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NASDAQ CEO Adena Friedman on why SPACs have become such a hot ticket in the wake of COVID-19

NASDAQ CEO Adena Friedman: SPACs "have 18-24 months to find companies to populate spac, then investors get another bite at the apple."

Video Transcript

ADENA FRIEDMAN: If you think about the types of people who are coming into the SPAC market, they're generally very well known investors or very well-known CEOs who have a great track record. And so from the investor perspective, they could choose to raise money through private vehicles and through LPs, which they normally do, or in this particular case, they're choosing to raise money in the public markets to allow retail to be a part of it.

But then the interesting thing about SPACs is the way it works is you have essentially 18 to 24 months to find a company to populate the SPAC. And at the time that you populate the SPAC, the investors have another bite at the apple. They get to vote on whether or not they support the company that you choose to acquire. So in a way, investors are putting their money behind a great name. They're then saying, well I still have some control over the outcome here because I get to vote on the ultimate company, and that seems like a pretty interesting way to deploy capital in this environment right now.