Definition of Special Purpose Acquisition Rights Company
What is a Special Purpose Acquisition Rights Company
A Special Purpose Acquisition Rights Company (SPARC) is a variation of a Special Purpose Acquisition Company (SPAC). A SPAC is essentially a blank-check company created to raise funds through an initial public offering (IPO) with the intention of acquiring or merging with an existing private company, thereby taking that company public.
The concept of a Special Purpose Acquisition Rights Company (SPARC) is similar but there are some key differences. A SPARC is also created with the intention of acquiring or merging with a private company, but it does not raise funds through an IPO. Instead, it issues rights to its shareholders, which can be exercised to acquire shares in the future target company at a predetermined price. This means that investors in a SPARC do not have to commit capital upfront and can choose whether to invest in the target company once a deal is announced.
In essence, the SPARC structure aims to address some of the criticisms of traditional SPACs by providing investors with more flexibility and reducing the potential for conflicts of interest between SPAC sponsors and shareholders.
GlobEx Markets Financial Dictionary of Terms, Phrases and Concepts
The GlobEx Markets financial dictionary is a reference resource that provides the definitions and explanations of various financial terms, phrases and concepts that are used in international finance and global investing. It includes a broad range of financial terms, such as those related to stocks, bonds, currencies, commodities, options, futures, crypto and much more.
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