Social Capital Hedosophia has filed confidential plans with the SEC to raise $ 500 million for the newest blank check company, according to a new report in Bloomberg.
It will be the fourth Special Purpose Acquisition Company (SPAC) to be raised by the team led by Chamath Palihapitiya and his longtime investment partner Ian Osborne.
Amazingly, there may still be dozens in the works. In the “All-In Podcast” jointly moderated by Palihapitiya, he recently revealed that the symbols were reserved by “IPOA”. to “IPOZ” on the New York Stock Exchange. He also said he had $ 1
What is the game On the podcast, Palihapitiya referred to the Federal Reserve’s economic and interest rate forecasts and their plans to keep interest rates at zero for years to come. “I mean, honestly,” said Palihapitiya, “there is no way to get any kind of short-term inflation.”
Therefore, he believes investors “are paid to last a long time [on] Stocks because your risk-free rate is zero and will soon be negative. And what should you do as an asset manager? “
As he put it, “Let’s say you’re the California pension system, you have hundreds of billions of dollars and you have to generate five or 6% a year to make sure your pension is not insolvent, and the government pays you zero.” . If everyone is in this situation, then you are mostly long stocks. . All of these opportunities are generally buying opportunities and I am more optimistic now than I was before. “
Indeed, when it comes to private or public market investment, Palihapitiya said, “I think they are really just public companies [that are worth getting behind]. . . I mean no offense, but if you are a very good stock picker in the public markets you will get better returns [than] Sequoia, benchmark – name your best venture fund. I see all of these people on Twitter talking about how good they are in the early stage markets, but they’re all small dollars and not that meaningful. “
He certainly has reason to feel encouraged. The first SPAC of Social Capital Hedosophia, The company was founded in 2017 and finally merged with the space tourism company Virgin Galactic last year. Public market shareholders are now worth just over $ 4 billion.
The company’s second fund, launched in April, announced yesterday that it will merge with Opendoor, a company that buys and sells residential real estate and which may have struggled with a traditional IPO due to its still uncertain viability.
Social Capital Hedosophia’s third SPAC, which also opened in April, has not yet announced its destination, but the company has announced that it will use its IPO proceeds to purchase a technology company that is primarily based outside of the United States.
SPACs – which didn’t have a great reputation in the past – have certainly intrigued a growing number of other investors. According to SPACInsider, almost 100 SPACs have already been increased in 2020, up from just 7 a decade ago.
Although Sequoia Capital is having an outstanding year – given its stakes in Zoom, Bytedance, and Snowflake among many other leading companies – its U.S. boss Roelof Botha suggested in an interview yesterday that Sequoia hasn’t ruled out the possibility of forming SPACs, despite hinting at has that this is unlikely. “I love the fact that there is more innovation,” he said. “It gives companies more choice.”