Since the unprecedented rise of Digital World Acquisition (NASDAQ:DWAC), SPAC stocks are back in favor on Wall Street. Today, one particular blank-check company caught a wave on social media. Social Capital Hedosophia VI (NYSE:IPOF) may finally be on the verge of announcing its merger partner, and retail investors are speculating it could be Discord. IPOF stock has shot up as this rumor has trended.
What’s Happening With IPOF Stock
Social Capital continued its pattern of flatlining all morning but began to spike around noon. Despite some turbulence, it closed up more 4% for the day.
This company was founded by one of the most prominent names in the business. Chamath Palihapitiya was a champion of the early SPAC boom, achieving success with the earlier mergers. His blank-check companies merged with prominent names, including SoFi (NASDAQ:SOFI). Although SOFI has had a difficult week, it’s risen by more than 20% over the past month.
Why It Matters
Rumors first began circulating in September 2021 that the current Social Capital SPAC was planning to merge with Discord. Discord has gained popularity throughout the year, making it a tempting SPAC partner. As InvestorPlace contributor Chris MacDonald reported of the potential deal:
“Indeed, as one of Chamath’s largest SPACs, such a merger partner would make sense. This is a SPAC that requires a large deal. And given Discord’s previous buyout offer of $10 billion from Microsoft (NASDAQ:MSFT), it appears this deal size could be in the wheelhouse for IPOF.”
Twitter traffic regarding the alleged merger remains hot although there has been no statement from anyone involved in either company. As of now, it’s unclear how today’s rumor was launched. What we do know is the time is opportune for a merger announcement.
As InvestorPlace contributor Will Ashworth recently noted, several disruptors within the fintech space are looking to make their public debuts in the near future, which could entice a company like Discord to join the pack and ride the wave higher.
What It Means
This type of rumor is worth paying attention to but not necessarily worth getting excited about. IPOF stock is rising, but unless something happens to lend credibility to the rumor that’s driven it up, it won’t stay in the green. However, if there turns out to be any truth to the rumors, this could be an important buying opportunity.
As is the case with all merger hearsay, all we can do is watch and wait. It wouldn’t be surprising for Chamath Palihapitiya to want in on the current SPAC boom before it’s over. When Discord does go public, everyone should be watching closely. For now, this rumor will have to do.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.