Chamath Palihapitiya

Cameron Costa | CNBC

(This story is for CNBC Pro subscribers only.)

Chamath Palihapitiya just unveiled his next “10x idea” with his latest SPAC deal to take health care insurance startup Clover Health public.

Clover will go public via a merger with Social Capital Hedosophia Holdings Corp. III, a special purpose acquisition company. The deal values Clover at $3.7 billion and includes up to $1.2 billion in cash proceeds. The billionaire investor believes the company has the potential to generating returns worth 10 times the original investment. 

“What we have is a business that’s actually delivering the promise of technology-improving, better outcomes and lower cost health care,” Palihapitiya said on CNBC’s “Squawk Box” on Tuesday. It’s “a market that I think is huge and growing quickly” and a business “that is consistently taking share year over year over year.”

“This is one of the most straightforward investments I’ve ever made,” Palihapitiya said. He added by 2023 the company will have overall profitability. 

In a CNBC interview on Tuesday, Palihapitiya broke down his investment thesis in Clover, a seven-year-old company that sells Medicare Advantage in the U.S.

Here’s how the Social Capital CEO made the case and the slides he used to make it.

Source Article

Chamath Palihapitiya

Olivia Michael | CNBC

If the government approves further stimulus funds, they should go to individual consumers and small businesses, venture capitalist Chamath Palihapitiya said Wednesday.

In a searing diatribe against the troubled sector, the CEO of Social Capital expanded on comments he made earlier in the year to CNBC in which he said airlines should not be bailed out because they are so poorly managed.

Palihapitiya said that before the coronavirus pandemic, the companies already were doing “the most absolutely horrid and idiotic form of capital allocation you could imagine.”

“Not a single extra dollar should go to these companies,” he added.

Among the poor decisions he cited were not investing in research and development, saving or putting more resources into their workforces. Instead, they focused cash on share repurchases and inflating stock prices.

“This has been happening for the last 15 or 20 years,” Palihapitiya said in remarks at the Delivering Alpha conference, presented by CNBC and Institutional Investor. “If you were going to give these folks money, you should have created some much tighter guardrails for what you were going to do in the future.”

Rather than direct rescue funding to large companies, as was done under pandemic-related programs approved by Congress and the Federal Reserve, future resources should go to small business owners and individuals, he added.

“If you really believe in trickle-down economics, then let’s actually see how trickle-down economics would work. Give money into the hands of ordinary Americans,” Palihapitiya said in remarks similar to those he had made before opposing bailouts for hedge funds and poorly run companies. “What I guarantee you they will do is they will spend.”

He spoke amid a tense atmosphere in Washington as Treasury Secretary Stephen Mnuchin and House Speaker Nancy Pelosi, D-Calif., continue to try