A company that is created solely for the purpose of raising capital through an initial public offering (IPO) with the intention of acquiring or merging with an existing company. Unlike traditional operating companies, a SPAC does not have its own commercial operations at the time of its IPO. Instead, it serves as a shell or vehicle to pool investor funds and identify a suitable target company for a business combination in the future. SPACs have gained popularity as an alternative method for companies to go public and for investors to participate in the growth potential of emerging businesses.
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