Automatic translation: Originally published in Finnish 22/06/2026, 08:15 GMT. Give feedback here.

A SPAC, or Special Purpose Acquisition Company, is a way for a company to go public outside of a traditional IPO. The end result is the same as a regular IPO. The company's shares become publicly traded, but the route there is indirect, through a shell company.

How a SPAC is formed and operates

It all starts with a group of financial professionals, known as sponsors, establishing a shell company that has no actual business operations. The sponsors attract other investors to put money into the company. Once enough capital is raised, the shell company is listed on the stock exchange. In the United States, this typically happens at a share price of $10, and in Finland, at a price of EUR 10. After the listing, the share price is determined by the market and can be traded like any other listed share.

After the listing, the SPAC's actual task begins: finding and acquiring a suitable, unlisted target company. Once a target is found and the acquisition is completed, the SPAC and the target company merge, and the SPAC's shares are exchanged for the acquired company's shares. In practice, the SPAC's investors currently become owners of the target company.

A SPAC's lifecycle can be divided into three phases: first, the IPO; then, the search for a target company; and finally, the acquisition or merger. An investor can enter at any of these stages, either by participating directly in the IPO or by purchasing shares on the secondary market afterward.

Risks to be aware of

The biggest unique characteristic of SPAC investing is uncertainty: when money is invested in a shell company, it is not known in advance which company will ultimately be acquired. Since a SPAC has no operating history, the only basis for evaluation is the sponsors' past track record, and past successes do not guarantee future performance.

One key risk is related to the time limit. A SPAC typically has 24–36 months from its listing to find and complete an acquisition. If a suitable target is not found within the specified period, the company will be dissolved, and the raised funds will be returned to investors after deducting expenses.

The acquisition process itself carries its own risks. The acquisition process is long, complex, and expensive. Costs burden the SPAC's earnings regardless of whether the transaction is completed. The target company must also meet the requirements of the stock exchange and local legislation, and additional regulatory demands can slow down the process and increase costs.

An investor's influence is limited: the target company must be approved at the SPAC's general meeting, and an individual shareholder's voting power depends on their ownership stake. If a shareholder votes against the acquisition, they typically have the right to redeem their shares at a predetermined price, often corresponding to the IPO price. A similar right of redemption may also apply when a transaction has just been completed.

Potential conflicts of interest should also be borne in mind. Sponsors typically do not receive a salary for their work, but they can acquire special sponsor shares and options that materialize only when an acquisition is completed. This may incentivize sponsors to prioritize the completion of a deal rather than selecting a target company based on entirely objective criteria.

What to consider

Since a SPAC is essentially a pile of cash listed on the stock exchange awaiting an investment target, the investment decision is primarily based on trust in the sponsors rather than on the company's own business operations or financial figures, which do not yet exist. Therefore, it is advisable to carefully examine who the sponsors are, what they have achieved in the past, and what incentives they have. In Nasdaq Helsinki, Canatu and Purmo, which was previously delisted through a tender offer, went public via a SPAC arrangement.

IQM

The Finnish quantum computing company IQM is coming to the New York Stock Exchange through a SPAC arrangement. The publicly listed shell company Real Asset Acquisition Corp will merge with IQM, allowing IQM to access the US stock market. The company also plans a dual listing on the Helsinki Stock Exchange.Read more about IQM here: