The so-called SPAC king prepares to launch another: ‘The last time wasn’t a success by any means’

Chamath Palihapitiya, the CEO of Social Capital, says he’s getting back in the business of special-purpose acquisition companies. - etienne laurent/Agence France-Presse/Getty Images The so-called SPAC king, who created a dozen special-purpose acquisition companies that ultimately lost investors billions of dollars, says he’s probably getting back in the business.

Chamath Palihapitiya, a venture capitalist and co-host of the popular podcast “All-In,” responded to a social-media poll with more than 50,000 responses whose result overwhelmingly indicated he should not launch another SPAC by saying he’ll ignore that finding.

Most Read from MarketWatch

• Israel-Iran clash delivers a fresh shock to investors. History suggests this is the move to make.
• Why the biggest-ever ‘triple witching’ options expiration could deliver a jolt to Friday’s trading
• ‘I’m at my wit’s end’: My niece paid off her husband’s credit card but fell behind on her taxes. How can I help her?
• Why the stock market will be performing a high-wire act over the summer, according to UBS
• ‘I prepaid our mom’s rent for a year’: My sister is a millionaire and never helps our mother. How do I cut her out of her will?

Saying he received calls from many Wall Street and crypto “titans” indicating that they wanted him to launch a SPAC, he declared on the social-media platform X: “I will probably do it.”

Special-purpose acquisition companies are publicly traded shell companies formed with the purpose of acquiring or merging with a private company to take it public. It’s a way to sidestep the expenses and regulatory work of going public through a traditional initial public offering. They are also called blank-check companies.

Palihapitiya was not deterred, in the slightest, by his previous performance. “Maybe this time it will go better? Who knows. The risks are clear, though. The last time wasn’t a success by any means,” he said.

Data compiled by MarketWatch, using FactSet figures, underscore that. None of his SPACs outperformed the S&P 500 SPX since their first day of trade, and most have struggled or outright failed.

| | | | | --- | --- | --- | | Company | Ticker | Performance since launch | | Virgin Galactic | SPCE | -98.50% | | OpenDoor Technologies | OPEN | -94.60% | | Clover Health | CLOV | -70.90% | | Social Capital Hedosophia IV | IPOD | | | SoFi Technologies | SOFI | +46.6% | | Social Capital Hedosophia VI | IPOF | | | MP Materials | MP | +272.2% | | Desktop Metal | Acquired | -47% | | Metromile | Acquired | -79% | | Proterra | Bankrupt | -100% | | Latch | LTCH | -98.60% | | Sunlight Financial | Bankrupt | -100% | | Data: MarketWatch calculations/FactSet |

Two of his best-performing SPACs were the ones where Palihapitiya could not find a merger partner, so he returned the $10 per share to investors.

Palihapitiya’s renewed interest comes as Goldman Sachs GS, according to Bloomberg, has ended a three-year self-imposed ban on SPAC involvement.

Story Continues### Most Read from MarketWatch

• I’m 75 and have a reverse mortgage. Should I pay it off with my $200K savings — and live off Social Security instead?
• I’m 51, earn $129K and have $165K in my 401(k). Can I afford to retire when my husband, 59, draws Social Security at 62?
• Tech companies lead list of double-digit gains in June for stocks in the S&P 500
• Israel-Iran conflict poses three challenges for stocks that could slam market by up to 20%, warns RBC
• My mother-in-law thought the world’s richest man needed Apple gift cards. How on Earth could she fall for this scam?

View Comments