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A Special Purpose Acquisition Company is an investment vehicle with a two-year life span during which it looks for a private company to acquire or merge with. Their origin can be found in the reaction to the traditional IPO method of going public. This expensive and often difficult to achieve method has given companies the incentive to look for alternative methods. This paper conducts an extensive literature study to unravel their structure. In addition, this study also tries to investigate the stock price reaction on the day these companies announce a possible acquisition of a target company using event study methodology. Furthermore, linear regression analysis is used to see which factors have an impact on these returns. Our results show that the announcement day returns are no different from the market returns. Also, none of the variables that were hypothesized to have an effect, turned out to significant.