Among the gilded denizens of Silicon Valley, it’s known as the “Who cares? rant.”
It began when Chamath Palihapitiya argued, in a CNBC interview on April 9, that “zombie companies” like airlines did not deserve a bailout from the U.S. government, despite a global pandemic that had shut down business — and travel — the world over.
Then he took aim squarely at the men (and they are almost entirely men) running the hedge funds he blames for the corporate world’s inability to weather a crisis in the first place.
“The people that get wiped out are the speculators that own the unsecured tranches of debt or the folks that own the equity,” he stressed, unmuted insistence rising in his voice. “And by the way, those are the rules of the game. That’s right. Because these are the people who purport to be the most sophisticated investors in the world. They deserve to get wiped out.”
Palihapitiya continued. “Who are we talking about? We’re talking about a hedge fund that serves a bunch of billionaire family offices. Who cares? Let them get wiped out. Who cares?” And then, with a practiced insouciance: “They don’t get to summer in the Hamptons? Who cares?”
By the time of the interview, of course, hedge fund managers had already fled Manhattan for the Hamptons. It was also when tens of millions of Americans had signed up for unemployment and the coronavirus pandemic was at its peak in New York City, where hundreds of citizens — most of them working-class people of color — were dying in hospitals every day.
“On Main Street today, people are getting wiped out,” an utterly calm Palihapitiya reminded CNBC’s well-heeled viewers. “Hedge funds are not.”
He offers a sly grin when reminded of the interview — which CNBC estimates has been viewed more than 10 million times — during the first of two Zoom conversations with Institutional Investor in May. However, Palihapitiya’s not having any of that rant business. “Rants, rants. I prefer to call them thoughtful commentary,” he says.
“I just continue to want to say the things that are on my mind,” he explains, his large brown eyes leaning forward into the computer from a spacious sunroom in his Palo Alto home, the light illuminating the oversize houseplants and cream-colored easy chairs behind him. “I don’t think these things are controversial. These are the things that I believe. And I think what happens is that people are a little shocked by the radical candor in public because they’re not used to it.”
These “people” should start getting used to it, for Palihapitiya, it is clear, is not taking on just hedge funds. Whether it’s value-investing “morons,” the Silicon Valley venture capitalist elite, or university endowments, to name a few of his targets, Palihapitiya — himself a billionaire — is doing one thing that many of similar means find abhorrent:
Turning on his own.
Click here for the rest of my profile: https://www.institutionalinvestor.com/article/b1lw211ts92n62/The-Unusual-Ambitions-of-Chamath-Palihapitiya