Recently, the stock market has been on fire, with the market having tremendous gains since the downturn in March. Since there is so much money to be gained/lost right now, it has led a ton of new people to enter the stock market. However, there are so many technical things to know about the stock market, and it at least helps a bit to be familiar with some of the terminology.
Companies like DraftKings and Luminar are very popular investments right now, especially on platforms like Robinhood. Apart from their popularity though, what makes them both interesting is that they are both SPACS. A SPAC stands for a special purpose acquisition company.
This YouTube video does a great job of explaining what exactly a SPAC is, and why they have become more common in recent years. I thought the video also did a good job of explaining who makes the most money from SPAC’s, as well as the advantages/disadvantages from an investor’s point of view.
Since the popularity of SPAC’s have taken off in recent years (and will likely continue to well into the future), I think it is a great use of your time to watch this ten minute video by CNBC Explains and learn what they are before deciding whether to invest in them or not. While no investment is risk free, it at least lowers the risk a bit if you are aware of the terminology and of what you are buying!
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