Social Capital Hedosophia Holdings Corp II - Class A

As you probably know Opendoor is merging with $IPOB to go public. The deal between the two [values Opendoor at 4.8B](https://www.cnbc.com/2020/09/15/palihapitiya-finds-next-10x-idea-with-4point8-billion-spac-deal-for-real-estate-start-up-opendoor.html). $IPOB's market cap is currently 600M. What's the relationship between these two? Will the value of Opendoor always be 8x the market cap of $IPOB in theory? Are not all Opendoor shares converted to $IPOB shares?

What am I missing here?

The way I think about it is that $IPOB's current market cap represents the value of the SPAC's stake in Opendoor.  $IPOB is providing “up to” $414 million in cash as part of the deal that values Opendoor at $4.8bn ($6.2bn equity - $1.5bn cash).  So the market is valuing a ~7% stake in Opendoor at ~$750mm ($IPOB's current market cap, implying that the market thinks Opendoor is worth more than the valuation agreed upon in the deal)...this ownership stake is just a rough estimate--would have to look at the company filings to see exactly how the deal is structured.  And existing OpenDoor shareholders are rolling their equity into the new company.   After the reverse merger, Opendoor and $IPOB will combine into a publicly traded operating company, and the market cap will simply equal Opendoor's market cap once existing Opendoor shares are included in the shares outstanding number (market cap = shares outstanding x market price)--right now, only the SPAC's shares are included in the market cap calculation.

Michael McGuiness

"These guys are my next 10x" idea," Chamath Palihapitiya told CNBC. 

https://www.cnbc.com/2020/09/15/palihapitiya-finds-next-10x-idea-with-4point8-billion-spac-deal-for-real-estate-start-up-opendoor.html