Spac, the latest craze for finance and billionaires

What do rapper Jay-Z, American football player Colin Kaepernick, son of Martin Luther King, Virgin founder Richard Branson, financier Bill Ackman or LVMH boss Bernard Arnault have in common? It consists of four letters: Spac, the acronym of Special Purpose Acquisition Company, literally – hang in there – a “special purpose acquisition company”. In French, one could also speak – it is clearer – of “company chèque en blanc”. It is the latest madness of finance and billionaires.

What is a Spac used for? To make them earn even more money, of course. But how ? It’s simple. A Spac is an empty shell, a company without activity, that its “sponsors” – a financier, a successful entrepreneur, a celebrity… sometimes all three – create to list it on the stock market and raise capital. They sell their reputation to investors. Spac will then seek to buy a start-up or a growing company, with which it will merge. This start-up will therefore find itself listed on the stock exchange, with the capital of Spac at its disposal, without having to undergo the Stations of the Cross of an introduction on the markets, a process which requires public disclosure.

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