What's up guys and welcome back to wall street millennial on this channel, we cover everything related to stocks and investing today we're doing a video about billionaire investor, chamath, paula hapatiya and some recent controversial stock trades, which he made that have cast doubt on his honesty and Integrity chemoth was the og of the spat craze as he organized the virgin galactics back all the way back in 2019. He claims his facts are a way to democratize venture capital, investing by giving individual investors the opportunity to invest in early stage high growth companies. Since then, he has also brought open door, clover, health and sofa public in june of 2021, he registered for four new stacks, which will bring his grand total up to 10 spacks, which collectively have raised far in excess of a billion dollars. The success of his facts have been heavily dependent on individual investors buying into them to support their prices and improve the mergers.

In this respect, he has benefited tremendously from his presence in both the mainstream media and social media, which he has used heavily over the past year to drive interest in his facts. Chamoth has made hundreds of millions, if not billions, of dollars from his specs based on the money he invested, as well as the fees and warrants they collected by sponsoring them. Many of the individual investors who have bought into his fax have not done nearly as well. For example, clover is down more than 20 from the initial stack price after it was revealed that the department of justice was investigating the company over their business practices based on house backs are structured, chemoth can make a killing on the pc collects as a stacked, sponsor.

Even if the company takes public ends up doing poorly, the fees differ from stack to spac, but generally exceed 20 of the invested capital. This problem affects all stack sponsors and can cause a perverse incentive to raise as many specs as possible without really caring about the quality of the companies they take public. Whenever you invest in a spag, you have to have a high degree of confidence that the spac sponsor is competent and honest in the case of chamoth. Some of his recent stock trades cast doubt on his trustworthiness.

Chamoth has been a long time believer in tesla and as early as 2017 has been a major investor in the company in january of 2021, he seemed as bullish as ever on tesla here's a clip from a cnbc interview dated january 7th 2021.. Maybe the the epitome of of all of this is tesla, which is up 700 plus percent over the last year. Um, i think you're, still a shareholder right. Have you sold any shares uh? What do you make of that in and of itself 700 in a year? Elon musk is now the richest person in the world, as of today passes jeff bezos yeah.

It's really. It's really incredible. Actually i mean he's somebody i've known for a really long time. I've looked up to him for a long time and here's what i would say that he built a great car company and somewhere along the way you know about five or six years ago.

What i thought he was building was an energy company and that eventually people would realize that climate change actually mattered, and i'm telling you right now, scott, the big disruption that's coming is to power utilities. There are trillions of dollars of bonds of capex, of value sitting inside the energy generation infrastructure of the world that is going to go upside down, and when that goes, pear-shaped, tesla will double and triple again scott. I don't understand why people are so focused on selling things that work. Let's just you know i'll make up a number.

Let's just say i owned a billion dollars of tesla stock. If i sold it now, i have a billion dollar problem. What do i do with that money? What about if it was 100 million what about if it was just ten thousand ten billion it doesn't matter? What the number is. The point is that when things are working, you're paid to stay with people that know what they're doing - and this is a guy who has consistently been one of the most important entrepreneurs in the world.

And so why bet against him? When the music's on you got ta dance, and so these guys are dancing, they are in rhythm, they're in flow. Let them do their thing, get behind them, don't sell a share, just let them create value. At the beginning of the interview, the anchor specifically asked him have you sold any shares while chamath didn't directly answer the question. He said a few key things that we should take note of.

Firstly, he said that tesla will double or triple again. He then says when things are working you're paid to stay. This seems to mean that he thinks tesla is doing a good job and investors will continue to make money if they hold the stock. He says wide bet against elon musk and, most importantly, he specifically says don't sell a share of tesla based on his statements.

It's pretty clear the message he is trying to convey he's saying that tesla is still a great company and tells the cnbc audience not to sell shares. It doesn't take a genius to read in between the lines and see that he's probably still holding his own position in tesla's talk. You might be surprised to hear that at the same time, he was giving these incredible bullish statements about tesla. He was quietly dumping.

His entire stake in the company - here's another cnbc interview from him on september 29th, 2021. It's in a different company. You still have a sizable stock position in tesla. No, you sold it yeah when uh over the last few years.

We've sort of you know not. Last year's like really in the last year or so particularly you know, the prices allowed me to again surprised to hear you say that after what you just said about the company, well, i i don't have an infinite pool of capital. You know i'm myself, i don't raise funds, i can't go to other people, and so when i have these ideas, the money has to come from some place. The only other solution would be to for me to get totally levered up and i'm just not comfortable with that risk, and so you know i'm a meager guy with meagre beans, yeah right in september of 2021.

He admits that he dumped his entire stake in tesla. Over the past year, there's nothing wrong with taking profits and it's a perfectly reasonable thing to do, given how much tesla stock has increased over the past year. But the problem is that his public statements in january of 2021 completely contradicted what he was actually doing. He said he's been dumping his tesla shares over the past year, which means he probably started around september of 2020..

In january 2021. He was saying that tesla would double or triple again and telling the cnbc audience don't sell a share, but at the same time he was dumping his own shares, while he never technically lied, because he didn't explicitly say that he was selling shares in january. It's pretty clear that his statements were extremely misleading. It would be one thing if his tesla statements were a one-time, honest mistake, but his latest indiscretion is not an isolated incident.

Chamath has a history of making double-faced public statements, of which this tesla incident is just the latest example his highest profile and perhaps most successful spec is virgin. Galactic, which went public in 2019. Chamas said that he was a long-term believer in the company and even became chairman of their board of directors, so it came as a big surprise when he sold 38 of his stake in the company in late 2020. in a youtube podcast.

He said he is still a long-term believer in the company and only sold a small portion of his personal stake to free up money for other investments style to sell some shares of virgin galactic. I saw you tweeted about it and you wanted to be transparent. People asked you for you to address it up front on the show so go ahead. Yeah.

I have a lot of uh projects that i um intend to fund in 2021. I'm probably going to put another. I don't know. I think the forecast was almost two billion dollars to work and uh.

I needed to manage my liquidity um for this year and make sure that you know um. I could continue to make all those investments and fund my uh fund. All of the other things that i need to do and that's why i did it and you're still a significant shareholder. I assume and you believe in the company yeah i mean uh.

I remain completely committed to that business um. You know i i it would have been better if i could have sold something else, but it's not quite possible and when we're entering it, when we, when you leave the tax year, you just have to make these decisions to lock in some gains against other losses And would have loved to have not had to do it, but i needed to manage my liquidity and so i sold you know it's a small portion of what i own, but a few months later, it was revealed that he dumped the entirety of his personal stake. In the company worth 213 million dollars, given the strong following he has among individual investors, jamal's decisions to buy and sell stocks can have a material impact on their share price. For example, after the news of him dumping his virgin state, the stock price fell ten percent.

One of the main reasons individual investors buy into his space is because of his track record as a visionary investor. People want to invest in the same stocks he has invested in for the long term. The problem is, we don't know how long he intends to hold any of his facts, and we only know if he decides to dump his holdings after the fact. Some of chamath's facts will do well and others will do poorly, but the only person who's all but guaranteed to profit from them is chamath himself because he collects so much in fees.

Alright, guys that wraps it up for this video. What do you think about? Chamoth? Do you think he was double faced in his tesla comments? Let us know in the comments section below, if you enjoyed this content, make sure to hit the like button and subscribe. So you don't miss future uploads as always. Thank you so much for watching and we'll see you in the next one wall, street millennial, signing out.