Sign up for our daily briefing
Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.
Catch up on the day's biggest business stories
Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter
Stay on top of the latest market trends
Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.
Sports news worthy of your time
Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.
Tech news worthy of your time
Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.
Get the inside stories
Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Want a daily digest of the top Denver news?
Get a daily digest of the most important stories affecting your hometown with Axios Denver
Want a daily digest of the top Des Moines news?
Get a daily digest of the most important stories affecting your hometown with Axios Des Moines
Want a daily digest of the top Twin Cities news?
Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities
Want a daily digest of the top Tampa Bay news?
Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay
Want a daily digest of the top Charlotte news?
Get a daily digest of the most important stories affecting your hometown with Axios Charlotte
Want a daily digest of the top Nashville news?
Get a daily digest of the most important stories affecting your hometown with the Axios Nashville newsletter.
Want a daily digest of the top Columbus news?
Get a daily digest of the most important stories affecting your hometown with the Axios Columbus newsletter.
Want a daily digest of the top Dallas news?
Get a daily digest of the most important stories affecting your hometown with the Axios Dallas newsletter.
Sign up for Axios NW Arkansas
Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters
Mark Lennihan / AP
There's a new upcoming IPO on the docket. But in an unusual twist, it's from a pair of venture capital firms—Social Capital and Hedosophia—according to an SEC filing. It plans to trade on the New York Stock Exchange under the symbol "IPOA.U."
What it is: Social Capital Hedosophia Holdings Corp. is essentially a shell company that will go public and raise funds with the goal of acquiring or merging with a private company (which hasn't been selected yet). This transaction will allow the latter to skip over the arduous process of an IPO while also enjoying the benefits of being a publicly traded company. The company will also benefit from the capital injection of merging with this entity. Social Capital declined to comment.
- It's what's known as a "blank check" company, meaning investors are betting on the team without knowing what they intend to buy. It's not super common, but not unheard of. More than a decade ago, three former Apple executives raised a bundle for a blank check company, but investors ended up losing most of their money.
- Notably, the filing points out the growing number of "unicorns"—privates company valued at over $1 billion—relative to public companies of the same size (roughly150 to 200), suggesting the entity is likely to target a unicorn for its acquisition or merger.
- Several venture capitalists have voiced concerns recently about the growing number of unicorns that are choosing to remain private for longer periods of time (which often means less liquidity for these investors than in previous eras).
- We're already beginning to see some companies look into alternative routes, such as Spotify which is rumored to be considering a direct listing instead of an IPO.
Details: Social Capital Hedosophia Holdings Corp. will offer 50,000,000 units (or 57,500,000 units if the underwriters' over-allotment option is exercised in full), at $10 per unit, according to the document, raising between $500,000,000 and $575,000,000. Credit Suisse is the sole book-running manager for the IPO. The story has been updated with additional context and to correct Social Capital's firm name.