Social Capital to Postpone Blank-Check IPOs Amid Rout

(Bloomberg) -- The parent of a blank-check company that helped bring Virgin Galactic Holdings Inc. to public markets last year is postponing a pair of initial public offerings for specialty purpose acquisition vehicles that had aimed at raising a combined $900 million, according to people familiar with the matter.

Social Capital Hedosophia Holdings, a partnership between millionaire venture capitalist Chamath Palihapitiya and longtime investor Ian Osborne, had been seeking to sell 30 million units for one company and 60 million units for another to raise funds to buy targets in the technology sector, according to filings. Both offerings had been due to start trading on Tuesday.

The new timing of the offerings is unclear. The people asked not to be identified because the information wasn’t public.

Few stock listings are moving ahead with global stock values plummeting in the biggest drop since the Black Monday crash in 1987. The S&P 500 Index has lost about 26% in the past three weeks as the threat of Covid-19 has spurred widespread travel and social restrictions to limit the disease’s reach, as well as fiscal stimulus plans aimed at stemming the economic fall out. IPO candidates like Warner Music Group Inc., Zoominfo Technologies Inc. and Cole Haan Inc. are adopting a wait-and-see approach and are unlikely to launch a deal anytime soon, people with knowledge of the matter have said.

The blank-check companies -- which each had a proposed offering price per security of $10 -- had been planning to trade on the New York Stock Exchange under the tickers IPOB and IPOC. A representative for Social Capital Hedosophia declined to comment.

So-called SPACs that listed in the U.S. over the past year have traded up 3.7% on a weighted average basis, compared to a 6.1% decline for regular IPOs during the same period, according to data compiled by Bloomberg.

Before the decision, investors had been buying into Palipaitiya’s track record with Virgin Galactic, and the deal received strong demand ahead of its launch, according to a person with knowledge of the matter, who asked not to be identified discussing private details.

The first Social Capital Hedosophia blank-check company raised $600 million in 2017 and in July agreed to merge with Virgin Galactic. Earlier this year, the stock captivated both long and short investors looking for a way to play the nascent space tourism boom. The market value of the company more than tripled from the start of the year to peak just below $8 billion in February. The stock has lost 68% since then as optimism cooled and as global markets tumbled in the face of the growing risk of the new coronavirus.

To contact the reporters on this story: Gillian Tan in New York at gtan129@bloomberg.net;Crystal Tse in New York at ctse44@bloomberg.net

To contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net, ;Liana Baker at lbaker75@bloomberg.net, Michael Hytha

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