[creeble]

What's the difference between a SPAC and what used to be called a "reverse merger"?

I.e., when a smaller (but publicly traded) company, merges with a larger private company.

These used to be pretty common scammy ways to generate capital, usually through pump and dumps.

Same thing, just new acronym?

[the_mitsuhiko]

> What's the difference between a SPAC and what used to be called a "reverse merger"?

A SPAC is created for the designated purpose to become a vehicle to take another company public. In a traditional reverse merger situation both companies are engaged in some regular business activity.

[Judgmentality]

You make a SPAC sound even shadier than a reverse merger.

[nibsfive]

It's more an indication of how (irrationally) intent companies are on staying private well into their days as a global empire.

[toomuchtodo]

Why is it irrational to stay private? Going public constrains you with oversight and public shareholder demands.

If you can get access to capital without public shareholders, you absolutely should.

[Judgmentality]

It seems like the only rational reasons to IPO are out of necessity (you need to raise the money, your employees will quit without liquidation, etcetera), or short-term greed. What other reason would you want to be public?

[emteycz]

To me it sounds like all cards are on the table, as opposed to reverse mergers.

[icedchai]

SPACs are just blank check, shell companies. Often reverse mergers would occur with junk penny stocks resulting in the pump-and-dump activities you mention. I think SPACs are “cleaner”...

[np_tedious]

My understanding is that a SPAC is more or less a corporation/fund that exists solely for the aim of doing a (or multiple?) reverse merger