2 Things to Consider When Investing in SPACs

Special purpose acquisition companies (SPACs, for short) exploded in popularity during 2020. A SPAC is a company with nothing more than a chunk of money and a management team dedicated to finding a private business to merge with and take public.

Last year, total SPAC listings more than quadrupled from 2019, and gross proceeds raised were more than six times higher year over year. So far in 2021, SPAC issuances and proceeds are accelerating and are on pace to comfortably pass 2020's records.

With this movement in full swing, there are some considerations investors should make before investing in any SPAC. Here are the two most important.

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Source Fool.com