The 449-page report that followed a 16-month investigation by US politicians into big tech, landed on Tuesday with a whimper rather than a bang. Also, the likely consequences of lawmakers’ proposals will, ironically, help rather than hurt the share prices of the four giants targeted – Apple, Amazon, Facebook and Alphabet.
Read also: Alec Hogg: Gradually then suddenly – it happens with criminals, too
The report highlighted the power of these Big Four exponential companies by referring to their combined market cap of over $5-trillion – for local context, that’s 14 times South Africa’s GDP. Compiled by Democratic Party members of the House of Representatives’ antitrust subcommittee, the report argues for the Big Four to be broken up. But such is the antagonism between the US’s two major political parties that a united effort from Washington is unlikely.
___STEADY_PAYWALL___
Even in the event that both sides of the House came together, an even bigger hurdle to any breakup is US law. Of the Big Four, Facebook is the most vulnerable. A detailed internal document compiled by its legal team, however, described a breakup scenario as “a complete nonstarter.”
Read also: Alec Hogg: Discipline and details, the two key attributes of SA’s super wealth creator
A more likely result, as concluded today by our partners at the Wall Street Journal, is the Big Four will in future be prevented from making major acquisitions. Between then they have a continually expanding cash pile, currently almost $250billion. Stopped from acquisitive growth would require an alternative approach, triggering share buybacks and increased dividend payouts. Apple’s share price has been supported by this strategy. If forced to follow by the politicians, shares prices of the others will be similarly buoyed.
For your attention today…
For downloading…
I’m really proud of the way our two new products are settling down. They are excellent additions to your options. The latest of both are available this morning:
* Episode Four of my weekly Inside Investing podcast features an interview with Bernard Swanepoel on the major investment theme to emerge from the Joburg Mining Indaba which ended yesterday. Plus insights on Sasol, Tongaat Hullet and Orbvest. Here’s the link to access it:Â https://www.biznews.com/global-investing/2020/10/08/inside-investing-2
* Also just published is the latest BizNews Digest PDF with clickable links to plenty of additional content to get deeper into the stories. There’s also a click-through at the bottom of Page One to an alert service where we’ll email you when the PDF is published on Thursday evening. Here’s the link to the latest edition:Â https://bit.ly/2GIjdoZ
Webinar Alert…..
* Cracking line up of experts to share ideas on how to build wealth for the long-term at today’s BizNews Finance Friday at noon. Independent financial advisor Dawn Ridler, of Kerenga Wealth Ecology in Johannesburg, and investment specialists Albert Coetzee and Marc Lindley of Ninety One Investment Platform are available to answer your money questions. Register here: https://attendee.gotowebinar.com/register/6646694434270030861.
DOWNLOAD THE FREE BIZNEWS.COM APP
Click on the links below to download your own BizNews.com App:
Apple:Â https://apps.apple.com/za/app/biznews-com/id1517392839
Android:Â https://play.google.com/store/apps/details?id=com.goodbarber.biznews&hl=en