The Street is buzzing with speculation over what company may be the target for Social Capital Hedosophia, which raised $600 million in an IPO today at the NYSE.
Social Capital is a special purpose acquisition company (SPAC), set up to invest in technology companies that are not yet public. SPACs are based on a simple premise: investors are initially going in with a seasoned manager in an investment space (energy, tech, etc.) who will then have up to two years to buy one or more assets. The investors have the option of remaining in the investment or getting out and receiving their money back.
In this case the management team is led by Chamath Palihapitiya, one of the original members of Facebook's management team.
The issue now: what will he buy?
Palihapitiya, in an interview earlier on CNBC, said he was looking for only one company to buy, so there is considerable speculation on what might be in his crosshairs.
He gave us a clue by identifying the rough size of a target: "[T]hink about this as a merger of an entity that should be valued anywhere between $3 and call it $20 billion where that management stays in control..."
That is a wide range, but there are several tech "unicorns" that fall in the $3 billion to $20 billion range. Just in the $10 billion and below range there are several well-known names: