On Tuesday, a new SPAC by VC and All-in Podcast Host Chamath Palihapitiya became a public company. It was named under the high name “American Excienalism”, set $ 345 million with a mission to obtain one or more newly established companies in the fields of energy, AI, Crypto/Defi or Defense, then convert these companies into public entities.
But Palihapitiya wants retail investors to know: advises you strongly not To buy the stock, although it has kept a tiny fraction-more than 1%-to negotiate in public markets for retailers, while 98.7% have already been sold in manual, large institutions.
“I want to mitigate the participation of retail investors with my SPACs”, he posted In x and later posted Again, “We designed it in this way, almost entirely institutionally supported, because, as I have learned, these vehicles are not ideal for most retail investors.
It is not typical for someone to start an ipo and then tell people not to buy the stock. It even goes until it gives a buyer-traveler warning to any retail investor (such as among the fans of the Uber-popular all-in pod) who wants to ignore his recommendation and buy anyway. “For anyone in the retail market that still chooses to ignore my tips to avoid spacs, please carefully review our revelations and make a fully up -to -date decision.”
The reason for these warnings is a bit fun. Palihapitiya essentially triggered the rise of SPACs from 2019 to 2021, providing him with the title of “SPAC KING”. This came after its first SPAC, Social Capital Hedosophia Holdings (IPOA), raised $ 600 million and got the Virgin Galactic Public in 2019.
But within a few years, the numbers have shown that while the spacs may be lucrative for spacs such as Palihapitiya and sometimes for the starting start, they rarely made money to investors. Or as the Yale Journal for the Regulation Put it: “The spacs have delivered bad returns after merging to shareholders for many years.”
Goldman Sachs has even banned them for three years. In June, he broke this ban and began working with the spacs again, urging Palihapitiya to post a poll on X asking: “Do I need to start a SPAC?”
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About 58,000 people voted and did not vote overwhelmingly (71%). This is due to the fact that Palihapitiya’s history was no better. In June, Marketwatch trained Abyssal efficiency records of almost all its spaces, showing that many have fallen above 90% from the start date.
When launching this new SPAC this week, Palihapitiya continued to argue that spacs are good for newly established businesses, as well as their employees and first VCS investors.
“The reason for the return now is simple, the imbalance between private and public markets has only expanded,” he wrote on X, citing the even greater number of unicorns today since 2019. “Workers often keep the wealth of paper that is difficult to turn into liquidity.
But he also acknowledged that “not all roses were.” Therefore, the warning to retail investors. (Social capital refused to comment further.)
He says he is trying to deal with some of the worst criticism: that spacs enrich the sponsors of the vehicle at the expense of everyone else.
With the “excellent American”, he says he has structured payments, so that the sponsors’ shares do not remain until shares hit 50%, 75%and 100%are increasing. “If the deal is a dog, no one wins. If he is a winner, we will all win … together,” he wrote.
But the question remains: With everything we know in 2025, if a startup chooses to be publicly through SPAC, either through Palihapitiya or any SPAC? The story would show: probably not, if they want their stock to perform well in the long run.
