"I was the first student to arrive at Wharton from the Soviet Union, and the last one," Yuri Milner says in an interview with "Globes." "I arrived at Wharton in 1990, and a year later the Soviet Union ceased to exist, so I have the honor of being the first and the last." Milner’s acceptance to Wharton was unconventional - he did not take the usual tests, which just weren't available in the Soviet Union. "I did not meet the criteria, but they made an exception, and I have the deepest appreciation for the fact that they bet on me. It was a 25-year bet because 25 years later they invited me to speak at Wharton’s graduation ceremony."
"As you can imagine I arrived from beyond the iron curtain," Milner elaborates on his experiences at Wharton, "without any understanding or appreciation of capitalism. I didn’t even know the terminology. On the first day of school, I went to a lecture and people were discussing stocks and bonds and I had no idea what they were talking about. I needed to catch up to understand what the professors were even talking about."
By the time Milner gave a speech in front of the graduating class of Wharton in 2017, he was one of the best-known technology investors in the world, with a personal fortune valued in billions (recent estimates by "Forbes" place it at $4.4 billion). Among the companies he invested in via his investment company, DST Global, are Facebook, Twitter, Airbnb, Spotify, Alibaba, Xiaomi, WhatsApp, Snapchat, and more (his investments in Facebook and Twitter, which were divested in 2013-2014, became controversial later on due to lack of complete transparency regarding ties to Russian governmental investment bodies).
After his speech, Milner says, he started to think about donating to Wharton and searched for a way to connect the school and Israel, where he resided between 2005 and 2010. Both places, he says, "are so dear to me and close to my heart. And that was how the idea was born - to help more Israeli students get into the business school, and hopefully give them the opportunity I was lucky enough to receive after Wharton."
Milner, by the way, did not graduate with an MBA from Wharton. "When the dean called me and offered me the honor of giving the keynote speech, I asked whether they checked my academic file because I didn’t complete my degree," he laughs. "And the dean said, ‘well, we checked and we still want you to speak.’ Basically, that tells you that even if you drop out of Wharton, you can turn out fine. But for me, studying there was a life-changing experience, it really gave me an opportunity, a platform, a language, and terminology to navigate this new world."
Milner’s career also included weathering the crash of the dot.com bubble at the start of the 2000s, and in the week of our conversation, the technology stocks on Wall Street were seeing a steep decline. I ask Milner if he is monitoring the market fluctuations, or if he is focusing on the longer term. "Had we talked two weeks ago," he says, "you wouldn’t have asked me this question. Everything then seemed on an upturn, and it is likely we would have discussed a different question: why the technology stocks have seen their value rise so dramatically. I’ll try to answer both questions at the same time.
"First of all, human psychology plays a part in every action, including investment, and therefore there are always fluctuations in the markets. But if you negate the fluctuations, what happened is very clear. In the past months, investors repriced technology stocks dramatically, even considering the correction we are now seeing."
"A number of reasons. The main one is that during the pandemic it became clear to investors that internet-based business models are replacing a lot of offline business models, and though you could have seen hints of this a decade and even two decades ago, it is only in recent months that it became obvious to so many people."
"The second thing is the democratization of stock investment via technology. We invest in a company called Robinhood (an online investment platform), which enables everyone to start investing. People with $50, $100, $500, everyone can invest. There is now a bigger universe of people who can invest directly in the stock market, efficiently and on a commission-free basis." And the last reason Milner points out is the drop in the interest rates, which turned stocks into a much more attractive option. But this tide, he says, is lifting a lot of boats, not just the technology stocks.
en.globes.co.il - on September 16, 2020 © Copyright of Globes Publisher Itonut (1983) Ltd. 2020