Palihapitiya Invests in Two Deals in One Day During SPAC Boom

Chamath Palihapitiya, founder and chief executive officer of Social Capital LP, speaks during the Bloomberg Business of Equality conference in New York, U.S., on Tuesday, May 8, 2018. The conference brings together business, academic and political leaders as well as nonprofits and activists to discuss the future of equality, how we get there and what is at stake for the economy and society at-large.
Chamath Palihapitiya, founder and chief executive officer of Social Capital LP, speaks during the Bloomberg Business of Equality conference in New York, U.S., on Tuesday, May 8, 2018. The conference brings together business, academic and political leaders as well as nonprofits and activists to discuss the future of equality, how we get there and what is at stake for the economy and society at-large.

(Bloomberg) -- Serial blank-check dealmaker Chamath Palihapitiya has doubled down on SPACs and has now participated in at least half a dozen deals that his own blank-check vehicles aren’t even involved in.

On Monday, Palihapitiya, the former Facebook Inc. executive and venture capitalist, invested in two companies going public via a special purpose acquisition company -- smart lockmaker Latch Inc. and solar lender Sunlight Financial LLC -- through the equity raised to support the deals. That’s on top of top of the six blank-check vehicles he’s helped raised.

Latch and Sunlight were just two of the five companies that announced they were going public via a SPAC on Monday, in deals worth a combined $15.4 billion including debt. The flurry of mergers come after a record year for blank-check companies that shows no sign of stopping with another $15 billion raised in fresh capital already this month.

While the amount Palihapitiya invested in two of the Monday deals couldn’t immediately be learned, he tweeted Jan. 21 that he was leading a public investment in private equity -- or PIPE -- for an undisclosed deal that turned out to be Latch. The SPAC, backed by New York-based real estate firm Tishman Speyer, raised an additional $190 million from investors including Palihapitiya, BlackRock Inc. and D1 Capital Partners.

Sunlight agreed to go public through a merger with a vehicle backed by Apollo Global Management Inc. The SPAC raised $250 million from Palihapitiya, Coatue and BlackRock, among others. SPACs announce PIPE investments when they do a deal to help finance it and support its closing.

Shares in most of the blank-check companies that announced a deal Monday climbed. TS Innovation Acquisitions Corp. jumped as much as 90% after the Latch transaction was revealed, and traded up 43% at 12:17 p.m. in New York. Spartan Acquisition Corp. II, which is merging with Sunlight, jumped as much as 45%, while ION Acquisition Corp. 1 Ltd. climbed 36% on its deal with advertising-tech firm Taboola Inc. Foley Trasimene Acquisition Corp. climbed as much as 13% after announcing a $7.3 billion deal with Alight Solutions.

Landcadia Holdings III Inc., which announced a deal with Hillman Group Inc., slipped slightly in afternoon trading, though it still trades above the $10-per-share price at which SPACs go public. Investors had already had a chance to trade the Hillman and Alight deals after earlier reports on the transactions.

Palihapitiya isn’t the only investor showing up on multiple deals but he is one of the few individuals showing up so often in the public announcements. These transactions often attract big names, usually institutional investors such as BlackRock and Fidelity Management & Research Co. It’s possible other private investors are investing in SPAC mergers without disclosing their involvement.

Palihapitiya is dabbling in many sectors through these investments. Other SPAC deals he’s contributed to in the past few months include 3D printing company Desktop Metal Inc., rare earth company MP Materials Corp., electric bus manufacturer Proterra Inc. and car insurance company Metromile Inc., statements showed.

(Updates with share moves from sixth paragraph.)