Social Capital Hedosophia Holdings Corp VI (NYSE:IPOF) is the sixth instalment of Chamath Palihapitiya’s owned SPAC ventures.
Last year, rumours broke that IPOF was in talks with luxury fitness brand Equinox Holdings regarding a merger opportunity, cited from a Bloomberg report. However, in July 2021 Bloomberg reported that the talks between both companies had failed based on valuation concerns.
Fast forward to today, IPOF is still looking for a target to acquire and investors are keeping a close eye on the stock. The IPOF stock price reached heights of $17.81 a share before descending alongside the majority of the SPAC sector.
With that being said, lets breakdown what investors need to know about the IPOF merger rumours and news.
The IPOF Merger Breakdown
Social Capital Hedosophia Holdings Corp VI (NYSE:IPOF) is a Special Purpose Acqusition company (SPAC or Blank Check company) which aims to merge with high-growth tech firms who are looking raise funds by going public.
The SPAC venture is owned by Billionaire Chamath Palihapitiya, who has experience in successfully taking companies such as Virgin Galactic public.
IPOF raised $1 billion last year through offering 100 million shares for $10 each to PIPE investors. The SPAC has been trading relatively on par with its PIPE offering price of $10 a share. The IPOF merger date will be announced once the SPAC lands on a target to take public.
IPOF Rumoured Targets
As noted above, it seemed IPOF had picked a merger target earlier this year, following a Bloomberg report rumoured a potential merger with luxury fitness brand Equinox Holdings. The rumoured talks fell out in July, and IPOF is still yet to find a target.
In recent months, investors began speculating a potential merger between IPOF and chat software Discord. Discord is an instant messaging and digital distribution platform that has over 300 Million active users, becoming a staple platform for gaming communities.
However, in November Discord raised roughly $500 Million at at $15 Billion valuation. The equity raising suggests Discord may not be looking to go public at this stage, however does not rule them out completely. The rumoured Discord and IPOF merger is yet to be confirmed by either party, and does not have much ground to stand on.
Investors have also speculated potential targets such as SpaceX, as Chamath has recently stepped down as Chairman of Virgin Galactic. IPOA was the first SPAC venture by Chamath who took Virgin Galactic public. However, at this stage both Discord and SpaceX remain purely speculative targets for IPOF.
How have previous SPAC’s performed under the guidance of Chamath Palihapitiya?
Over the past 12 months, 4 of the 6 SPAC ventures under the wings of Chamath Palihapitiya have successfully taken emerging tech companies public. Firstly, one of the largest mergers to date was the IPOA merger with space tourism company, Virgin Galactic. Virgin Galactic is currently trading 20% lower than its PIPE offering price.
The second SPAC venture was IPOB, which merged with real-estate platform Opendoor Technologies. The SPAC venture was also sucessfull and the merged company currently trades 8% higher than its PIPE offering price of $10.
However, the third SPAC venture IPOC, is viewed by some investors as a failure with the merged company trading below the $10 PIPE offering price. IPOC merged with healthcare company, Clover Health. The Clover Health share price has been battered in recent quarters with Hindenburg reports of fraudulent activity alongside widening losses.
The last completed SPAC merger was the IPOE – Social Finance merger which has performed better in comparison to its IPOC counterpart. SoFi stock is currently trading 9% above its PIPE offering price.
The Bottom Line: IPOF merger
Overall, despite the lowered interest in SPAC mergers in recent quarters, the ventures pursued by Chamath Palihapitiya do have a high success rate. At current, both IPOF and IPOD are looking for merger targets. We will update our viewers on any breaking news regarding both SPAC’s.
The information above is not financial advice and does not constitute as a recommendation. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
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