Skip to main content
No. of Recommendations: 2
I am not sure the exact terms of the deal with regards to shares you will receive, but shareholders of IPOC will become shareholders of Opendoor when the acquisition closes in April, 2021. There will likely be a fee charged by your brokerage for the action. Given that the market price of IPOC has largely risen to the premium offered for Opendoor, there is probably not going to be much action between now and when the deal closes. So if you are not going to want to become a shareholder of Opendoor, there is little value to be realized in the interim. But if you want to be a shareholder of Opendoor from day one, then you'll want to hold onto your position.

The purpose of a SPAC is to invest in the promise that something good will come. You buy shares of the placeholder company with the understanding and expectation that the SPAC is going to buy something really cool and worth your long term investment dollars. When and what, you won't know until they make the announcement. The company being acquired will become a public company because the SPAC acquiring them is a public company. The SPAC will then adopt the name of the new company and change its ticker symbol. This allows the company being acquired to skip the costs and process of going public by itself. Shareholders of the SPAC need only enjoy the ride.

Here's a clip from Motley Fool Live explaining more about SPACs:

https://www.fool.com/amp/investing/2020/11/12/what-is-a-spac...

Fuskie
Who notes the risk is that until a SPAC announces an acquisition, it really has no growth drivers, and once that acquisition has been announced, shareholders have to decide whether the wait was worth it and you have high enough conviction in the target as a long term (3-5 years or longer) investment to hand onto your shares or to sell and start over somewhere else...

-----
Premium Home Fool: Ask me a Foolish Question, I'll give you a Foolish Response!
Ticker Guide: The Walt Disney Company (DIS), Intuit (INTU), Live Nation (LYV), CME Group (CME), MongoDB (MDB), Trip Advisor (TRIP), Vivendi SA (VIVHY), Mimecast (MIME), Hain Celestial (HAIN), Royce Micro Capital Trust (RMT)
Disclaimer: This post is non-professional and should not be construed as direct, individual or accurate advice
Disassociation: The views and statements of this post are Fuskie's and are not intended to represent those of The Motley Fool or any other sane body
Disclosure: May own shares of some, many or all of the companies mentioned in this post (tinyurl.com/FuskieDisclosure)
Fool Code of Conduct: https://www.fool.com/legal/the-motley-fools-rules.aspx#Condu...
Invitation: You are invited to interactively watch Motley Fool Live online television: https://livechat.fool.com
Call to Action: If you like this or any other post, Rec it. Better yet, reply to it. Even better, start your own thread. This is YOUR TMF Community!
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.