Skip to main content
No. of Recommendations: 3
Actually, that's the entire point of the acquiring SPAC.

The purpose of a SPAC is to invest in the promise that something good will come. You buy shares of the placeholder company with the understanding and expectation that the SPAC is going to buy something really cool and worth your long term investment dollars. When and what, you won't know until they make the announcement.

The company being acquired will become a public company because the SPAC acquiring them is a public company. The SPAC will then adopt the name of the new company and change its ticker symbol. This allows the company being acquired to skip the costs and process of going public by itself. Shareholders of the SPAC need only enjoy the ride.

Who notes the risk is that until a SPAC announces an acquisition, it really has no growth drivers, and once that acquisition has been announced, shareholders have to decide whether the wait was worth it and you have high enough conviction in the target as a long term (3-5 years or longer) investment to hand onto your shares or to sell and start over somewhere else...

Premium Home Fool: Ask me a Foolish Question, I'll give you a Foolish Response!
Ticker Guide: The Walt Disney Company (DIS), Intuit (INTU), Live Nation (LYV), CME Group (CME), MongoDB (MDB), Trip Advisor (TRIP), Vivendi SA (VIVHY), Mimecast (MIME), Hain Celestial (HAIN), Royce Micro Capital Trust (RMT)
Disclaimer: This post is non-professional and should not be construed as direct, individual or accurate advice
Disassociation: The views and statements of this post are Fuskie's and are not intended to represent those of The Motley Fool or any other sane body
Disclosure: May own shares of some, many or all of the companies mentioned in this post (
Fool Code of Conduct:
Invitation: You are invited to interactively watch Motley Fool Live online television:
Call to Action: If you like this or any other post, Rec it. Better yet, reply to it. Even better, start your own thread. This is YOUR TMF Community!
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.