Meet the new Warren Buffet!
Sri Lankan-born billionaire Chamath Palihapitiya is aiming to become the new Warren Buffett of tech investing, an area where the legendary US investor avoided. This business sector contains companies revolving around the manufacturing of electronics, software, computers or products and services relating to information technology.
Every major television channel and mainstream media in the world are buzzing with the news of the innovative investing approach of this 41-year-old founder of VC firm Social Capital,
His Social Capital Hedosophia Holdings, which started trading on the New York Stock Exchange on Thursday, is a special purpose acquisition company (SPAC), a firm that is being set up to invest in technology companies that are not yet public without the traditional initial public offering (IPO). Social Capital has raised $600 million for blank-check Hedosophia, which will be used to buy stakes in yet-to-be-decided-on startups.
SPACs are based on a simple premise: a seasoned manager in an investment space (energy, tech, etc.) buys assets and assembles them in a portfolio for investors. They are sometimes referred to as “blank check” companies. Palihapitiya’s view is that there are lots of promising tech companies worth a billion dollars or more—so-called ‘unicorns’ that could go public but won’t, mostly because they find it a hassle to be publicly listed. Being public brings managements many distractions.
Palihapitiya became the youngest VP in AOL’s history at the age of 26, and he spent four years as an executive at Facebook during a huge growth period for the social network. His net worth was rumoured to be close to $1 billion in 2015
He adds that most Wall Street companies don’t know how to look at tech companies. He draws attention to his former company Facebook. After it went public there were misgivings about its prospects but what doubters ‘failed to see was the company’s pivot to mobile internet advertising’. That pivot helped boost Facebook stock from about $19 at the end of 2012, shortly after the IPO, to a recent $171.64.
He says Amazon is a microscopic portion of global consumption, ‘so ultimately I think it has more room to grow before it invites regulatory overview’. “On the other hand, Facebook and Google effectively are surveillance states. And they have so much personal, private information about so many citizens of so many countries.”
Owing to this fact, the two internet giants have already had a tussle with regulators in Europe. The European Union has handed Google a record-breaking €2.42 billion fine for abusing its dominance of the search engine market in building its online shopping service.
Palihapitiya who is a Sinhalese was born in Sri Lanka. He came to Canada at the age of six and studied at the University of Waterloo. He has held executive roles at AOL, Facebook, Integrated Plasmonics Corp. and Athos, as well as board director posts at Playdom, Lemon, Agnitus, Syapse Inc. and remind101.
He became the youngest VP in AOL’s history at the age of 26, and he spent four years as an executive at Facebook during a huge growth period for the social network. His net worth was rumoured to be close to $1 billion in 2015.
He serves as an owner/board member of the NBA’s Golden State Warriors which became champions five times. Palihapitiya is also a philanthropist. (Youtube/Media Reports)
