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SPACs are turning Wall Street into Silicon Valley
Feb 2, 2021
Episode 361

SPACs are turning Wall Street into Silicon Valley

Money printer go brrr, etc.

Let’s set GameStop aside for a sec. We know, we know.

But there’s another hot, disruptive force in finance beyond r/WallStreetBets: special-purpose acquisition companies, or SPACs. They had a big 2020, attracting some huge names, and The Wall Street Journal reports an average of five new SPACs are popping up every day in 2021. Now the “stonks” crowd wants in. So what’s a SPAC?

“it’s just a pile of money. … It’s just money that’s sitting there to acquire a private company and take it public,” said Wall Street Journal markets reporter Amrith Ramkumar. “So a lot of startups have realized that this is an easy way to raise money and access public market investors. Basically, they get the SPAC’s spot on the stock exchange after the merger goes through.”

Once one of these so-called “blank check” firms takes a company public, day traders and other investors start buying up stock and driving up the price, and the SPAC’s creators get rich. Everyone’s happy … right? On today’s show, Ramkumar makes us smart on the promise and peril of SPACifying Wall Street.

Later in the show, listeners call in to tell us about getting the vaccine in Texas, the best GameStop memes and making the definitive “stonktail.” Find the recipe below, from former bartender and current Smartie Elizabeth in Buffalo, New York:

The stonktail: Add an ounce and a half of gin, an ounce of lemon shrub and ice to a cocktail shaker and give it a good shake and strain it into a glass. Top it with about two ounces of Prosecco. Garnish with rosemary and lemon twist, and enjoy.

Plus, ahead of her appearance at the Super Bowl, we remember when poet Amanda Gorman answered the Make Me Smart question.

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The team

Marissa Cabrera Senior Producer
Bridget Bodnar Senior Producer
Tony Wagner Digital Producer