Home-selling platform Opendoor closes higher in Nasdaq debut (updated)
21/12/2020 18:04
(Adds closing price)
Dec 21 (Reuters) - Shares of Opendoor Technologies Inc
OPEN.O , a home-selling platform backed by SoftBank Group
9984.T , ended 5.9% higher in their Nasdaq debut on Monday,
following a merger with a blank-check company led by investor
Chamath Palihapitiya.
Opendoor, which earlier this year had agreed to combine with
Palihapitiya's Social Capital Hedosophia II, closed at $31.25,
up from Social Capital's last close on Friday before it began
trading under its new name.
The stock is trading well above the $10 share price at which
Social Capital sold shares in an April initial public offering,
which raised $360 million.
Social Capital is a special purpose acquisition company
(SPAC), which is a shell company that raises money through an
IPO to buy a private company and take it public.
Opendoor said in a filing on Friday it had 544.4 million
outstanding shares after the merger, giving it a market
capitalization of $17 billion at its closing price.
The company, backed by a $400 million investment from
SoftBank, was hit hard by the pandemic this year, and cut 35% of
its workforce in April.
As the home resale business started to recover, Opendoor
looked for capital to fuel expansion and opted to go public by
merging with Social Capital at a $4.8 billion valuation.
The company got about $1 billion cash in the deal, including
$600 million from Palihapitiya and other investors including
BlackRock and Healthcare of Ontario Pension Plan. urn:newsml:reuters.com:*:nL4N2GC3QX
Glenn Solomon, a board member at Opendoor and a managing
partner at GGV Capital, one of Opendoor's early investors, said
the company's goal had always been to go public.
"This is a consumer service and the notoriety of being
public is helpful. This is also a company that relies on
capital, both from its partners and its balance sheet, to
execute on its business plan," Solomon said.
(Reporting by Sohini Podder in Bengaluru and Joshua Franklin in
Miami; Editing by Sriraj Kalluvila and Vinay Dwivedi)
((sohini.podder@thomsonreuters.com;))