Prolific SPAC investor Chamath Palihapitiya is winding down two of his blank-check firms after failing to find suitable target companies within a deadline as choppy public markets dampen investor sentiment for the once high-flying investment vehicles.
Social Capital Hedosophia Holdings Corp IV and Social Capital Hedosophia Holdings Corp will return the funds raised to shareholders, Palihapitiya said in a blog post on Tuesday.
The two shell companies were shut down after they failed to complete business combinations by Oct. 14, according to regulatory filings.
The firms raised $400 million and $1 billion in initial public offerings in October 2020 and intended to focus on businesses in the technology sector.
“Over the past two years, we evaluated more than 100 targets and while we came close to doing a deal several times, we ultimately walked away each time,” Palihapitiya said.
Palihapitiya has been one of the most prominent faces of SPACs, merging them with a range of companies, from space tourism firm Virgin Galactic Holdings Inc to online lending startup SoFi Technologies Inc and biotech ProKidney Corp.
His move to wind down the two shell companies comes at a time when the frenzy around listings through the SPAC route has slowed after nearly two years of immense popularity.
“Ultimately, to get a deal done would have required us stretching on price or buying an inferior asset – neither were things we felt comfortable doing,” Palihapitiya said.
Billionaire investor William Ackman who raised $4 billion in the biggest-ever SPAC also told investors in July he would be returning the sum after failing to find a suitable target company to take public through a merger.