Jamba in the Blender

Investors trying to get in on the Jamba Juice craze that's sweeping Wall Street these days could wind up pureed if they're not careful.

Shares of Services Acquisition Corp. International(SVI Quote) are up 40% to $10.45 since last week's announcement that the so-called blank-check company plans to acquire Jamba, a national chain of smoothie stores, in a deal valued at $358 million. The acquisition is being hailed by some as proof that the blank-check IPOs recently flooding the market can pay off big for investors.

Over the past three years, hedge funds and other investors have sunk more than $2 billion into 47 initial public offerings by blank-check companies -- fledgling businesses looking to raise money simply to acquire other businesses. But to date, only a handful of those blank-check companies have completed a merger with an actual business, and that includes the proposed Jamba Juice merger.

Services Acquisition's deal is the most high-profile blank-check merger in the works. For Jamba, a 15-year-old company with 532 stores in 26 states, it's an opportunity to raise the cash necessary to compete with other national specialty food chains, such as Starbucks(SBUX Quote).

But the ones most likely to score big on the deal are the well-connected corporate insiders who cobbled together Services Acquisition. Other big winners are the hedge funds that invested in the blank check's $127 million initial public offering last July -- and a subsequent private placement that will raise an additional $231 million to finance the merger.

Technically, the Jamba takeover is a reverse merger, because it's one in which a private company -- Jamba -- goes public by merging with a publicly traded shell: Services Acquisition.

However, investors currently buying up shares of Services Acquisition in the hope of getting in on the ground floor of a national chain face the risk of getting squeezed once the deal is completed.