Blank-Check Company

AAA

DEFINITION of 'Blank-Check Company'

A company in a developmental stage that either doesn't have an established business plan or has a business plan that revolves around a merger or acquisition with another firm.

INVESTOPEDIA EXPLAINS 'Blank-Check Company'

These companies are generally speculative in nature and will issue penny stock in order to finance future operations.

According the Securities Act of 1933 (under Rule 419), blank-check companies are required to disclose the terms and conditions of their offering as well as place any funds received from the offering into an escrow account.

RELATED TERMS
  1. Acquisition

    A corporate action in which a company buys most, if not all, ...
  2. Blank Endorsement

    A signature by the creator of an instrument, such as a check, ...
  3. Escrow

    A financial instrument held by a third party on behalf of the ...
  4. Blank Check Preferred Stock

    A method companies use to simplify the process of creating new ...
  5. Merger

    The combining of two or more companies, generally by offering ...
  6. Penny Stock

    A stock that trades at a relatively low price and market capitalization, ...
Related Articles
  1. The Lowdown On Penny Stocks
    Investing Basics

    The Lowdown On Penny Stocks

  2. SPACs Raise Corporate Capital
    Investing

    SPACs Raise Corporate Capital

  3. What is a blank-check company?
    Investing

    What is a blank-check company?

  4. The Basics Of Mergers And Acquisitions
    Options & Futures

    The Basics Of Mergers And Acquisitions

Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  3. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  4. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  5. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  6. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
Trading Center