‘Blank check’ companies have seen a surge in popularity this year. Here are 6 high-profile SPACs to watch in 2020.

A special purpose acquisition company (SPAC) is commonly referred to as a “blank check” company because investors essentially write a check to a publicly traded shell company whose sole intent is to go shopping for a private company and in effect bring it public via the listed holding company.

Going public through a reverse merger with a SPAC side-steps the traditional IPO route by avoiding coast-to-coast roadshow presentations to institutional investors and can save companies costly investment banking fees.

SPACs typically sell common shares at $10 per unit, which is why exchange-listed SPACs that have yet to announce an acquisition trade very close to $10. But once a SPAC announces an acquisition, its stock price can see a surge in trading activity (and price), as evidenced by some high-profile SPACs in late 2019 and 2020.

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