An Impressive Tech Pedigree Could Make This SPAC a Huge Winner

Investing in initial public offerings (IPOs) is a relatively straightforward, if somewhat risky proposition. Investors dig in to the regulatory documents -- typically the S-1 filed with the U.S. Securities and Exchange Commission -- to determine the financial performance, customer metrics, and business prospects of a company before its debut to determine if it meets their threshold for investment.

A special purpose acquisition company (SPAC) is a very different animal. The sponsor company goes public first and later acquires a promising business with the funds raised. Investors have no idea what company will eventually be acquired and are therefore relying entirely on the SPAC's management team, or sponsors, to pick an acquisition target that will ultimately be successful. For that reason investors must have a high degree of confidence in the team running the SPAC.

That's what makes MELI Kaszek Pioneer (NASDAQ: MEKA) so intriguing.

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Source Fool.com