Blank cheque companies have been around for decades, falling in and out of fashion along with various boom-and-bust cycles. After facilitating a series of penny-stock scams in the 1980s, regulators and legislators enacted tougher rules designed to protect investors in blank cheque companies.

Recently, the blank cheque structure has experienced a resurgence in popularity. In 2020 alone, blank cheque IPOs raised more than US$80 billion – more than the previous 10 years combined, and exceeding the traditional IPO market. This trend has only accelerated, with the first three months of 2021 already eclipsing 2020’s record-setting total.

Blank cheque companies, also known as special purpose acquisition companies, or SPACs, get their name from the fact that they have no business or operations at the time of their IPO. Instead, SPAC sponsors use IPO proceeds to acquire a business, often within a specified industry. Because the target business is unknown…

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