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If you thought the action on WallStreetBets was crazy, something even more interesting has been occurring for a much longer time now, and that is SPACs. Over the course of 2020, we saw more SPACs being filed than ever before. From January to October 2020, some 165 SPACs were listed. That’s nearly double the number of global SPACs in the whole of 2019 and five times that of 2015

Now, what in the world is a SPAC? Well, Don Butler, managing director at Thomvest Ventures puts it well when he explained: “You can think of it in comparison to an IPO: an IPO is basically a company looking for money, while a SPAC is money looking for a company”. More specifically, a SPAC stands for Special Purpose Acquisition Company, and it’s just a corporation formed for the sole purpose of raising investment capital through an initial public offering (IPO). Since a SPAC seeks to raise capital, it is often started by influential figures who have connections, as well as reputation and business experience.

The most recent of these SPACs comes from baseball legend Alex Rodrigues who has created the SPAC called “Slam”, which has filed for a $500 million initial public offering for 50 million units. Slam will be listed on the NASDAQ under the ticker symbol SLAMU and will focus on sports, media, entertainment, health and wellness, and consumer technology sectors. Alex Rodriquez isn’t the first athlete or celebrity to have a SPAC, in fact, Shaquille O’Neal has one, and so does Former Speaker of the House Paul Ryan.

Do you think the growing trend for SPACs will continue?

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

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