The decision by space exploration company Virgin Galactic to
enter the public markets by means of a merger with a special
acquisition purchase company (SPAC), bypassing a traditional
initial public offering (IPO), demonstrates the continued
evolution of the equities markets.
Virgin Galactic and Social Capital Hedosophia announced
their intention to merge on July 8, effectively creating the
world's first publicly traded commercial human spaceflight
company with an initial value of $1.5 billion.
That such a high profile company has decided to utilise a
SPAC rather than going the traditional IPO route is evidence of
a market in flux. Alongside instruments such as direct listings
(as with Spotify and Slack) or no-vote shares common shares
(Lyft, Pinterest, Snap) the increase in SPACs shows a parallel
shift away from the days of companies simply selling shares to
the public to raise capital.
KEY TAKEAWAYSVirgin Galactic and
Social Capital Hedosophia, a...