Who will be short-changed when Buffett meets crypto whiz?Business | Ivan Tong 10 Jun 2019
The world is used to seeing records broken year after year at the annual auction for a charity lunch with the "god of stocks" Warren Buffett.
This year's auction raised eyebrows not merely for the record sum bid, but because the winner was 28-year-old Chinese entrepreneur Justin Sun Yuchen, the founder of cryptocurrency Tronix, also known as Tron or TRX token.
Sun, who became quite wealthy by speculation, is a totally different person compared with Buffett. His bid appears to be nothing more than a publicity stunt but the lunch could damage Buffett's reputation.
Some commentators say Buffett has made a silly mistake and he should not be dining with the cryptocurrency pioneer.
So, what are Sun's credentials? The crypto whiz is highly educated with a bachelor's degree in history from Peking University and a master's degree from the University of Pennsylvania. He started his career in an internet finance company in Silicon Valley and founded Tron in China two years ago. Tron is reportedly valued at US$2.56 billion.
Sun bid a record US$4.57 million (HK$35.64 million) to have lunch with Buffett and can invite as many as seven friends to the luncheon.
The entrepreneur says he wants to convince Buffett to install a digital currency wallet and transfer some Tron currencies to him.
If this works, Sun will become the first person to persuade the god of stocks - who has likened wagering on bitcoin to betting on zero or double-zero on a Las Vegas roulette wheel- to own virtual currencies, showing his ambition.
Or we can say that the cryptocurrency pioneer believes that his multi-million-dollar lunch will definitely pay off.
Other Chinese people have won Buffett's charity lunch auction in the past, but their motives have been only to promote themselves.
Chinese billionaires who became wealthy by their own merits do not necessarily need the god of stocks to teach them how to make money.
On the other hand, young upstarts who became rich by speculation may be more eager to meet and take pictures with Buffett, to boost their aura.
Buffett should know that the cryptocurrency fan aims to promote his business by the charity lunch - as other winners have done so at past events.
However, the 88-year-old billionaire investor has blasted Bitcoin several times, saying that it lacks unique value and is a "mirage."
He's even called Bitcoin "probably rat poison squared."
Therefore, you could say that by dining with Sun, Buffet is entertaining a fraud.
But why he is willing to do so?
The answer is quite simple. Buffet launched this annual auction in 2000 to raise money for the San Francisco-based Glide Foundation, a charity that supports the poor, homeless and those in need.
There has been an increasing number of Chinese upstarts bidding for the lunch in recent years and Buffett has never turned down an auction winner.
Moreover, even if Sun is a fraud, he is only taking money from Chinese investors, which has nothing to do with Buffett.
It just adds weight to his view that people should not invest in cryotocurrencies.
So, I believe that the Oracle of Omaha will not be persuaded by Sun to invest in Tron. Otherwise, he will be compared to a stumbling old horse who has lost the game to a younger player.
Ivan Tong is Editor in Chief of The Standard.