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Lessons from history: Are SPACs totally Knuts?

When it comes to the Spacs craze, we've been here before. It didn't end well.
Lessons from history: Are SPACs totally Knuts?
  • Spac investments are booming...
  • ...a bit like London-listed shell companies during the heyday
  • That didn't end well - remember Knutsford?

It’s late 1999. The dotcom boom is in full swing. Press shots of a team of management gurus dubbed the “Awesome Foursome” leer out from the business pages (and some front pages) of the nation's broadsheets and tabloids. A shell company called Knutsford is bringing together this shimmering roll-call of talent: retail wonders Julian Richer and Archie Norman and property tycoons Nigel Wray and Nick Leslau.

Seeded with a small pot of cash by the foursome, in a deal valuing the shell company’s shares at 2p, the price of the stock swiftly rockets 2,500 per cent as retail investors scrambled to get a slice of the meagre free float. Why wouldn’t they? Just imagine what magic this management team will weave…

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