- Charlie Munger said SPACs are an "irritating bubble" at the Daily Journal annual meeting Wednesday.
- The Berkshire Hathaway vice-chairman said the world would be better off without the speculative investment vehicles.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
Berkshire Hathaway vice-chairman Charlie Munger blasted SPACs at the Daily Journal annual meeting on Wednesday, saying that the "world would be better off" without the investment vehicles.
"Crazy speculation in enterprises not even found or picked out yet is a sign of an irritating bubble," Munger said. "The investment banking profession will sell sh-t as long as sh-t can be sold."
Special purpose acquisition companies, or "blank check companies," list on a stock exchange to raise money in the hope of finding and merging with a target company to take it public. The model can be extremely lucrative for the initial sponsors of the SPAC, who take a big stake for a small sum. But it also poses risks for investors who bet on the success of the SPAC before even knowing the business that will be acquired.
Warren Buffett's right-hand man also added that the SPAC craze "must end badly," but he isn't sure when that will happen.