Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

SPAC Wipeout Is Punishing Followers of Chamath Palihapitiya

bloomberg.com

Post reply on HN
Print view View original

21–30 of 63 posts

Re: SPAC Wipeout Is Punishing Followers of Chamath Palihapitiya

#21

Post by tracer4201 »

aparsons wrote: post #4

Chamath is one of the most self-serving-pretending-to-be-altruistic salesmen to ever set foot in SV. If you were still a “follower” after doing even the slightest bit of due diligence into the man, you deserve to lose money.

I’m curious why you believe he’s a self serving salesman. I’ve seen a few of his interviews on YouTube and particularly some of his CNBC interviews. I can’t recall him trying to give me specific investing advice, but his analysis on a lot of recent events has made sense. And a lot of his general life advice is great.

I’m a follower of Chamath, but that doesn’t mean I believe he can predict the stock market any better than I can.

What are his self serving/pretending behaviors? Who has he conned, and how?

Edit: I’m genuinely curious and asking to get better informed. Why the downvotes?

Re: SPAC Wipeout Is Punishing Followers of Chamath Palihapitiya

#23

Post by briefcomment »

dralley wrote: post #20
aparsons wrote: post #4

Chamath is one of the most self-serving-pretending-to-be-altruistic salesmen to ever set foot in SV. If you were still a “follower” after doing even the slightest bit of due diligence into the man, you deserve to lose money.

Strongly agree. I listened to Chamath's talks for a couple hours. The impression one gets is a smart, charismatic and driven guy... Who uses every dishonest fake-populist rhetorical trick in the book. I still think he's an interesting listen, but you've got to be thoughtful about it. Slippery dude.

It usually sounds like he believes what he's saying himself, instead of being consciously deceptive.

Re: SPAC Wipeout Is Punishing Followers of Chamath Palihapitiya

#24

Post by [deleted] »

ethanolburner wrote: post #8
adamcstephens wrote: post #2

SPACs should be banned. They’re a vehicle for perpetuation of the market as a gambling platform, while undermining the transparency requirements of the market.

"while undermining the transparency requirements of the market" Then why don't you propose to just ban forward-looking projections and including more transparency? SPACs have their distinct use cases and have unique advantages and disadvantages compared with IPOs & DPOs. A blanket-ban on these vehicles is, in my opinion, limiting optionality, which wouldn't be a problem if the IPO & DPO processes were perfect, howeve…

[deleted]

Re: SPAC Wipeout Is Punishing Followers of Chamath Palihapitiya

#25

Post by jariel »

aparsons wrote: post #4

Chamath is one of the most self-serving-pretending-to-be-altruistic salesmen to ever set foot in SV. If you were still a “follower” after doing even the slightest bit of due diligence into the man, you deserve to lose money.

I'm really hoping for the Kumail Nanjiani spin-off of Pied Piper where he plays Chamath.

The new era of RobinHood traders has brought an incredible degree of financial populism, youtube is crowded with people giving their opnion.

Some of it is really great, often more insightful and detailed than what a lot of banks dare publish - but a lot of it is rubbish.

Re: SPAC Wipeout Is Punishing Followers of Chamath Palihapitiya

#26

Post by ethanolburner »

jb775 wrote: post #14
brandnewlow wrote: post #6

“To be fair, all of his SPACS are up since IPO”

That isn't a realistic representation. SPACs usually start at $10 when formed, then shoot up at least 4x on announcements and hype, the early investors (i.e. people like Chamath) cash out at the peak, then the stock price tanks to $15. Technically the stock is "up" from the original listing price, but it's really just a big scam.

You grossly misunderstand SPACs if you think they shoot up at least 4x on announcement & hype.

This is a very rare phenomenon, and even with the most prominent SPAC sponsor (Chamath), of his current 4 SPAC deals that are post-DA, only 1 has exemplified what you characterize (Virgin Galactic's $55 ATH). The others have never broke $40 or above. This includes every SPAC he has been in the PIPE (5) with exception of 1 (NYSE: MP) which has broke $40.

Therefore, of the 9 post-DA SPACs that have had some form of association with the one of the most popular SPAC sponsors (Chamath), only 2 exemplify what you describe.

