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If you thumb through the financial press or flipped on CNBC over the past nine months or so, you probably noticed that the world is suddenly overrun with SPACs.

A SPAC, or a special purpose acquisition company, is an old financial tool used by private companies to go public without retaining all the lawyers and bankers one needs to execute a traditional IPO. SPACs are often referred to as blank check companies. An investor starts a SPAC with the promise of merging it with another company at a later date. Public investors buy shares in the SPAC, essentially writing a blank check. And that name brand investor goes out and finds a merger target. In the end, a private company goes public without an IPO and the SPAC investors become its shareholders.

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