies, also known as target companies, to go public in a way that enables the target to negotiate pricing upfront. This offsets the risk of market volatility and allowing companies to include forward-looking projections in their Securities and Exchange Commission (SEC) filings.