Billionaire says workers won’t lose if corporations left to fail

Billionaire Chamath Palihapitiya

Transcipt of an interview with Chamath Palihapitiya on CNBC on April 9, 2020.

Chamath Palihapitiya is founder and CEO of Social Capital, whose mission is to advance humanity by solving the world’s hardest problems. He is also owner and director of the NBA’s Golden State Warriors and was a member of the senior executive team at Facebook. He was born in Sri Lanka, grew up in Canada and graduated with a degree in electrical engineering from the University of Waterloo.


INTERVIEWER Are you arguing to let airlines fail, for example?



INTERVIEWER How does that make sense?

PALIHAPITIYA Because it sees through the lie that is promoted and spread by Wall Street.

When a company fails it does not fire its employees. It goes through a packaged bankruptcy. Right. What happens is the people who have the pensions inside those companies, the employees of these companies, end up owning more of the companies.

The people who get wiped out are the speculators that own the unsecured tranches of debt, or the folks that own the equity. And, by the way, those are the rules of the game. That’s right. Because these are the people that purport to be the most sophisticated investors in the world. They deserve to get wiped out. But the empoyees don’t get wiped out. The pensions don’t get wiped out.


INTERVIEWER Why does anybody deserve to get wiped out?

PALIHAPITIYA Let’s be clear. Who are we talking about? We are talking about a hedge fund that serves a bunch of billionaires. Who cares? Let ‘em get wiped out. Who cares?!

They don’t get to summer in the Hamptons. Who cares?


INTERVIEWER What about employees who own stock.

PALIHAPITIYA Look, these funds are owned by Blackrock, by these huge amorphous organizations. Big guys who can take a big hit. Ultimately, downstream, a few employees who might own a few shares might lose out—but none of the millons living hand to mouth.


'You have to
wash these people out.'


INTERVIEWER Why does anybody deserve to get wiped out? Wouldn’t that be immoral, in and of itself?

PALIHAPITIYA No, because what is happening right now, is that on mainstreet today people are getting wiped out. And right now rich CEOs are not, boards that had horrible governance are not, hedge funds are not. People are.

Six million people just this week alone, basically saying: “Holy mackerel I don’t know how I am going to make my own expenses for the next few days, weeks, months.”

So, it’s happening today to millions of individual Americans. And, what we’ve done is disproportional to prop up and protect poor performing companies, CEOs and boards. You have to wash these people out.

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