Why Chamath Palihapitiya is welcoming the SPAC market correction

 Why Chamath Palihapitiya is welcoming the SPAC market correction

Chamath Palihapitiya, Social Capital Founder and CEO

CNBC

Social Capital founder and CEO Chamath Palihapitiya became synonymous with SPACs amid the swath of blank-check deals on Wall Street over the last few years.

In 2020 alone, SPACs, or special purpose acquisition companies, raised more than $83 billion, up from $13 billion in 2019. Through July, there had been $125.7 billion raised by SPACs through 435 deals in 2021.

The venture investor has raised billions of dollars in the stock market for SPACs across a wide range of industries from space tourism with Virgin Galactic Holdings to residential real estate with Opendoor to online personal finance with SoFi.

But as SPAC deals, which raise capital in an IPO and then use that cash to merge with a private company and take it public, have cooled amid scrutiny from lawmakers and meager investor returns, Palihapitiya says the market correction is welcome.

“In the beginning of every market you…

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