Back when the pandemic was firing up, the special purpose acquisition company (SPAC) started up in earnest. And for Chamath Palihapitiya, it was enough of a development to make himself a name. However, this early investor in Virgin Galactic (NYSE:SPCE) and Clover Health Investments (NASDAQ:CLOV) is seeing his fortunes turn around, and his own SPAC nosedive in value.
Palihapitiya made not only a name for himself but also a fortune; he personally put up $750 million to launch his own SPAC, in which he put significant investment in both Virgin Galactic and Clover Health. Yet at least some of that money, based on public filings, was directly borrowed from Credit Suisse, and investors are already getting unsettled, with cries of “pump and dump” emerging. In fact, reports note the average Chamath SPAC is down 77% since Chamath himself tweeted, “trust the process.”
For his part, though, Palihapitiya puts more blame on the culture than any move he’s made. He recently sent out screenshots from a Bloomberg article detailing how Southern states—with their more conservative character and lesser tendency toward “woke” thinking—were contributing more to the United States GDP than the Northeastern DC/New York/Boston corridor for the first time in American history. Nevertheless, how that connects with Palihapitiya’s own investment failings is less than clear.
As for Palihapitiya’s investments, they have not done so well of late, though both are up in today’s trading, slightly. Virgin Galactic and Clover Health stocks are considered Moderate Sells by analyst consensus. However, Virgin Galactic maintains a 25.67% upside potential thanks to its average price target of $3.50 per share. Meanwhile, Clover Health’s average price target of $1.20 gives it 10.11% downside risk.
