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{{a|g|}}{{quote|“Some of these schemes were plausible enough, and, had they been undertaken at a time when the public mind was unexcited, might have been pursued with advantage to all concerned. But they were established merely with the view of raising the shares in the market. The projectors took the first opportunity of a rise to sell out, and next morning the scheme was at an end. Maitland, in his History of London, gravely informs us, that one of the projects which received great encouragement, was for the establishment of a company “to make deal boards out of saw-dust.” | {{a|g|}}{{d|Special purpose acquisition company|/spæk/|n|}} <br> | ||
Also known as a “blank check company” is an [[espievie]] that is listed on a stock exchange — thus, being a publicly listed company — that is organised with the purpose of acquiring a private [[company]] by a type of merger, in the process making the private company public without it having to go through the traditional, painful, expensive [[initial public offering]] process. | |||
According to the [[Securities and Exchange Commission]], “a [[SPAC]] is created specifically to pool funds in order to finance a [[merger]] or acquisition opportunity within a set timeframe. The opportunity usually has yet to be identified”. | |||
All right, readers: let’s take in a bit of history. This is an extract from Charles McKay’s 1841 classic, {{br|Memoirs of Extraordinary Popular Delusions and the Madness of Crowds}}. It’s a bunker buster but it is worth staying with it: | |||
{{quote|“Some of these schemes were plausible enough, and, had they been undertaken at a time when the public mind was unexcited, might have been pursued with advantage to all concerned. But they were established merely with the view of raising the shares in the market. The projectors took the first opportunity of a rise to sell out, and next morning the scheme was at an end. Maitland, in his History of London, gravely informs us, that one of the projects which received great encouragement, was for the establishment of a company “to make deal boards out of saw-dust.” | |||
This is no doubt intended as a joke; but there is abundance of evidence to shew that dozens of schemes, hardly a whit more reasonable, lived their little day, ruining hundreds ere they fell. One of them was for a wheel for perpetual motion—capital one million; another was “for encouraging the breed of horses in England, and improving of glebe and church lands, and repairing and rebuilding parsonage and vicarage houses.” | This is no doubt intended as a joke; but there is abundance of evidence to shew that dozens of schemes, hardly a whit more reasonable, lived their little day, ruining hundreds ere they fell. One of them was for a wheel for perpetual motion—capital one million; another was “for encouraging the breed of horses in England, and improving of glebe and church lands, and repairing and rebuilding parsonage and vicarage houses.” | ||
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Enough said? Apparently not. Despite McKay’s certainty, there is doubt<ref>From Wikipedia, at any rate.</ref> as to whether “A company for carrying on an undertaking of great advantage, but nobody to know what it is” ever really existed or whether that , too, was a joke — but, really, if this ''were'' a joke, does this not make the present phenomenon of the [[SPAC]] all the more preposterous? | Enough said? Apparently not. Despite McKay’s certainty, there is doubt<ref>From Wikipedia, at any rate.</ref> as to whether “A company for carrying on an undertaking of great advantage, but nobody to know what it is” ever really existed or whether that , too, was a joke — but, really, if this ''were'' a joke, does this not make the present phenomenon of the [[SPAC]] all the more preposterous? | ||
It might strike you that this is a bit of an end-run around the traditionally ''hideous'' process of going public which involves not only bearing you soul to the hearts and minds of the investment banking community, and then the world at large, paying them some extraordinary fee for doing so, going through quiet periods, justifying your business credentials by reference to years of solid revenue and profit generation, and a plausible “go-forward” story. | |||
This is not to say these target companies do not have all those things, but even if they do, the [[IPO]] process is a financial root canal. But freshly minted [[espievie|espievies]] ''don’t''. They have no track record. They have never made any income, let alone profit, let alone three good years of the styff. They have never made a widget. They have no capital. They have nothing. So, how —? | |||
{{sa}} | {{sa}} | ||
*[[Signs of the forthcoming apocalypse]] | *[[Signs of the forthcoming apocalypse]] | ||
*{{br|Debt: The First 5,000 Years}} | *{{br|Debt: The First 5,000 Years}} | ||
{{ref}} | {{ref}} | ||