Do you keep up with the latest investment trends? If so, then you already know that SPACs are the hottest investments so far in 2020. In 2020, SPACs account for virtually all of the growth in the US IPO market vs. 2019 levels. In 2007, the last peak of SPAC IPO volumes, SPACs accounted for 14% of the IPO market vs. nearly 50% of the market in 2020. What are the best SPACs to buy now?
Read on to learn how SPACs work, how to invest, and some of the top SPACs for the future economy.
How SPACs Work
If you received a blank check, you’d be able to make some pretty sweet business deals, right? SPACs, or special purpose acquisition companies, attempt to do just that. These entities form with one specific goal in mind — raise enough funds to purchase an existing company.
First, the entity is formed. Then, they start collecting contributions from investors. Keep in mind that this company doesn’t have a product or service to sell. They aren’t making revenue. They’re just preparing to make an offer for a stake in a specific company.
SPACs have a period of two years to make a deal. If they aren’t successful, then they must return all the money to the investors. If they are successful, then they’ll merge with the target company.
How to Invest in a SPAC
Think SPACs are a tiny market? Think again. Experts say SPAcs raised a whopping $13.6 billion in 2019.
Are you considering investing in a SPAC? If so, then it’s crucial to research the company and its founders first. After all, you’re investing more than just your money. You’re investing your trust, too.
With that in mind, consider each SPAC’s founder’s experience, reputation, and track record before making a blind investment. To give you a head start, we’ve hand selected three top SPACs for the future economy. Read on to get an overview of their stats.
Since we were children, we’ve all envisioned a future filled with autonomous vehicles. It’s no surprise that these visions are finally turning into a reality. What most of us didn’t expect, though, was a need for electric vehicles.
$KCAC is outspoken about its goal — merging with QuantumScape. QuantumScape is working on perfecting a solid state lithium battery for electric vehicles. The company is also backed by renowned billionaire Bill Gates.
The perks of QuantumScape batteries include:
- Saves money
- Saves time (charges from 0-80% in 15 minutes)
- Increases energy density
Due to the increase in demand for electric vehicles, it makes sense to invest in a company like QuantumScape. For that reason, we’ve included $KCAC as one of the top SPACs for the future economy.
Another SPAC that plans to hop aboard the autonomous vehicle trend is $GMHI. The goal is to merge with Luminar.
Luminar constructs the crucial sensor technology that makes autonomous vehicles safe. They make both the software and semiconductors for self-driving cars. As a result, they’re already partnered with 10 of the largest car companies around the globe.
As global leaders in the industry, it’s no surprise Luminar is backed by big names like Volvo, Peter Thiel, and VectoIQ.
3-D printing has the potential to disrupt so many industries, similar to how fintech is shaking up the finance world. One thing that’s been lacking with 3-D tech, though, is speed. All that will change according to Desktop Metal.
Desktop Metal proclaims to have metal 3-D printing tech that’s up to 100 times faster than the leading tech.
That’s one of the main reasons that $TRNE plans to merge with Desktop Metal. If you’re hoping to invest, then you’ll be in good company! Big name investors include Google, BMW, and GE.
The Top SPACs for the Future Economy
Investing in SPACs is a trendy topic in 2020. For many, the flexibility, speed, and ease of raising capital through SPACs are too good to pass by. Investors can’t deny the recent stock market success of SPACs this year, either.
Now that you’ve got a head start on researching the top SPACs for the future economy, where will you let this knowledge take you? Let us know in the comment section below whether you think this type of investment is right for you.