By Joshua Franklin
NEW YORK (Reuters) - Virgin Galactic Holdings Inc <SPCE.N> Chairman Chamath Palihapitiya on Tuesday raised $720 million for a new blank-check company, 20% more than its original target, after the coronavirus crisis upended plans last month.
The IPO represents a rare example of a stock market debut braving the volatility fueled by the economic fallout of the pandemic. Only two IPOs have priced so far in April, compared to 14 a year ago, according data provider IPO Boutique. Both were biotechnology firms, a sector with a more specialized investor base.
Palihapitiya's new firm, Social Capital Hedosophia Holdings Corp III <IPOC_u.N>, is a so-called special purpose acquisition company (SPAC) that will use the IPO proceeds to buy a company in the technology sector, primarily outside of the United States.
SPACs are typically more resilient to market jitters, because that they are akin to investors depositing money in an account while their management team searches for an investment.
The IPO priced 72 million shares at $10 each, the standard rate in a SPAC listing, with the stock set to debut on Wednesday on the New York Stock Exchange under the symbol "IPOC," the company said in a statement.
Palihapitiya had originally been looking to raise $600 million in the IPO but increased the deal's size deal following strong demand.
Reuters reported the increased deal size earlier on Tuesday.
Palihapitiya's first SPAC merged with Richard Branson-backed Virgin Galactic in October, allowing the space tourism company to go public with a $2.3 billion market capitalization, without itself launching an IPO. Virgin Galactic's share price is up around 45% in 2020.
In February, Palihapitiya, a former Facebook Inc <FB.O> executive, outlined plans for two new SPACs, Social Capital Hedosophia Holdings Corp II and III, to raise $300 million and $600 million, respectively. The new deals had been set to price their IPOs in March but the market turbulence delayed the plans. The IPO of Social Capital Hedosophia Holdings Corp II is still expected to proceed at a later date, according to a person familiar with the matter.
SPAC IPOs haves not performed well recently. All 13 SPACs that went public this year traded below their IPO price by March 23, according to IPO research firm Renaissance Capital, a sign of investors' eagerness to cash in on liquid assets during the recent sell-off.
Credit Suisse is the sole bookrunner on the Social Capital Hedosophia Holdings Corp III IPO.
(Reporting by Joshua Franklin in New York; Editing by Lisa Shumaker)