What happened
One of famous venture capital investor Chamath Palihapitiya's special-purpose acquisition companies, or SPACs, was soaring on Thursday. As of noon EST, Social Capital Hedosophia Holdings V (IPOE) was higher by 30%, and shares had been halted.
So what
As is usually the case when predeal SPACs suddenly move sharply, this "blank check" company had just found its acquisition target. And it's a big one.
Image source: Getty Images.
Social Capital Hedosophia announced that it would use this $800 million SPAC to merge with fintech start-up SoFi, whose IPO has been rumored for some time. SoFi is primarily an online lender, offering personal loans, student loan refinancing, and other lending products, in addition to a stock trading platform and robo-advisor.
The deal values SoFi at $8.65 billion, which includes $2.4 billion of new capital that is being contributed as part of the transaction.
Now what
SoFi will be the fourth company taken public by Chamath Palihapitiya's SPACs, following Virgin Galactic (SPCE -1.09%), Opendoor Technologies (OPEN -3.72%), and Clover Health (IPOC). It's fair to say that this is an extremely impressive track record.
Now that Social Capital Hedosophia Holdings V has found its acquisition target, two more of Palihapitiya's SPACs are still looking for theirs. Social Capital Hedosophia Holdings IV (IPOD) raised $400 million in 2020, while Social Capital Hedosophia Holdings VI (IPOF) is a $1 billion SPAC. Their stock prices are higher by 9% and 10%, respectively, as investors aim to get in on the next big IPO announced by the successful SPAC leader.
