Shares of special purpose acquisition company (SPAC) Social Capital Hedosophia Holdings VI (NYSE:IPOF) are once again in the spotlight. Despite no official target announcement, shares of IPOF stock are up 5% this month. On Stocktwits and Twitter (NYSE:TWTR), continued chatter of a potential merger with SpaceX or Starlink are making the rounds. As a result, investors are speculating that Tesla’s (NASDAQ:TSLA) earnings call on April 20 may bring major news.
What Will April 20 Mean For IPOF Stock?
IPOF has until Oct. 14 to bring a company public, so the SPAC still has around six months to finalize a target. A target announcement in April would give IPOF ample time to settle negotiations, file the proper forms to the U.S. Securities and Exchange Commission (SEC) and create marketing materials. However, private companies in the past have gone public via SPAC as quickly as in two months. Therefore, the latest IPOF investors should expect to hear a target announcement is August. IPOF could be in trouble if no announcement is made by then.
Earlier this year, Chamath Palihapitiya, who founded IPOF, announced that he would step down from Virgin Galactic’s (NYSE:SPCE) board. The move caused investors to speculate that he would focus on another space venture instead.
Is a Merger With Starlink or SpaceX Sensible?
So, does a merger with Starlink or SpaceX make sense? First, it should be noted that Starlink is a division of SpaceX that seeks to provide global internet connectivity through a “constellation” of satellites. The company currently has over 2,000 satellites in orbit. Meanwhile, SpaceX has a goal of providing affordable space travel.
Companies normally go public in order to raise capital and provide liquidity to shareholders. According to Crunchbase, 65 investors have provided SpaceX with $7.7 billion in funding. These investors include the United States Space Force and Stack Capital, among others. Based on this, it doesn’t appear as if SpaceX or Starlink have a need for capital.
If SpaceX or Starlink were to go public, the two companies would likely favor an initial public offering (IPO) or direct listing. Until we hear confirmation from any party, the SpaceX/Starlink and IPOF merger rumors are most likely speculation.
On the date of publication, Eddie Pan did not hold (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.