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Wall Street's craze in SPACs continues to heat up as each month goes by: funds raised via blank-check deals have exceeded traditional IPOs for two months straight.
Total proceeds from special purpose acquisition companies raised $10 billion in August after a record of $10.5 billion in July, compared to a total of $17 billion funding from traditional initial listings for the past two months, according to data from Refinitiv. There has been a historic $33 billion funding raised via a total of 86 SPACs this year alone, a more than 260% jump from the same period a year ago, the data said.
Some of Wall Street's most high-profile investors including hedge fund billionaire Bill Ackman and Oakland A's executive Billy Beane have launched their own blank-check companies this year, bringing more hype to this booming IPO alternative vehicle. A SPAC is formed to raise funds to finance a merger or acquisition within two years typically. The target firm will be taken public through the acquisition.
"By number of listings, August 2020 marks one of the few times that SPAC listings outpaced traditional IPOs on a monthly basis," Matt Toole, director of deals intelligence at Refinitiv, told CNBC.