However, I do agree with the general premise of your comment. SPACs without founder and PIPE lockups are most likely destined to perform poor in the long term.

Is this a big scam? Considering the fact that most of the 130~ SPACs that have a DA do not fit into your characterization (most do not shoot up even 2x after LOI/DA announcement & hype, most sponsors have not cashed out - whether that be peak or not, most do not trade at $15 but rather way closer to NAV), I would be inclined to say they are not scams in that regard. I would say they are unfair rather than scams (most SPACs have a high % of founder shares, no lockup etc).

Re: SPAC Wipeout Is Punishing Followers of Chamath Palihapitiya

#27

Post by enraged_camel »

dehrmann wrote: post #10
adamcstephens wrote: post #2

SPACs should be banned. They’re a vehicle for perpetuation of the market as a gambling platform, while undermining the transparency requirements of the market.

I don't think they should be banned , but I seriously don't understand how someone could invest in one. You don't know what it's going to acquire, so it's a bet that the leadership finds a good company at a good price that you'd be interested in owning. SPACs have nothing else going for them. That said, it sounds a lot like VCs who invest in the founder, not the company.

SPACs have a price floor of $10 pre-merger. This is the NAV — Net Asset Value.

This doesn't necessarily mean SPACs cannot go below $10 before a merger. It just means that you as a shareholder have the ability to ask for your money back at $10/share regardless of the stock's current price.

Surely you can see why this can make SPACs an attractive place to "park" one's money. The potential upside is pretty large, whereas risks are relatively low as long as you don't continue holding post-merger (where the price can indeed go down to $0 and you are no longer protected by the NAV floor).

Re: SPAC Wipeout Is Punishing Followers of Chamath Palihapitiya

#28

Post by gamblor956 »

aparsons wrote: post #4

Chamath is one of the most self-serving-pretending-to-be-altruistic salesmen to ever set foot in SV. If you were still a “follower” after doing even the slightest bit of due diligence into the man, you deserve to lose money.

For an example, he claims he was "early on Amazon"...in 2014, or nearly 20 years after the IPO, and Tesla...in 2015 (IPO'd in 2010), and Bitcoin...in 2012 (or more than 2 years after the infamous pizza purchase that drew the first wave of media attention).

His primary skill appears to be promoting himself as a first mover when he's always a johnny-come-lately.

And on the particular topic of the article: Bloomberg notes that "His three open SPACs are all in the bottom 20th percentile for returns since the market top" compared to other SPACs, and over the course of the past 2 months alone, have all lost at least 20% of their value.

Re: SPAC Wipeout Is Punishing Followers of Chamath Palihapitiya

#29

Post by FooBarBizBazz »

dralley wrote: post #20
aparsons wrote: post #4

Chamath is one of the most self-serving-pretending-to-be-altruistic salesmen to ever set foot in SV. If you were still a “follower” after doing even the slightest bit of due diligence into the man, you deserve to lose money.

Strongly agree. I listened to Chamath's talks for a couple hours. The impression one gets is a smart, charismatic and driven guy... Who uses every dishonest fake-populist rhetorical trick in the book. I still think he's an interesting listen, but you've got to be thoughtful about it. Slippery dude.

I was put off by the way he attacked Vlad Tenev.

Tenev became a scapegoat for the GME fiasco, and, as the facts came out, it seemed he really didn't deserve to. I get that Tenev's "we don't have liquidity problems" answer was a little disingenuous, but it also wasn't totally wrong if you include a bunch of fine print, and I get how it was necessary. In the end, it turned out that the whole T+2 system was stupid, and leaked through the abstractions built on top. He didn't have enough capital to handle a crazy outlier, and he went back to get more money for next time. What else was the guy supposed to do?

So attacking Vlad for "ethics" was low. Remember that, before Robinhood, we all paid a bunch of trading fees. The dude has done some good. Chamath just piled on to an easy target. I don't like people who cast stones so they can look good.

I don't know why I'm here doing Robinhood's PR for them. I guess Chamath's grandstanding just left a really bad taste.

Post reply on HN