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Virgin Galactic chairman Chamath Palihapitiya raised 0 million for a new blank-check firm. It is 20% more than it was expected earlier.Virgin Galactic Holdings Inc (NYSE: SPCE) chairman Chamath Palihapitiya, raised 0 million on Tuesday for a new company. He was able to get 20% more than the original target after the coronavirus crisis disrupted the event which was scheduled for March. The IPO was one of a kind, as only two others have happened so far in April according to IPO Boutique. Whereby they were biotechnology firms, a sector that is thriving with the ongoing coronavirus.How Virgin Galactic Chairman Chamath Palihapitiya Managed to Raise 0MThe company that Palihapitiya raised the capital for Social Capital Hedosophia Holdings Corp III IPOC_u.N. It is a special purpose
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Virgin Galactic chairman Chamath Palihapitiya raised $720 million for a new blank-check firm. It is 20% more than it was expected earlier.
Virgin Galactic Holdings Inc (NYSE: SPCE) chairman Chamath Palihapitiya, raised $720 million on Tuesday for a new company. He was able to get 20% more than the original target after the coronavirus crisis disrupted the event which was scheduled for March. The IPO was one of a kind, as only two others have happened so far in April according to IPO Boutique. Whereby they were biotechnology firms, a sector that is thriving with the ongoing coronavirus.
How Virgin Galactic Chairman Chamath Palihapitiya Managed to Raise $720M
The company that Palihapitiya raised the capital for Social Capital Hedosophia Holdings Corp III IPOC_u.N. It is a special purpose acquisition company (SPAC), which will utilize the $720 million for buying a tech company outside the United States.
Initially, Palihapitiya was anticipating to raise around $600 million, however, due to the increased demand from investors, he was compelled to increase and accommodate them.
The whole hype with the company which saw investors flock is because such companies are flexible in their investments. Investors are constantly searching for places to put their money and get hefty returns in these times of coronavirus pandemic.
Special purpose acquisition companies are more resilient to market volatility than most traditional stock markets. Investors only deposit their money while the management team constantly searches for a profitable investment.
Palihapitiya has been involved in similar deals in the past whereby his first SPAC merged with Virgin Galactic in October to allow the company to go public and acquire $2.3 billion. All this was done without the company launching an IPO itself.
On the Flip-side
Virgin Galactic shares are up 45% so far this year, despite the negative impact of the coronavirus pandemic. Since the company relies on people touring the space to make profits, and the social distancing is prevailing in most places, its operations are bound to be hit hard if the virus is not tamed soon.
The fund raised by Palihapitiya showed the extent to which most investors out there are willing to go to make an extra dollar. This is due to the increased job loss and unemployment which is as a result of most businesses counting losses amid the ongoing coronavirus outbreak.
According to Reuter, the IPO was priced at %10 per share, whereby the company sold 72 million shares. The debut price of the shares is the standard rate mostly in special purpose acquisition company listings.
The shares are set to be listed on the New York Stock Exchange under the symbol (IPOC).
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