Social Capital heralds new model for unicorn IPOs
‘Blank cheque’ company starts trading and looks for a tech giant to bring to market
By Nicole Bullock in New York and Tom Braithwaite in San Francisco
A former Facebook executive and other Silicon Valley entrepreneurs want to rewrite the playbook for tech IPOs, listing a company on Thursday with the aim of providing a new path to the public market for so-called unicorns.
Social Capital Hedosophia, a special purpose acquisition company, or Spac, late on Wednesday sold 60m units at $10 a piece, raising $600m, more than had been expected.
Each unit, which consists of one share at $11.50 and one-third of one warrant, rose 3.1 per cent to $10.31 in the first day of trading.
The Spac, also known as a “blank cheque company” will use the proceeds to buy a tech “unicorn”, as private companies valued at $1bn or more have become known. Chamath Palihapitiya, the former vice-president of user growth at Facebook who is the Spac’s chairman and chief executive, told the FT he was targeting a company with a valuation of $3bn to $20bn.
He said he had already received a “tidal wave” of inquiries from the chief financial officers “of some of the biggest most obvious unicorn companies” and the group…
