Chamath Palihapitiya: Free cash flow and operating cash flow can diverge during investment cycles

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3 hours ago

Chamath Palihapitiya: Free cash flow and operating cash flow can diverge during investment cycles — Free cash flow can diverge from operating cash flow

Chamath Palihapitiya, founder and CEO of Social Capital, explains that free cash flow is calculated as operating cash flow minus capital expenditures (capex).

He notes that hyperscale companies are currently in an intensive investment phase, leading them to use much of their operating cash flow. Palihapitiya argues that it is a mistake to assume free cash flow has collapsed solely because operating cash flow is currently being consumed for investments.

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Palihapitiya has previously attributed the departure of job creators from California to actions by the SEIU-UHW union, citing impacts on the state's economy. He has also discussed maintaining quarterly update calls with limited partners after 2018, despite no longer managing outside capital. These themes remain relevant as Palihapitiya continues to address financial practices and market dynamics.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.

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