A SPAC is a special purpose acquisition company. A good description comes from CNBC's SPACs used to be a joke in Silicon Valley — now they’re going mainstream. Key quote:
In a SPAC, a group of investors raise money for a shell company with no underlying business. The SPAC goes public, generally at $10 per share, and then starts hunting for a company to acquire.
A new SPAC called Z-Work was recently formed that's focused on the gig economy. According to their website, they describe their ideal acquisition as having the following characteristics:
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Using technology to change how people find work, get work done or make ends meet
- Demonstrated sustainable growth potential
- Management driving continued innovation
- Strong, clear value proposition to their customers
- Leveraging data to constantly improve the product and operations
- Benefiting from demographic and/or societal tailwinds"
SPACs used to be somewhat rare, but there's now a SPAC frenzy going on.
According to Yahoo Finance's What the SPAC frenzy tells us about the market and ourselves:
In 2019 59 SPACs worth $13 billion were created. Last year there were 248 worth $83 billion. And already, just six weeks into this year, there are 135 SPACs which have raised $40 billion.
Even the ex-San Francisco 49ers quarterback Colin Kaepernick, who is famous for taking a knee during the national anthem, has formed a SPAC.
So it's no surprise there's a gig economy SPAC.
