SPAC (Special Purpose Acquisition Company)

A shell company that raises capital through an IPO with the sole purpose of acquiring an existing private company, effectively taking it public without a traditional IPO process. SPACs surged in popularity during 2020-2021, with over 600 SPAC IPOs in 2021 alone, often sponsored by celebrities, athletes, and high-profile investors. Many post-merger SPACs subsequently traded well below their $10 IPO price, leading to regulatory crackdowns and a sharp decline in new issuances.