CNBC’s Scott Wapner is adamant, and that makes him good at what he does. The judge, as he is called, is famous for having survived a fight between corporate robbers Carl Icahn and Bill Ackman years ago.[Business Insider] But today the venture capitalist Chamath Palihapitiya is no match
A few weeks ago, Palihapitiya told Wapner on his own show why Wall Street’s big companies, speculators and hedge funds “deserved” to be wiped out during the economic crisis. Wapner tried to play the role of good and apparently defended the actions of the big boys’ leaders who were looking for incentives during the economic collapse. But Palihapitiya didn’t have it then, and neither did it today.
The CNBC moderator He decided to accept more punishment than he had the CEO of Social Capital back on the corporate network this week. Palihapitiya did not disappoint and reiterated his argument as to why companies who have ruthlessly used their money do not make bailouts.
– Ricburton ? @ShellProtocol (@ricburton) April 23, 2020
Apple vs. IBM
The federal government’s bailout of industries such as airlines has questioned the behavior of these companies’ cash management in good times. While companies have asked for trillions of dollars in bailout funds, many have been asked to make billion-dollar share buybacks to support share prices before the outbreak of the crisis. [The Washington Post]
This week, Palihapitiya said how S&P 500 companies have used their profits over the past 11 years to buy back “shares and / or dividends of $ 7 trillion,” he told CNBC. That is the same amount that the government and the Federal Reserve have transferred back to the American company. The problem with Palihapitiya has to do with the fact that these companies are rewarded for their lack of discipline.
According to Palihapitiya, a technology investor, technology isn’t immune either. In the recent battle between the venture capitalist and the CNBC moderator, Palihapitiya stormed IBM, saying:
IBM has spent $ 140 billion on buybacks in the past decade. This is a company with a $ 100 billion market cap. »
He continues to describe how IBM’s revenue has declined for several consecutive quarters, and yet the former CEO made $ 100 million of stock-based payments. [CNBC]
Wapner argued that IBM was a “convenient example” of Palihapitiya, and found that Apple was the biggest offender in buying back shares. But the CEO of Social Capital didn’t, instead he defended Apple CEO Tim Cook for his ability to hold cash.
In addition to Cook, Palihapitiya encouraged Mark Zuckerberg, Warren Buffett and Jeff Bezos to their ability to successfully allocate capital.
“Great CEOs are great capital allocators. When you do things like buybacks and dividends, you’re essentially saying that you raise your hands and tell the world,” I don’t know what to do with that money. “
He suggests that bad allocators should instead direct capital into rewarding activities such as R&D, M&A, and employees.
Palihapitiya has become a hero in cryptocurrency circles, first because he was one of the first investors in Bitcoin (which he bought at $ 80) and now because he went against the grain and called ruthless behavior while defending the little one.
More recently, he has argued that cracks in the traditional financial system will make Bitcoin’s path a lot brighter if the acceptance of the mainstream can take root. He recently presented the case to the Forbes million dollar BTC case and said:
“That is zero or there are millions.”
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