Bill Gates Is Right About the Crazy Rush for SPACs

When’s the right time to join the stock market? These days companies taken public by special purpose acquisition companies are raising billions of dollars based on little more than a few prototypes and a business plan.

Never mind profits, many of the businesses targeted by SPACs for mergers don’t even have revenues yet, especially in the electric-vehicle industry. Money from blank-check companies — which raise cash in an initial public offering before finding a promising private firm with which to combine — is helping fund capital-intensive factories and technology development. But Microsoft Corp. founder Bill Gates worries that we’ve flipped from an environment in which companies were waiting too long to go public to one where they’re doing it too soon.