A special purpose acquisition company is a public trading company created to acquire or merge with an exciting company. In this case Nikola merged with General Motors on heavy-duty and pickup trucks. The initial merger with VectorIQ founded by a former general motors executive is what caused the initial commitment of fraud to unfold, as the Nikola company went public in June of 2020 with USD 700 million in the initial merger. The report was labeled false and defamatory to incise the market to make money for short sellers. The intent was to put blank checks companies in more investors' portfolios. The fraudulent activities led to the founder articulating the company as a successful business when it was a starter company with no proven technology to support its claims. I think it was an easy way to make money and they abused the lack of security. 

• How do you think the charges against Nikola will affect SPAC investment in general? Will the scrutiny stigmatize the industry?

• Do you think there should be tighter ethical or regulatory standards around SPACs?

The SPACS has generated a lot of attention in company boardrooms as its two-year life span involving the merger can aid in the company's public equity and shorten the IPO process. Although it has been proven beneficial, the SPAC isn't profitable for every company looking to go public as many investors may lose money. 

Do you think going public via a SPAC enabled Nikola and its founder to commit fraud? Why or why not?

How do you think the charges against Nikola will affect SPAC investment in general? Will the scrutiny stigmatize the industry?

Do you think there should be tighter ethical or regulatory standards around SPACs?

Answer rating: 100% (QA)

The charges against Nikola could potentially impact the perception of SPAC investments Investors may ... View the full answer