SPAC
Business & Finance abbreviation · Stock Market & Investing
| Stands for | Special purpose acquisition company |
|---|---|
| Categories | Business & Finance |
SPAC stands for Special purpose acquisition company, a stock market & investing abbreviation.
Shell company that raises money through an IPO, holds the cash in a trust and has a limited time, usually about two years, to find and merge with a private company, taking it public. Investors can redeem their shares for cash if they dislike the chosen deal.
Example: The electric-truck startup went public by merging with a SPAC instead of running a traditional IPO.
Usage notes
Also called a blank-check company. SPAC listings boomed in 2020 and 2021, with more than 600 SPAC IPOs in 2021 alone, before poor post-merger returns and new SEC rules adopted in 2024 cooled the market. Sponsors typically receive about 20 percent of the shares, known as the promote, for a nominal price.
Related abbreviations
More stock market & investing abbreviations
- SEDOL – Stock Exchange Daily Official List
- SEO – Seasoned equity offering
- SGX – Singapore Exchange
- SIPC – Securities Investor Protection Corporation
- SL – Stop-loss
- SMA – Separately managed account
- SPX – Standard & Poor's 500 Index (ticker symbol)
- SRI – Socially responsible investing
- T+1 – Trade date plus one business day
- TER – Total expense ratio
- TP – Take profit
- TSE – Tokyo Stock Exchange