A SPAC, or special-purpose acquisition company, is a blank-check company with the purpose of raising capital to merge with a private business. The only asset these companies contain is the capital raised as they have no service or product to provide. These are often created by institutional investors, especially private equity firms who bring experience that leads to people buying the SPAC. SPACs haven’t had the best time in terms of performance over the past two years, but as of 2022, there are still many SPACs looking for a company to merge with or “merger target”.
One notable SPAC that recently merged was unique, drawing attention from the SPAC and investing community at large. The SPAC, Bull Horn Holdings, merged with a biotech company called Coeptis Therapeutics. What’s interesting is that Coeptis wasn’t a private company, but rather, technically public and traded over the counter (OTC). One reason the SPAC chose this company is due to its large degree of transparency, a factor many black-check deals lack. Some believe this deal should be noticed and serve as a better model for future SPAC deals. With high growth and tech sectors struggling, it’s hard to hold confidence in SPAC performance, at least in the short term.
What do you think about this SPAC deal and does it set a positive precedent for future SPACs?
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.