Bill Ackman's SPAC raises $4B for a company without a company

Up there with quarantinis... Another 2020 summer trend: SPACs, or Special Purpose Acquisition Companies. SPACs (fun to say) have been around for years, but gained popularity recently as a way for companies to go public. Private companies can take their stock public (and make it available to retail investors like you and us) in a few ways:

• Initial Public Offering: The company creates new shares of itself then hands things off to investment banks. They decide the stock's price, then sell shares to the 1st batch of public investors. Most companies go public the IPO route.
• Direct listing: No new shares are created (#nonewfriends). Existing shares held by the founders, early investors, and employees simply become public, with supply/demand on exchanges like NYSE or Nasdaq determining the price. Slack and Spotify did this recently.
• Acquisition: A private company gets eaten up by a public one, and becomes public by association. Postmates just did this by selling to Uber.

And then there's the SPAC way... This falls under Acquisitions, but it's much edgier (you can tell by the name). SPACs go through an IPO, but have no commercial operations. Their sole purpose is to one day acquire a real company and voila, that acquired company becomes public.

• SPACs are AKA "blank check" companies: SPACs collect cash from new investors in the IPO, even though those investors don't know what they'll end up owning. The SPAC has 2 years to buy a real company, or the $$$ gets returned to the investors.
• Pershing Square Tontine: Famous investor Bill Ackman just took this SPAC public in the largest-ever blank-check IPO (it raised $4B). Ackman said Pershing might buy a “mature unicorn” 6 times in the filing. So much detail.