Hypes are a good thing. No, think about it: They generate attention for products, activities and ideas. And where there is attention, there is scrutiny, too. The humming of the mainstream buzz makes us turn heads and observe closely where the noise is coming from.
For the hype-sensitive stock market, this has proven a boon in many cases. Wall Street is loud, and the more volume an investment trend generates, the more it will catch regulators’ interest – besides that of eager venturers. And currently, one investment trend generating much noise is that of SPACs.
SPACs (short for Special Purpose Acquisition Companies) stood on the sidelines of the stock markets for a few decades. But in recent years, they made a comeback in the investment mainstream – mostly thanks to the web. And there, I could not help but think of another social-media-driven hype of the 2010s: ICOs.
In fact, SPACs already show the same signs of overvaluation and ultimately disintegration that have befallen ICOs a few years back. But will SPACs go down the path of the ICO?
In this article I will try to answer this question and a few more, like:
- What are SPACs?
- Why are they popular?
- What are their risks and disadvantages?
- Is the SPAC hype comparable to the ICO hype?
Okay then, here goes: SPACs, the specifics…Read More