Topic: How To Invest

Spinoffs & Takeovers Hotline – Friday, June 25, 2021

Article Excerpt

23ANDME HOLDING CO., $11.85, symbol ME on Nasdaq, is a provider of consumer genetics testing. It has created the world’s largest crowd-sourced platform for genetic research; more than 80% of its customers have agreed to have their genetic profiles available on the platform. In February 2021, VG Acquisition Corp., a special purpose acquisition company or SPAC backed by British billionaire Richard Branson’s Virgin Group, announced that it would merge with privately held 23andMe to complete the qualifying transaction required for this type of acquisition. SPACs are a specialized kind of IPO (Initial Public Offering, or new stock issue). One key difference is that SPACs, also referred to as “blank-check companies,” raise money from investors without providing a detailed business plan. The SPAC goes through an IPO-like process, raising some money and getting listed on an exchange. Its next goal is to find another business to buy, usually within two years. Then the two companies merge, giving the purchased company a relatively quick…

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