Understanding SPACs' Hidden Capital Costs

By Nicole Hatcher and Natasha Allen (April 5, 2021, 5:17 PM EDT) -- Over the past year, we have witnessed a boom in special purpose acquisition companies, with the SPAC method of going public seeing a meteoric rise in popularity as an alternative to the traditional initial public offering.

In 2020 alone, there were more than 200 SPAC IPOs, and that number is expected to be much larger in 2021.

Even though this method is gaining steam and has been utilized for decades now, there are still plenty of misconceptions about SPACs and their perceived cost benefits.

As the anatomy of the SPAC process reveals, there are, in fact, hidden costs of capital associated with...

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