- Shark Tank investor Kevin O’Leary said he expects 20% of small businesses in sectors like travel, food, and entertainment will die because consumer behavior is changing.
- O’Leary told CNBC that he wouldn’t prop up a “dying” company, and the government shouldn’t either. The next stimulus plan doesn’t need to have PPP, he said.
- “Let the market be the market, let those things that are going to die, die, and those employees will support them through the transition,” the investor said.
Shark Tank investor Kevin O’Leary appeared on CNBC’s Halftime Report on Friday and said that because consumer preference is changing, certain small businesses will die and the government won’t be able to stop it.
O’Leary said he estimated that potentially 20% of small businesses in sectors like travel, entertainment, and food services are going to die soon. This death is not simply a result of the pandemic, but because the way consumers spend has changed.
“There is a change in consumer preference. Everybody’s still eating 2,200 calories a day, they’re just buying it a different way. Go support the way they’re buying it, the digital delivery,” he said.
“There’s nothing I can do or the government can do to save these small businesses because the consumer preference has changed,” he added.
O’Leary said the government shouldn’t help businesses that are bound to die, and he would agree with the government if it abandoned PPP, the small business aid, in the next stimulus plan. The investor added he will “go to zero in 20%” of his private portfolio, but there’s nothing he can do to save an unprofitable company — and he wouldn’t want to either.
“I can’t help them. They’re dead. And I don’t want the government taking my tax dollars to help them,” O’Leary said. The investor said he believes that there will be another stimulus “directly for unemployment,” and this will help the economy recover.
“It’s going to be a different America, 2.0, a digitized America, and not everybody’s going to make it. And my whole point is let the market be the market, let those things that are going to die, die, and those employees will support them through the transition. That’s how capitalism works,” the investor said.
Source: Business Insider