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Chamath Palihapitiya Launches Three More SPACs: IPOD, IPOE, IPOF

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Chamath Palihapitiya Launches Three More SPACs: IPOD, IPOE, IPOF

Fresh off the announcement that Social Capital Hedosophia Holdings Corp II (NYSE: IPOB) will merge with OpenDoor, Chamath Palihapitiya quietly filed for three new special purpose acquisition company IPOs Friday after the market close. 

The Offerings: The three SPACs follow Palihapitiya’s plan to launch SPACs with symbols from "IPOA" to "IPOZ."

Social Capital Hedosophia Holdings Corp IV (NYSE: IPOD) plans to sell 35 million shares at $10 each for proceeds of $350 million.

Social Capital Hedosophia Holdings Corp V (NYSE: IPOE) plans to sell 65 million shares at $10 each for proceeds of $650 million.

Social Capital Hedosophia Holdings Corp VI (NYSE: IPOF) plans to sell 100 million shares at $10 each to raise $1 billion.

All three SPACs come with one-fourth of a warrant to buy a share at $11.50.

Credit Suisse is the underwriter on all three SPACs.

Technology Focus: All three SPACs target the technology industry. In the U.S., 170 private technology companies are valued at $1 billion or more, according to the SEC filings.

From 2010 to 2014, there were an average of 45 technology company IPOs yearly in the U.S. That figure has fallen to an average of 35 from 2015 to 2019.

The SPACs have a wide range of technology companies from which to choose. 

Palihapitiya's Existing SPACs: Social Capital Hedosophia Holdings II raised $360 million. Shares are trading at $14.91 and have gained over 30% since the OpenDoor merger was announced.

Social Capital Hedosophia Holdings III (NYSE: IPOC) raised $720 million and shares are trading at $12.56, with no acquisition target yet announced. 

The original Social Capital Hedosophia Holdings raised $600 million and later merged with Virgin Galactic (NYSE: SPCE), where Palihapitiya is the chairman.

Palihapitiya is also involved with other SPACs. He was a financer for the Trine Acquisition Corp (NYSE: TRNE) SPAC that is taking Desktop Metal public. Palihapitiya was also a financer for Fortress Value Acquisition Corp (NYSE: FVAC), which is merging with MP Materials, a rare earth metal company trying to solve climate change.

About Chamath Palihapitiya: “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.

Palihapitiya is a former vice president at Facebook Inc (NASDAQ: FB) and was part of the social media company's original management team.

He also served on the board of directors for Slack Technologies (NASDAQ: WORK).

Disclosure: Author is long shares of IPOB. 

 

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