Special Purpose Acquisition Company (SPAC) is a company is formed only to raise capital through an initial public offering (IPO) for the purpose of acquiring an existing private company. SPAC is also known as “blank check company”. SPACs are formed to raise money through an IPO to buy another company. Investors in SPACs can come from well-known private equity funds to the general public. SPACs have two years to complete an acquisition or the funds are return to their investors. In recent years, SPACs have become more popular. They have attracted big-name underwriters and investors and raised a record amount of IPO money in 2019. More than 50 SPACs have been formed in the U.S., raised close to $21.5 billion, in 2020. Some examples of high-profile SPAC deals are the acquisition of Virgin Galactic by venture capitalist Chamath Palihapitya’s SPAC Social Capital Hedosophia Holding and listed the company in 2019. Chamath’s Social Capital has already went public with six SPAC companies since 2019: Virgin Galactic Holdings, Inc (SPCE); Opendoor Technologies, Inc (OPEN); Clover Health Investments, Corp. (CLOV); Social Capital Hedosophia Holdings Corp. V (IPOE) which merged with SoFI fintech company; Social Capital Hedosophia Holdings Corp. IV (IPOD); Social Capital Hedosophia Holdings Corp. VI (IPOF). These stocks are currently doing very well. Another well-known hedge fund, Pershing Square Capital Management, founder, Bill Ackman, sponsored his own SPAC, Pershing Square Tontine Holdings (PSTH) in 2020. This the largest SPAC which raised $4 billion dollar in its offering on July 22, 2020. PSTH stock is also doing very well in the stock market. Therefore, investors should consider looking at owning some good SPAC stocks for diversification.