SPAC (Special Purpose Acquisition Company)

A SPAC is a shell company—basically an empty corporate box—created specifically to raise money from investors with the goal of buying an existing private company and taking it public. Instead of a company going through the traditional IPO (Initial Public Offering) process, it merges with a SPAC to become publicly traded faster. You'll encounter SPACs in financial news and SEC filings when companies want a quicker path to the stock market. They matter because they're a trendy alternative to traditional IPOs, though they come with extra risks since investors are betting on management's ability to find and complete a good acquisition. For example, if a private electric vehicle startup merged with a SPAC called "Future Motors Inc.," the startup would suddenly be publicly traded.