Lloyd Blankfein on how the SPAC rush could go wrong for investors


Former Goldman Sachs CEO Lloyd Blankfein sees trouble ahead for SPACs, the special purpose acquisition companies being used to take companies public.

While the SPAC trend shows no sign of cooling down amid high demand for shares of new companies, investors need to be careful, Blankfein said Monday on Squawk Box. That’s because the SPAC process circumvents the rigorous due diligence of the normal IPO process, according to Blankfein.

“You’re getting companies public, but you’re getting them public in a two-step process where one of the elements of an IPO is dropping out,” Blankfein said.

“When the initial SPAC goes public, you are scrutinizing a shell company, possibly the reputation of the…


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