On Tuesday, venture capitalist and All-In podcast host Chamath Palihapitiya took Wall Street by surprise. His new SPAC, called “American Exceptionalism,” raised $345 million to target deals in energy, AI, crypto/DeFi, and defense.
Image Credits:David Paul Morris/Bloomberg via Getty Images
But here’s the twist: Chamath warns retail investors to avoid his new SPAC. Despite the hype, he’s urging everyday traders not to jump in. Only a tiny fraction — just over 1% — is available to the public, while nearly 99% is already locked up by large institutions.
Why Chamath Is Telling Retail Investors To Stay Away
It’s unusual to see a high-profile founder launch a new stock and then warn against buying it. Chamath openly posted on X that SPACs are not well-suited for retail traders.
He explained that these vehicles are designed for institutional investors who can handle volatility, diversify across portfolios, and provide long-term support. For most retail investors, he suggests the risks far outweigh the rewards.
A Rare “Buyer Beware” Warning
In a follow-up post, Chamath doubled down, saying:
“We designed it this way, almost entirely institutionally backed, because, as I have learned, these vehicles are not ideal for most retail investors.”
He even issued a buyer-beware warning for fans of his All-In podcast who might want to invest anyway. His message was clear: review the disclosures carefully, know the risks, and make an informed decision before buying.
What This Means For Retail Investors
The fact that Chamath warns retail investors to avoid his new SPAC is a striking moment. Usually, SPAC founders lean heavily into hype to attract attention. Instead, Chamath seems determined to distance small traders from what could be a volatile investment.
For retail investors who often follow big personalities into risky trades, this advice may be worth heeding. With SPACs already facing criticism for underperformance, Chamath’s caution could serve as a reality check.
Post a Comment