SPACs_NN2 are_VBB the_AT0 investment_NN1 of_PRF the_AT0 moment_NN1 ._SENT With_PRP interest_NN1 rates_NN2 on_PRP the_AT0 floor_NN1 and_CJC investors_NN2 chasing_VVG young_AJ0 companies_NN2 ,_PUN this_DT0 is_VBZ a_AT0 dream_NN1 scenario_NN1 for_PRP SPACs_NN2 ._SENT To_TO0 know_VVI what_DTQ 's_VBZ next_ORD and_CJC how_AVQ the_AT0 boom_NN1 will_VM0 end_VVI ,_PUN investors_NN2 need_VVB to_TO0 understand_VVI these_DT0 quirky_AJ0 financial_AJ0 concoctions_NN2 ._SENT What_DTQ is_VBZ a_AT0 SPAC_NN1 ?_SENT SPAC_NP0 stands_VVZ for_PRP special-purpose_AJ0 acquisition_NN1 company_NN1 ,_PUN which_DTQ is_VBZ Wall_NP0 Street_NP0 jargon_NN1 for_PRP a_AT0 publicly_AV0 traded_AJ0 company_NN1 that_CJT holds_VVZ nothing_PNI but_CJC cash_NN1 ._SENT Also_AV0 known_VVN as_PRP blank-check_AJ0 companies_NN2 ,_PUN SPACs_NN2 exist_VVB to_TO0 buy_VVI private_AJ0 companies_NN2 ,_PUN and_CJC effectively_AV0 take_VVB them_PNP public_AJ0 while_CJS avoiding_VVG the_AT0 pitfalls_NN2 of_PRF a_AT0 traditional_AJ0 initial_AJ0 public_AJ0 offering_NN1 ._SENT The_AT0 hot_AJ0 market_NN1 has_VHZ drawn_VVN in_PRP Wall_NP0 Street_NP0 bankers_NN2 ,_PUN tech_NN1 entrepreneurs_NN2 and_CJC celebrities_NN2 ranging_VVG from_PRP Serena_NP0 Williams_NP0 to_PRP former_DT0 Cosmopolitan_AJ0 editor_NN1 Joanna_NP0 Coles_NP0 ._SENT SPACs_NN2 have_VHB taken_VVN popular_AJ0 companies_NN2 like_PRP sports-betting_AJ0 firm_NN1 DraftKings_NN2 Inc._PRP DKNG_NN1 -3.09_CRD %_NN0 and_CJC space-tourism_NN1 company_NN1 Virgin_NN1 Galactic_AJ0 Holdings_NN2 Inc._PRP SPCE_NN1 -4.78_CRD %_NN0 public_AJ0 ._SENT The_AT0 SPAC_AJ0 explosion_NN1 Starting_VVG last_ORD summer_NN1 ,_PUN SPACs_NP0 began_VVD surging_VVG onto_PRP the_AT0 stock_NN1 market_NN1 and_CJC the_AT0 momentum_NN1 continued_VVD into_PRP this_DT0 year_NN1 ._SENT Now_AV0 ,_PUN hundreds_CRD of_PRF SPACs_NN2 are_VBB doing_VDG deals_NN2 or_CJC are_VBB on_PRP the_AT0 hunt_NN1 for_PRP companies_NN2 to_TO0 buy_VVI ._SENT Technology_NN1 ,_PUN electric_AJ0 vehicles_NN2 and_CJC green_AJ0 energy_NN1 have_VHB been_VBN especially_AV0 hot_AJ0 areas_NN2 ._SENT SPACs_NN2 have_VHB been_VBN around_AVP for_PRP decades_NN2 but_CJC are_VBB taking_VVG off_AVP now_AV0 because_CJS the_AT0 biggest_AJS players_NN2 from_PRP Wall_NP0 Street_NP0 and_CJC Silicon_NN1 Valley_NN1 are_VBB using_VVG them_PNP to_TO0 raise_VVI money_NN1 and_CJC take_VVB companies_NN2 public_AJ0 ._SENT They_PNP have_VHB raised_VVN nearly_AV0 $_NN0 95_CRD billion_CRD in_PRP 2021_CRD ,_PUN soaring_VVG past_PRP last_ORD year_NN1 's_POS record_NN1 total_NN1 ,_PUN and_CJC account_NN1 for_PRP about_AV0 70_CRD %_NN0 of_PRF all_DT0 IPOs_NN2 this_DT0 year_NN1 ,_PUN according_VVG to_PRP Dealogic_NN1 ._SENT How_AVQ do_VDB SPACs_NN2 work_VVI ?_SENT A_AT0 SPAC_NN1 's_POS "_PUQ special_AJ0 purpose_NN1 "_PUQ is_VBZ to_TO0 use_VVI the_AT0 pile_NN1 of_PRF cash_NN1 it_PNP raises_VVZ in_PRP its_DPS initial_AJ0 public_AJ0 offering_NN1 and_CJC other_AJ0 funds_NN2 it_PNP takes_VVZ in_AVP to_TO0 merge_VVI with_PRP a_AT0 private_AJ0 company_NN1 ._SENT The_AT0 private_AJ0 company_NN1 then_AV0 gets_VVZ the_AT0 SPAC_NN1 's_POS place_NN1 in_PRP the_AT0 stock_NN1 market_NN1 ._SENT SPACs_NN2 typically_AV0 have_VHB two_CRD years_NN2 to_TO0 complete_VVI a_AT0 deal_NN1 or_CJC they_PNP must_VM0 return_VVI money_NN1 to_PRP investors_NN2 ._SENT Lately_AV0 ,_PUN many_DT0 have_VHB only_AV0 needed_VVN a_AT0 few_DT0 months_NN2 to_TO0 announce_VVI mergers_NN2 ._SENT Going_VVG public_AJ0 via_PRP a_AT0 SPAC_NN1 is_VBZ appealing_AJ0 because_CJS it_PNP lets_VVZ private_AJ0 firms_NN2 talk_VVB up_AVP their_DPS business_NN1 ._SENT It_PNP also_AV0 means_VVZ their_DPS valuation_NN1 is_VBZ finalized_VVN with_PRP a_AT0 small_AJ0 group_NN1 of_PRF players_NN2 behind_PRP closed_AJ0 doors_NN2 before_PRP a_AT0 deal_NN1 is_VBZ announced_VVN ._SENT In_PRP a_AT0 traditional_AJ0 IPO_NN1 ,_PUN pricing_NN1 can_VM0 change_VVI until_PRP the_AT0 night_NN1 before_CJS shares_NN2 start_VVB trading_NN1 ._SENT In_PRP the_AT0 stock_NN1 market_NN1 ,_PUN the_AT0 SPAC_NN1 has_VHZ three_CRD lives_NN2 ._SENT The_AT0 first_ORD comes_VVZ after_PRP the_AT0 IPO_NN1 ,_PUN when_CJS the_AT0 company_NN1 's_POS only_AJ0 asset_NN1 typically_AV0 is_VBZ $_NN0 10_CRD in_PRP cash_NN1 per_PRP share_NN1 ._SENT 
