Please ensure Javascript is enabled for purposes of website accessibility

Are Chamath Palihapitiya's SPACs IPOD and IPOF Worth Buying Now?

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

These two blank-check companies are well off their highs.

Out of the six SPACs Chamath Palihapitiya has launched so far, there are two that have yet to identify their acquisition targets. Social Capital Hedosophia Holdings IV (IPOD 0.10%) and Social Capital Hedosophia Holdings VI (IPOF -0.40%) are blank-check companies with roughly $400 million and $1 billion, respectively, to invest in taking target companies public, and both stocks have fallen considerably in recent weeks.

In this Fool Live video clip, recorded on March 15, Fool.com contributors Matt Frankel, CFP, Brian Withers, and Dan Caplinger discuss whether these two blank-check companies might be worth a look now.

Matt Frankel: Chamath has two pre-deal SPACs, meaning SPACs that are still looking for their acquisition target in the market. If you want to get in on the ground floor of his next big idea, their ticker symbols are I-P-O-D and I-P-O-F. This is Social Capital Hedosophia Holdings four and six. We'll discuss what happened with five in just a minute. But these are his two existing blank-check companies. IPOD raised a little over $400 million, IPOF raised a little over $1 billion. Other than the size, these are just two of Chamath's blank check companies. Do either of you own these? Have any opinion on what they might acquire? I'll weigh in if neither of you do.

Dan Caplinger: I will say, I did hear a little bit when Richard Branson was talking about bringing Virgin Orbit public, that some folks speculated well, Chamath worked with Virgin on the Virgin Galactic. Maybe IPOD or IPOF would end up being the vehicle for that especially, once VG Acquisition got used up for 23andMe. These SPACs, they ran up, they were up around $15, $16 a share. When we had sort of the SPAC high-growth pullback, they came really crashing back down in another around $11 or $12, I think-$11 or $12 seems like a reasonable deal to me, $15 or $16 without a target announced seemed high to me. It'll be interesting to see what happens with these guys especially, with Chamath doing all these PIPE investments now instead doing stuff for his SPACs, it's interesting to see.

Brian Withers: I'm going to use a -- I'm going to tell you about what Forrest Gump thinks about SPACs. He says that SPACs are like a box of chocolates, you'll never know what you get. That's my take on it. As tight as with my portfolio is with 21 stocks, I want to know what I'm buying before I put it in.

Frankel: I would push back on that. SPACs are like a box of chocolates, but you get to pick who's making the chocolate.

Withers: There you go.

Frankel: That's a lot of what people are buying here. Another one that I heard today is a candidate is Plaid after their merger with Visa fell apart. Because we know Chamath likes the fintech space. If he can get it at the right price, I could see them going after that one.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Social Capital Hedosophia Holdings Corp. IV Stock Quote
Social Capital Hedosophia Holdings Corp. IV
IPOD
$9.94 (0.10%) $0.01
Visa Inc. Stock Quote
Visa Inc.
V
$207.56 (4.29%) $8.53
Virgin Galactic Holdings, Inc. Stock Quote
Virgin Galactic Holdings, Inc.
SPCE
$6.56 (0.15%) $0.01
Social Capital Hedosophia Holdings Corp. VI Stock Quote
Social Capital Hedosophia Holdings Corp. VI
IPOF
$9.97 (-0.40%) $0.04
VG Acquisition Corp. Stock Quote
VG Acquisition Corp.
VGAC

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.