Warren Buffett. Picture: REUTERS
Warren Buffett. Picture: REUTERS

Portland — Cryptocurrency pioneer Justin Sun bid a record $4.57m to have lunch with Warren Buffett, who famously referred to Bitcoin as “probably rat poison squared.”

Oh, to be a fly on the wall.

Sun launched Tronix, also known as Tron or TRX token, in 2017. It is valued at $2.56bn and is the 10th largest cryptocurrency in the world, according to data provider CoinMarketCap.com. The 28-year-old Chinese entrepreneur said he hopes to educate the Oracle of Omaha on cryptocurrency and the underlying technology, called blockchain.

Buffett said he was looking forward to meeting Sun and his friends.

“It is very common in investment circles that people will change their minds,” Sun said in a telephone interview. “Investment opportunities are best when lots of people are underestimating the technology.”

Buffett and his longtime business partner Charles Munger have criticised cryptocurrencies in the past. The 95-year-old Munger called Bitcoin a “noxious poison”. Buffett, who says there’s no value being produced from the asset, at least gave a nod to blockchain technology as “important” in an interview with CNBC earlier in 2019.

“Even one of the most successful investors of all times can sometimes miss a coming wave,” Sun wrote in an open letter to the crypto community. “Buffett has admitted he overpaid for big investment food giant Kraft Heinz, while failing to realise the potential of the likes of Amazon.com; Alphabet, the parent of Google; and even Apple.”

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Glide charity

The annual auction raises money for San Francisco-based charity Glide, which Buffett’s late wife Susan supported. More than $30m has been raised over the years, as bid amounts have climbed. Glide provides meals for the city’s homeless, offers support to domestic violence victims and helps people find shelter.

“I’m delighted with the fact that Justin has won the lunch and am looking forward to meeting him and his friends,” Buffett said in an e-mailed comment from his assistant. “We are going to have a good time, and Glide will use his contribution to help many thousands of people.”

Previous auction winners have included Greenlight Capital’s David Einhorn, who was the highest bidder in 2003. Ted Weschler won two auctions and was later hired by Buffett’s Berkshire Hathaway as an investing deputy. The 2019 bid was about 38% higher than the winning bid in 2018.

Sun previously founded Peiwo, a Snapchat-like app for China with millions of users. He then started the token popularly known as Tron by using much of Ethereum’s computer code and parts of other startups’ white papers to write his own.

He bought the popular software file-sharing application BitTorrent for $120m in 2018. Demand for the coin surged when Sun announced the BTT token, able to run on both Tron and BitTorrent networks. On May 30, BitTorrent announced it will let users store files across a distributed network of computers using BTT.

Tron, meanwhile, has attracted scores of gaming and gambling applications. Earlier this year, Tron bought app store CoinPlay.

The bidding war for the lunch started May 26. It heated up early in the week and fell fairly quiet heading into the final day of the auction when a handful of bids came in that exceeded $4m.

Although he is deep into crypto, Sun said he trades traditional stocks and reads annual reports of technology companies. He hopes to learn more about Buffett’s value-investment strategy at the luncheon.

The time and place of the luncheon has yet to be determined, according to Sun. It is typically held at the Smith & Wollensky steakhouse in New York.

Sun, who can invite as many as seven people to join him, said he will  choose among his most-persuasive friends as well as the most influential people in the crypto community. It is likely to be a tough sell to get the 88-year-old billionaire investor to change his mind.

“Cryptocurrencies will come to bad endings,” Buffett said in 2018 at his annual shareholder meeting.

Bloomberg