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A week ago, Chamath Palihapitiya, CEO of Social Capital, said zombie companies should fail, I.e. the airlines, who spent 96% of free cash flow over the last decade into buybacks. It was a sight to see. You can see it embedded in my post here. This week, Chamath returned to CNBC, and again put the network, cheap money, poor corporate governance on blast. I love this guy.
One of the best parts of the interview in my opinion is when he breaks down the responsibility of a CEO: the person who can best manage corporate capital, whether that be human or financial. When corporations funnel profits into stock buybacks, the message is – we have no idea what to do with this money to grow our business so we’re going to pour profits into share buybacks which asymmetrically rewards those at the top of the firm.
Anyways…if you’d like the opinion of a self made billionaire who advocates for free market capitalism – check him out.
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