SPACs are the new IPO: Wilbur Ross

SPACs are "replacing the IPO", especially in the technology industry, former Secretary of Commerce Wilbur Ross told FOX Business' "Mornings with Maria."

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Wilbur Ross: "Well, I had done a SPAC years ago before going into government back in 2014, and the SPAC I did then was the largest one to that point in time and it worked out pretty well. So it's not something new to me, although nowadays it's been very much discovered by the market in general. There were $90 billion of SPACs raised last year, and I think this year is headed toward another new record. SPACs basically have been replacing the IPO, especially for technology companies. And that's a good thing because it brings more capital to high tech people at an earlier stage of development. The challenge it poses, though, is it's much harder to make forecasts for people who don't even yet have revenues than it is for companies that are more mature. So the analytical challenge is greater.

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Surely, SPACs are able to go into any industry in any place in the world, and ours as a legal matter can also do that. But we indicated in the offering materials that our focus will be on a few areas to the degree we can space, outer space, semiconductors, the challenges posed by autonomous driving and by electric vehicles and advanced manufacturing. Those are areas that we think inevitably are the future of the country, and those are also ones in which we have a good deal of experience."

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