27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Thanks to the surge in the number of SPACs and the media coverage of them, Chamath Palihapitiya has become a familiar name among traders. Now, he's asking people what more he can offer them for investment choices.
What Happened: Palihapitiya took to Twitter to ask his 730,000 followers if they would like new investment offerings featuring access to all of his investments.
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Palihapitiya’s tweet offered four options in the poll titled “What do you want.” The options were
- "SocialCapital ETF"
- "SC HoldCo (à la $BRK)"
- "SC Venture Syndicate"
- "Nothing- f*** off..."
The Social Capital ETF was the overwhelming favorite, getting 47.2% of the vote from over 76,000 people who took part in the poll.
SC HoldCo, which would operate similar to Berkshire Hathaway Inc (NYSE: BRK-A) (NYSE: BRK-B) and likely trade as a stock, came in second with 13.4%. Palihapitiya has been compared to this generation's Warren Buffett.
What’s Next: Palihapitiya has hinted at offering an ETF before, and the poll results could get the legendary investor closer to making this a reality given the interest.
His Social Capital Hedosophia was founded as a concept called “IPO 2.0” to provide an alternative path to traditional IPOs for innovative tech companies to go public. Palihapitiya aims to bring SPACs public with symbols running all the way from IPOA to IPOZ.
“My ambition is to be our generation’s Berkshire Hathaway. It’ll be Berkshire, a holding company that, instead of holding Gillette and Coca-Cola and McDonald’s, will hold technology businesses,” Palihapitiya told Fortune last year.
Palihapitiya invests $100 million of his own personal money in the deals he does to show “skin in the game.”
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With Palihapitiya’s SPACs trading at premiums prior to announced deals, a holding company or ETF offering access to all the SPACs could see strong interest.
Related Link: 5 Things You Might Not Know About Chamath Palihapitiya
Potential Holdings: A Social Capital holding company or Chamath ETF would include SPACs from Social Capital Hedosophia and also companies Palihapitiya has backed as a member of the PIPE.
Social Capital has launched six SPACs, with three of them completing deals, one pending and two without targets.
Virgin Galactic Holdings (NYSE:SPCE), Opendoor Technologies (NASDAQ:OPEN) and Clover Health Investments (NASDAQ:CLOV) all completed SPAC mergers.
Social Capital Hedosophia Holdings Corp V (NYSE:IPOE) is taking SoFi public. Social Capital Hedosophia Holdings Corp IV (NYSE:IPOD) and Social Capital Hedosophai Holdings Corp VI (NYSE:IPOF) are both searching for targets.
SPACs that Palihapitiya has been involved in as a member of a PIPE include MP Materials (NYSE:MP), Desktop Metal (NYSE:DM), Insu Acquisition Cop II (NASDAQ:INAQ) and ArcLight Clean Transition Corp (NASDAQ:ACTC), which recently announced a merger with Proterra.
An investment offering a basket of stocks and SPACs could also include companies Palihapitiya is a fan of, which include Amazon.com,Inc (NASDAQ:AMZN), Slack Technologies Inc (NYSE:WORK) and Tesla Inc (NASDAQ:TSLA).
Disclosure: Author is long shares IPOD, SPCE.
Photo credit: Cmichel67 via Wikimedia
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.