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SoftBank-backed home-selling platform Opendoor is going public through a merger with a blank-check company led by venture investor Chamath Palihapitiya in a deal that will value the combined entity at $4.8 billion, the companies said on Tuesday.
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Opendoor buys properties from sellers and makes repairs, at a service charge, and then lists them for sale. As part of the deal with Social Capital Hedosophia Holdings Corp II, Opendoor will get $1 billion cash, including $600 million from investors such as BlackRock and Healthcare of Ontario Pension Plan and Palihapitiya.
Social Capital shares jumped 21% in pre-market trade.
|IPOB||SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. II||15.47||+2.46||+18.88%|
A blank-check company, also known as a special purpose acquisition company (SPAC), uses capital raised through an initial public offering to buy a private company, usually within two years. The deal then takes the private company public.
Once confined to the backwaters of capital markers, SPACs emerged this year as a major driver of IPOs, led in part recently by deals for space tourism company Virgin Galactic Holdings Inc and fantasy sports and gambling company DraftKings Inc.