‘Blank-Check’ Companies Are Hot on Wall Street. Investors Can’t Ignore Them.

By Nicholas Jasinski Jan. 17, 2020 5:14 pm ET   Note from Dudley Pierce Baker of CommonStockWarrants.com Our interest in blank check companies is simple – every blank check company (SPAC) has a stock warrant trading with a 5 year life and the clock does not begin until an acquisition/merger is completed. There are currently 67 blank check companies currently trading and in my databases. Many potentially great opportunities. ______________________________________________________________________________________________________________ Some big-name initial public offerings last year were panned for not having a profitable business. Yet more than a quarter of the offerings were of companies with no business at all—by design. These were special purpose acquisition companies, or SPACs, also known as “blank-check companies.” Their goal is to raise money from public and private investors and then identify an acquisition target and buy it, typically within two years. SPACs raised $13.6 billion in 59 IPOs last year. Should you be investing in one of these companies? The pitfalls can be numerous, and not all SPACs are created equal—but investors should not completely ignore this growing segment of the public markets. Richard Branson’s spaceship company Virgin Galactic Holdings (SPCE), fantasy-sports website DraftKings, Twinkie-maker Hostess Brands (TWNK), and restaurant chain TGI Fridays are among companies to merge with SPACs in recent years. There are currently 71 SPACs on the market seeking targets, according to data from SPACInsider, a website devoted to research analysis and data about the industry. SPACs can designate a target industry or geographic region, or go public as generalists with no specific … Continue reading