Opendoor goes public through social capital hedosophia merger. Last week opendoor announced that it will go public through a reverse merger with blank-check company Social Capital Hedosophia Holdings Corp. II IPOB in a deal that values Opendoor at $4.8 billion. Shares of Social Capital soared 22.4% in premarket trading. Opendoor expects the reverse merger to provide it with $1 billion in cash proceeds.
Opendoor did not choose to go public through a traditional IPO instead they chose the SPAC route. SPAC’s are also called Blank Check Company. SPAC stands for Special Purpose Acquisition Company. These companies act as shell companies and they don't have any operations. The sole purpose of SPAC’s is to acquire other companies within a time frame and that is normally within 2 years.
Last week Opendoor announced its plan to become a publicly traded company through a merger with social capital hedosophia ticker IPOB. Social Capital Hedosophia Holdings is a partnership between Chamath Palihapitiya, the founder and Managing Partner of Social Capital, and Ian Osborne, co-founder and the current CEO of Hedosophia. Both Chamath and Ian have a great amount of experience in investing in promising startups. Prior to the Opendoor deal Social Capital hedosophia under ticker IPOA completed a successful merger with Virgin galactic.
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Opendoor's business model: 0:20
Funding History: 1:17
Blank Check Company: 1:45
Why SPAC's: 2:45
Merger with Social Capital: 3:40
My Thoughts on Merger: 4:52
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