Chamath Palihapitiya, CEO of VC company Social Capital, has warned about a looming crisis in equity markets due to the issuance of low-interest debt. According to Palihapitiya, this might be the “biggest business secret hiding in plain sight right now,” as many companies won’t be able to refinance their debt, seeing their equity values collapse.
Social Capital CEO Chamath Palihapitiya Warns of Future Corporate Bankruptcies
Chamath Palihapitiya, CEO of VC company Social Capital, has warned about a crisis in equity markets that could develop as soon as 2024. Palihapitiya, whose net worth reaches $1 billion, states that corporate America might be close to experiencing difficulties due to the issuance of debt at very low-interest rates.
Palihapitiya stated:
It turns out that companies issued a ton of short-term debt during the pandemic at close to 0% interest rates. Hundreds of billions of dollars will come due starting Jan-2024 and will need to be refinanced at much higher rates.
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