Chamath Palihapitiya Asks If He Should Launch Another SPAC—70% Say No, Users Warn of Past Failures: 'No Crying In The Casino!'

Venture capitalist Chamath Palihapitiya sparked debate on social media by polling followers about launching another Special Purpose Acquisition Company (SPAC), with 70.7% of 55,458 respondents voting “no” amid warnings about his troubled SPAC track record.

What Happened: The former Facebook executive’s X poll, posted Tuesday, drew immediate scrutiny through the platform’s Community Notes feature. Users added context highlighting that his COVID-era SPACs have delivered “horrible returns, often more than -70% since their peak,” according to community-contributed information.

Palihapitiya, dubbed the “SPAC King” during the 2020-2021 market boom, acknowledged the community feedback with characteristic bravado, posting: “This is trending in the right direction! And someone helped with disclosure! No crying in the casino!!”

However, Palihapitiya’s SPAC empire has left investors with massive losses. According to Sigma reporting, investors who put $100 into each of his SPACs at their December 2021 peak would face a 73% loss.

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Why It Matters: Two of Palihapitiya’s most prominent SPACs, Clover and Akili Inc., now have enterprise values near zero, while Virgin Galactic stands at just $100 million, according to Sigma.

His portfolio includes Virgin Galactic Holdings Inc. SPCE, SoFi Technologies Inc. SOFI, Opendoor Technologies Inc. OPEN, and Clover Health Investments Corp. CLOV.

In September 2022, Palihapitiya closed two SPACs worth $1.6 billion after failing to find suitable acquisition targets among more than 100 companies evaluated. The closures came as rising interest rates and inflation decimated the SPAC market, forcing other notable sponsors like Bill Ackman to wind down their blank-check companies, according to The Wall Street Journal.

Despite the losses, Social Capital Holdings Inc. generated approximately $750 million in profits from SPAC transactions, according to the WSJ report.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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