Chamath Palihapitiya has been one of the key figures in the special purpose acquisition company market, bringing three SPACs public under the tickers "IPOA," "IPOB" and "IPOC" on the New York Stock Exchange.
Social Capital Hedosophia SPACs: Palihapitiya founded Social Capital Hedosophia as a concept called “IPO 2.0” with Ian Osborne, the CEO and co-founder of Hedosophia.
The goal is to use the alternative path to traditional IPOs to bring innovative tech companies to the public market.
“My ambition is to be our generation’s Berkshire Hathaway. It’ll be a Berkshire, a holding company that, instead of holding Gillette and Coca-Cola and McDonald’s, will hold technology businesses,” Palihapitiya told Fortune earlier this summer.
On his "All-In Podcast," Palihapitiya revealed he has reserved the symbols from "IPOA" to "IPOZ" on the New York Stock Exchange.
He said he hopes to fulfill that vision and is proud of what his company has done for the SPAC market.
In 2000, there were more than 8,000 public companies on American exchanges versus 4,000 now, the Social Capital CEO said.
Strong demand and a “receptive audience” are in place for private companies to go public via SPACs, he said.
Despite a rise in the number of SPACs, Palihapitiya cautioned both the founders of SPACs and potential acquisition company leadership teams that the process is a hard one.
One to two others will dominate the SPAC space, he said, adding that acquirers need to marry their operators and provide more than just capital.
Palihapitiya also said he has $100 million of his own personal money involved in each deal, representing “skin in the game.”
About Chamath Palihapitiya: Palihapitiya is a former vice president at Facebook Inc FB and was part of the social media company's original management team.
He served on the board of directors for Slack Technologies WORK and is the chairman of Virgin Galactic Holdings SPCE.
Palihapitiya has been outspoken about many of the companies in where he has invested or worked.
In 2016, Palihapitiya said Amazon.com Inc AMZN would increase 10x in 10 years, hitting a value of $3 trillion by 2025.
In July, Palihapitiya said Tesla Inc. TSLA was worth trillions due to the push for renewable energy, calling Tesla cars “the first wave of growth” for the company.
Palihapitiya's Performance: Palihapitiya led the reverse merger of Virgin Galactic Holdings through his "IPOA" SPAC.
Social Capital Hediosophia Holdings Corp II IPOB is now trading near $13 after spiking last week on rumors the company was acquiring OpenDoor, a house-buying online platform backed by SoftBank Group SFTBY.
Social Capital Hedosophia Holdings Corp III IPOC shares were trading at $11.57 at last check Monday.
Virgin Galactic shares are up 43% in 2020. Shares traded as high as $42.49 in 2020 before hitting their current $17 level.
Palihapitiya is also involved with other SPACs. He was a financer for the Trine Acquisition Corp TRNE SPAC that is taking Desktop Metal public. Palihapitiya was also a financer for Fortress Value Acquisition Corp FVAC, which is merging with MP Materials, a rare earth metal company trying to solve climate change.
“My belief is that rare earths are a highly asymmetric way to bet on a multi-decade trend of electrification and climate change tech,” Palihapitiya said on Twitter.
Trine Acquisition shares are up 27% in 2020 as they await the final merger vote with Desktop Metal. Fortress Value shares are up over 40% since their merger was announced with MP Materials.
Disclosure: The author is long shares of IPOB at time of writing.
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