A SPAC takes a company public by attempting to sidestep regulations that help protect investors from potentially dodgy new businesses. People place money in a “blank check” fund, which then merges with an existing private company, allowing it to sell shares without having a formal initial public offering, a process that involves rigorous scrutiny by banks and regulators. SPACs have been celebrated as a way to spread Wall Street riches more equitably—you can often buy a share in one for just ten dollars—and condemned as potential catalysts of a financial crash.

From this article, I'm not certain what I think about SPACs. They clearly seem like dangerous instruments that are the "new kid on the block" akin to the securities that caused the 2008 financial crisis, but at the same time, it does make sense that there is some alternative to a traditional IPO reserved for very wealthy investors. Palihapitiya is obviously a wild guy, and I don't buy into any of his "make the world better" aguments, which Dugigg labels as the "narrative of heroic capitalism." But he does know what he is talking about and has navigated through a lot of very successful businesses. Whether this is luck, grit, intelligence, or what-have-you, I'm not sure, but it is certainly somebody to listen to (although you don't need to agree).

Duhigg seems to depict the emergence of SPACs as part of a cycle of business where people invent these insane instruments more out of randomness than any factual or scientific basis.

Economics is a science of cycles. There is the business cycle and the inflationary cycle, the rhythms of housing booms and credit busts. This periodicity affords money a whiff of certainty—a sense that wealth and poverty are, like the positions of the planets, subject to a set of objective and universal truths. But even the earliest economists acknowledged that divining financial fortunes requires as much knowledge of unpredictable psychology as of measurable facts.

This is backed up by Robert Shiller's book, Narrative Economics, where he argues that "many of our dearest economic theories are simply stories that we've made true through collective belief." We kind of take anything that somebody does as "part of the market" and have to incorporate it. SPACs seem no different, as they are being used more and more.

It seems a little crazy to me; somebody creates a shell company that does nothing, goes public, and then finds a private company to bring into the public sphere without forcing them to go through the traditional IPO. There is a lot of faith needed here as the person selling the company has to find a good one to merge with. It seems entirely against the traditional "valuation" theory. It seems directed at celebrities and people who can garnish attention, but I guess alot of the stock market is just that as well.