Special-purpose acquisition companies increasingly are becoming the "favorite source of financing for private companies looking to go public," according to Ramkumar & Farrell of the WALL STREET JOURNAL. SPAC deals are "generating a lot of interest because they produce big paydays for their creators, make it easier for startups in hot industries such as electric vehicles to capitalize on a frothy run-up in the stock market and offer everyday investors a new path to a hot stock." The 67 SPACs created this year "have already raked in" nearly $20B from investors. There are 287 SPACs "currently hunting for targets." The average time it takes for a SPAC to find a merger deal "dropped from 17 months" in '18 to five in '20, and "many lately have needed less than that." DraftKings still is an "unprofitable sports-betting company." But it generated $292M in revenue during the first nine months of '20, "merged with a blank-check firm" in April '20 and "is now valued" at $42B. Those gains "encouraged others to consider SPACs." A SPAC set up by former Hearst Magazines exec Joanna Coles and Islanders co-Owner Jon Ledecky "needed just five weeks" to sign a $1.6B agreement in December "to take pet retailer BarkBox Inc. public." Still, even "some of the people getting rich off the blank-check boom caution that the euphoria could be part of a bubble that overvalues nascent companies." There are those who "predict this frenzy will end badly" (WALL STREET JOURNAL, 1/24).
