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Social Capital’s Chamath Palihapitiya Turns To Twitter To Source Next Big Deal

December 4, 2020
Tyler Durden

Social Capital’s Chamath Palihapitiya Turns To Twitter To Source Next Big Deal

Tyler Durden

Fri, 12/04/2020 – 06:32

When history looks back on the 2020 SPAC deal frenzy, Chamath Palihapitiya will likely be remembered as one of the most prominent evangelists of the ‘reverse IPO’ – for better, or worse.

Credit where credit is due, some of Palihapitiya’s deals appear to have worked out, and his investment firm, Social Capital, has seen the various publicly-traded deals it has sponsored – which debuted at the low, low price of just $10 a share – generate solid returns, with his acquisition of OpenDoor – an iBuyer/home-flipping company.

But his success opened the floodgates during a year where, thanks to unprecedented intervention by the Fed, cash is still cheap and – as Andrew Ross Sorkin pointed out a couple of months ago – some investors can simply go for the quick ‘arb’.

Palihapitiya disputed this, arguing that in every deal he controls, he decides the allocations, and anybody in it for a quick buck simply doesn’t a piece.

That exchange took place back in September. But in recent weeks, as the financial press has been cranking out speculation about where the SPAC trend will go next – the census seems to be either Europe, or the grave (Forbes did a whole investigation on it)  – and with Wall Street deal flow showing no signs of slowing down, Palihapitiya took to Twitter Thursday afternoon to solicit his next big target from the crowd.

To be sure, Palihapitiya frequently solicits ideas from his followers, or asks them to weigh in on. But his tweet elicited a flood of replies from FinTwit, as some seized the opportunity to joke about the implications of sourcing deals on twitter, while others got straight to the pitch.

When history looks back on the 2020 SPAC deal frenzy, Chamath Palihapitiya will likely be remembered as one of the most prominent evangelists of the ‘reverse IPO’ – for better, or worse.

Credit where credit is due, some of Palihapitiya’s deals appear to have worked out, and his investment firm, Social Capital, has seen the various publicly-traded deals it has sponsored – which debuted at the low, low price of just $10 a share – generate solid returns, with his acquisition of OpenDoor – an iBuyer/home-flipping company.

But his success opened the floodgates during a year where, thanks to unprecedented intervention by the Fed, cash is still cheap and – as Andrew Ross Sorkin pointed out a couple of months ago – some investors can simply go for the quick ‘arb’.

Palihapitiya disputed this, arguing that in every deal he controls, he decides the allocations, and anybody in it for a quick buck simply doesn’t a piece.

That exchange took place back in September. But in recent weeks, as the financial press has been cranking out speculation about where the SPAC trend will go next – the census seems to be either Europe, or the grave (Forbes did a whole investigation on it)  – and with Wall Street deal flow showing no signs of slowing down, Palihapitiya took to Twitter Thursday afternoon to solicit his next big target from the crowd.

To be sure, Palihapitiya frequently solicits ideas from his followers, or asks them to weigh in on. But his tweet elicited a flood of replies from FinTwit, as some seized the opportunity to joke about the implications of sourcing deals on twitter, while others got straight to the pitch.

The pitching frenzy went on all night, with Chamath’s initial tweets racking up more than 1,000 replies combined.

Readers can find all the replies here.