How do IPOs work?
It will file with the SEC following an audit of its financials.
The stock exchange reviews a company's IPO application and can accept, modify or reject it.
After all approvals are obtained, the company will determine the number of shares to be sold on the selected stock exchange. Investment banks determine the IPO price based on their evaluation of the business.
The initial share price has been listed and published, and the shares are now publicly tradable.
Special Purpose Acquisition Company (SPAC)
Compared to an IPO, a SPAC is essentially a shell company that spain mobile database has no other purpose than to raise investor money to acquire an existing business and take it public. That's why it's also called a blank check company. SPACs work in the reverse order of an IPO. Instead of a company selling shares to public investors, a SPAC goes public on the stock market by selling shares to investors. It then tries to acquire a company before the two-year deadline.
How do SPACs work?
A team of well-known investors, such as hedge fund or private equity principals and industry leaders, creates a SPAC. The management team is called the "SPAC sponsor."
SPACs raise money from investors through road shows or other outreach and typically trade at around $10 per share.
The money is placed in an interest-bearing trust account.
Meanwhile, SPAC sponsors research the market for a private company seeking to go public through an acquisition.
Once finalized, all SPAC shareholders must approve the transaction, which is typically structured as a reverse merger. This means the operating company merges with the SPAC or a subsidiary of the SPAC.