ShmoopTube

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Finance, a la shmoop. What is a blank check company? All right well when Russia

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was the big bad USSR in the Cold War of the 70s there was a secrecy about everything [The USSR shown on the map]

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that they did as they expanded their territory, [Formation of tanks driving]

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oh wait that's a blank Czech company a little different... All right a blank check

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company yeah you knew we were gonna do that come on, well it's actually an

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investment vehicle that in practice well isn't that far off the Russian flavor of [Definition of a blank check company written on a 100 dollar bill]

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things. Specifically a blank check company isn't specific, see what we did there...

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Hence the word blank in there, think of it as the operating version of a venture capital

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partnership or of a private equity growth capital company thing.. yeah it's one of

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those. There's no specific game plan or structure other than to just go make [Football players talking to their coach]

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money from shareholders. Well the dough in this kind of

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investment vehicle is generally viewed as weaponry to acquire companies. [Pile of money attacks the company]

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Usually speculative dead dying or otherwise extremely cheap companies

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think penny stocks delisted from Nasdaq zombies with the view that the operators [Zombie]

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of the blank cheque company can take over the company, run it better, improve

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profit margins and regenerate growth. Well one type of blank cheque company is

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called SPAC, stands for special purpose acquisition corporation. [The meaning of the letters is shown]

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Which might have a sole directive of rolling up or consolidating a niche

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industry like yes of course the whoopee cushion industry, where if there exists [Whoopee cushion industry]

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the Minkleman family and the Snookerdoodle family they're kind of the Coke

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and Pepsi of whoopee cushions, and if they merged well then they would have a [The two families with Coke and Pepsi logos over their heads]

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virtual monopoly over whoopee cushions. They could raise prices and profit [The two families come together and a monopoly logo appears]

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margins would soar with cheaper rubber supplies and they'd go from being worth 1

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whoopie to being worth several yeah that'll put some wind in your cushion... [Several whoopee cushions appearing]

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That's a blank check company go buy stuff raise price. [Pair of kids prank a mum with a whoopee cushion]

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