This guide cuts through the hype surrounding Special Purpose Acquisition Companies and focuses on how they actually function in 2026. It breaks down SPAC mechanics—units, common shares, and warrants—and explains why institutional players use SPACs as low-risk cash substitutes through redemption arbitrage, while retail speculators absorb most of the downside. The analysis highlights dilution, excessive redemptions, and the regulatory crackdown on forward-looking projections that once fueled SPAC mania. The core reality is simple: after the merger closes, the NAV price floor disappears, capital often evaporates, and performance frequently lags the broader market. This is not a promotional playbook—it’s a survival guide for investors who want to understand where the risk actually sits and who really gets paid.