Sudden excitement about the flurry of startups going public through so-called blank-check companies is enriching some of the biggest players in finance, particularly hedge funds, the Wall Street Journal reports.
Wall Street’s recent exuberance has engulfed SPACs, with day traders and large institutions alike pouring money into shell companies pursuing startups tied to themes such as green energy or sports betting. Recent SPACs have surged immediately after announcing deals to take startups public, giving hedge funds an opportunity to sell and turn quick profits.
One example came Jan. 7, when shares of the venture capitalist Chamath Palihapitiya’s Social Capital Hedosophia Holdings Corp. V exploded 63% after it said it is combining with Social Finance. Read more.
