Home / SmartTech / Is the SPAC boom 2020 an echo of the 2017 ICO madness? – TechCrunch

Is the SPAC boom 2020 an echo of the 2017 ICO madness? – TechCrunch



I wanted to write An essay on Microsoft and TikTok today because I was practically a full-time reporter reporting on the software giant when he hired Satya Nadella in 2014. But everyone else has already done that, and frankly there is a more pressing financial issue for us to analyze.

Let’s take a minute to take stock of SPAC (Special Purpose Acquisition Companies), which have grown in importance in recent months. SPACS, also known as blank check companies, are companies that are publicized with a lot of cash and the reputation of their supporters. Then they connect to a private company, enabling private companies to go public with much less effort than a traditional IPO.


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And less control, which is why SPACs weren̵

7;t the way forward for top quality companies in the past. A look at the historical data does not provide a good picture of the performance after the IPO.

However, this historical stigma does not stop the flow of SPACs, which are bringing private companies public this year. A large number of SPACs have already occurred, which we should discuss in more detail in Q1 and Q2.

Still better late than never. Let’s take a look at two new SPAC news this morning: Lordstown Motors, an electric vehicle company that is partnering with a SPAC to go public, and Paytech, a fintech company that has FinTech III, another SPAC, goes public.

We will see that there is plenty of capital in hot sectors to look for businesses of any kind. It is not clear how the boom in legacy liquidity will develop in the long term, but what is clear today is that with a lack of caution, the hunt for yield is more than ready to intervene.

Electric vehicles as SPAC Nirvana

The Tesla stock boom has boosted all electric vehicle (EV). The value of historically difficult public EV companies like NIO has returned, and private companies in this area have been a hot path for SPACs to go public in a hurry and take advantage of investor interest.


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