Social Capital SPAC surges 25% after it confirms tie-up with Opendoor, Chamath Palihapitiya calls it his ‘next big 10x idea’

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It’s official. After reports surfaced last week that Opendoor was in talks with Social Capital Hedosophia Holdings Corp. II, a SPAC led by billionaire investor Chamath Palihapitiya, both parties confirmed the tie-up today.

In a deal that values Opendoor at an enterprise value of $4.8 billion, the property technology company will go public via a merger with Social Capital. The deal will provide up to $1 billion in proceeds to help fund Opendoor’s growth initiatives.

Opendoor is a property technology company that directly buys homes from sellers, makes improvements to the homes, and then resells them.

The convenience afforded to home owners who sell to Opendoor is a quick three-day process of receiving an all-cash offer on their home, according to Palihapitiya, among other things. 

Shares of Social Capital Hedosophia Corp. II surged as much as 25% to $16.36 in Tuesday morning trades.

Read more: A Wall Street expert breaks down why 3 smaller retailers are poised for gains amid a down economy — and says they’re the best stock-market alternatives to behemoths like Costco and Target

In an interview with CNBC, Palihapitiya highlighted that real estate is the largest market that has yet to be disrupted by online technologies, and that the COVID-19 pandemic has only heightened the need to move the home buying and selling process online.

Palihapitiya estimated that if Opendoor is able to capture 4% of its target market, that would equate to more than $50 billion in revenue.

Source: https://www.businessinsider.com/social-capital-spac-opendoor-confirms-merger-chamath-palihapitiya-deal-tech-2020-9

Social Capital, Open Door Labs, Inc., Chamath Palihapitiya, Mergers and acquisitions, Special-purpose acquisition company, Publicly listed company, Eric Wu

Actu monde – CA – Social Capital SPAC surges 25% after it confirms tie-up with Opendoor, Chamath Palihapitiya calls it his ‘next big 10x idea’