The vehicle is a partnership between veteran investors Chamath Palihapitiya and Ian Osborne, who have created three special-purpose acquisition companies (SPACs) in the past. Bloomberg writes that they've now confidentially filed with the Securities and Exchanges Commission (SEC), according to unnamed sources.
A SPAC means a kind of blank check company solely forged for the purpose of taking companies public without going through the entire IPO process or identifying an acquisition target. They have become a trend lately, with executives like Gary Cohn, Bill Ackman and Barry Sternlicht pursuing the mode in recent weeks.
The SPACs have been setting their sights on "unicorn" companies, meaning firms valued at more than $1 billion, PYMNTS writes. Ackman's case, he said, grew out of watching the disappointing private investment and IPO failures amid the tumultuous stock markets of the pandemic, and wanting a more surefire way to fund promising ventures. While these types of companies don't have operations of their own, the aim is to allow investors to throw money in to boost mergers and acquisitions in the long run.
Social Capital Hedosophia, the fourth in as many as 26 deals of this type, comes as Palihapitiya said on a recent podcast that he's reserved tickers from "IPOA" to "IPOZ" on the New York Stock Exchange, Bloomberg reports.
Social Capital Hedosophia said its second SPAC, Social Capital Hedosophia Holdings Corp. II, would be merging with property technology firm Opendoor. The first SPAC merged with Virgin Galactic, the space company run by billionaire Richard Branson.
Other blank check firm launches have included Trebia Acquisitions Corp's $414 million initial public offering (IPO) in June, specifically saying that it wouldn't be identifying a target and that no one else had done so, either. Their idea was to build up the cash now and talk about goals at a later time.
Also in June, Hudson Executive Investment Corp. put out a $360 million IPO on the NASDAQ.