Health-bar maker Simply Good Foods Co. emerged from a SPAC deal. Its stock is up 45% over the past year. PHOTO: RICHARD B. LEVINE/ZUMA PRESS

Blank-Check Companies, a Hot IPO Fad, Contain Pitfalls for Investors

Jay R. Ritter

An analysis by the Wall Street Journal shows that more than half of the blank-check companies that went public in 2015 and 2016 are now trading below their IPO price. Blank-check companies, often called special-purpose acquisition companies, or SPACs — hold initial public offerings to raise cash for acquisitions even though they don’t have assets or any operating history.

Cordell Eminent Scholar Jay Ritter, shares his thoughts on SPACs in this article by the Wall Street Journal.