SPAC / Blank Check / Blind Pool
A shell company that raises money first and picks an acquisition later.
What is SPAC / Blank Check / Blind Pool?
A special purpose acquisition company raises IPO proceeds into a trust, then has a limited time to find and merge with a private operating company. Shareholders can typically redeem their shares from the trust if they dislike the deal. A blind pool is an offering where the specific use of the proceeds is not disclosed. Investors are betting on the sponsor.
SPAC / Blank Check / Blind Pool: a worked example
A SPAC raises $250M, holds it in trust, and 18 months later merges with an electric-vehicle startup.
More terms in Equities, Funds & Alternatives
Shareholder Rights (Statutory vs. Cumulative Voting)
Voting, preemptive rights, dividends when declared, inspection, limited liability.
Types of Preferred Stock
Cumulative, convertible, callable, participating, and floating-rate preferred.
American Depositary Receipt (ADR)
A dollar-denominated receipt for foreign shares, traded in the US.
Rights vs. Warrants
Rights: short-term, below market. Warrants: long-term, above market.
Restricted & Control Stock (Rule 144)
Unregistered or insider-held stock with resale limits.
Employee Stock Options (ISO vs. NSO)
Incentive options get capital gains treatment; nonqualified options create income at exercise.
Technical Analysis
Forecasting prices from charts, trends, and trading volume.
Fundamental Analysis
Valuing a company from its financial statements, management, and industry.