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Wednesday, January 22, 2020

Podcast: SPACs Are Back in Style - Nasdaq

A short seller accused Tesla’s cars of being unsafe. Boing’s grounded 737 MAX plane won’t fly before mid-2020. And why “blank check” companies are hot on Wall Street.

Listen to Wednesday morning’s episode of Barron’s daily podcast.

Three numbers to start your day:

—at least that’s what the electric car maker claims.

What’s going on here? Well, Tesla (TSLA) is rebuking claims that some of its most popular car models could be unsafe. It all started when an investor named Brian Sparks recently introduced a safety petition calling for Tesla cars to be recalled. Then, on Friday, the National Highway Traffic Safety Administration said it would review the petition. The petition starter, Sparks, it’s worth noting, is shorting Tesla stock.

Tesla has called the claims “completely false”. But investors don’t seem too worried. The stock has been pushed to record highs over the last three months—and it has continued to surge after the car maker defended its safety record.

—a turbulent day for the airplane maker’s stock. The company said that it doesn’t expect its troubled 737 MAX jet to begin flying again before mid 2020—in other words, up to six months from now.

The plane has been grounded since March, after two deadly crashes raised concerns about its safety.

Boeing (BA) has stopped producing the 737 MAX as it tries to deal with the regulatory approvals necessary to get the plane back in the air.

—in IPOs last year. Those are also known as SPACs— companies that go public and then look to acquire a business. And raising almost 14 billion dollars is quite a remarkable accomplishment, especially in a year when some of the biggest IPOs ended up being panned by investors.

SPACs—or, ‘special purpose acquisition companies’—got a bad rep after poor performance in the 1990s.

But a new wave of SPACs are now coming back in style. SPACs are buying better companies, and they’re also giving the old structure a new luster by hiring high-quality executives—like former Honeywell chief David Cote.

Numbers by Barron’s is our daily podcast. Find out more here.

Write to today’s host Ben Walsh at ben.walsh@barrons.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Podcast: SPACs Are Back in Style - Nasdaq
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