Massive Turning Point For Big Tech?

[mattee2264]

 I think it is very relevant to the investment forum given Big Tech represent over 20% of the index and have accounted for the majority of the returns over the last 5 years. Especially with all the passive indexing what happens to market sentiment towards Big Tech will have a big market impact.

 Re market abuse under competition law having a dominant position isn't the problem rather it is abuse of that position and detriment to consumer welfare. By that criteria Google will be fine (providing free search to consumers) as will Amazon (low prices). I don't think free social media has the same public benefit and the data privacy and disinformation issues are too hot to handle.

 https://www.theguardian.com/commentisfree/2020/nov/21/if-you-think-biden-administration-will-rein-in-big-tech-think-again-facebook

 Fun article below. Seems that the Biden administration is already chock full of Big Tech alumni. So probably already some degree of regulatory capture.

 I much preferred Apple when their main business was selling luxury phones. So their push for growth in services worries me a little especially as that is their main growth engine and the one that is raising questions. And I think Microsoft are probably out of the line of fire.

 But at the very least Big Tech face headwinds and it is a reflection of the crazy market that it can project with confidence all the so called positives of the Biden administration (massive stimulus, huge infrastructure spending, green energy initiatives etc) but ignore the potential negatives such as tax and regulation and higher interest rates on the basis they are either too remote or too distant in the future to matter.

 And of course the other thing is that Big Tech will have difficult comps to match as re-opening of the economy will be a net negative. People aren't gonna want to spend all their money on groceries and goods. They are going to want experiences. And people are going to spend less time online and on their phones.

 But I think that the Biden administration have other priorities for now with the virus and the stimulus. So this will come more into focus second half of the year when the virus is mostly under control and the economy has mostly recovered and markets start to think more about what the new normal will look like.

[Gregmal]

Viking if you are unable to have the discussion that everyone else is, please feel free to start a topic in the politics section. It would be a shame to have such a relevant subject in terms of investment ramifications get booted because you are obsessed with Trump. For instance,

https://www.cnbc.com/2020/07/22/these-six-tech-stocks-make-up-half-the-nasdaq-100s-value.html


Ex Tesla, thats basically more than 40% of the QQQ and a major component of S&P. In a world where indexes are dominant, this could have huge tails. In line with RTF or DooDiligence's points, there most certainly will be overhang and even limitations inserted, the question is whether they are forced, or done preemptively. But they will hurt the bottom line and they will create opportunity for competition.

If one asks where we are in the story, is it that farfetched to say its a mature one? The business cycle for these has more fruit ahead of it, or behind it? These are all worthwhile questions. Please dont ruin it.

[SharperDingaan]

There was a time in the newsbiz industry, when if you had a major 'scandal' you had to 'clear it' with the authorities.
If you didn't, you and your friends got a visit from the men in black. The stubborn got a more forceful visit, and suddenly found their presses and servers suffering disabling accidents, bank accounts/wire feeds cut off, and themselves as contagious lepers - the really stubborn, disappeared.

Propaganda is the 5th estate of statecraft, and is subject to the state - the 'west' just allows more freedoms, but it's freedoms with responsibilities. A China, or a Russia has less tolerance, and demonstrates daily that social media 'connectivity' is only as good as the state permits.

Most would expect go-forward expectations to evolve toward former approaches, behind closed doors, and with some high profile  'road-kill' along the way. Not a bad thing.

SD
 

[K2SO]

Particularly, the seemingly coordinated effort by Apple, Google and Amazon to end Parlor, for virtually no reason?

This does feel like a "fork in the road" moment and I fear the direction big tech is going. They have a lot of power and making major decisions based on nothing more than mob mentality public opinion is a dangerous precedent.

I DO NOT support Trump or the actions of his band of thugs, I'm not on Parler and I think the political echo chamber is a dangerous thing. HOWEVER, once these companies decide to go down this road, they need to find a way to implement rules consistently and fairly and in an unbiased way, and I'm not sure there's a way to actually do this.

The power they wield is absolutely massive and we're only beginning to see the consequences of this.

[mattee2264]

 On the other hand the success of political leadership and central bank governnance seems to be equated with the stock market of which Big Tech are a pretty major component. So that might delay their comeuppance until the economy is on a more stable footing and the Democrats have settled in. I'm sure a lot of politicians have a lot of their wealth wrapped up in the stock market so aren't going to try and take down a large segment of it.

[cubsfan]

^ Well the real problem with regulation with be this:  Big Tech does the party in power a HUGE favor by censorship. In return, that party in power
will do ALL they can to give them a slap on the wrist. We've seen this movie before.

[Spekulatius]

Let’s focus on what really matters. I think $TWTR and $Fb will have a down day tomorrow.

[muscleman]

Perhaps its just me, but the events following the 1/6 event that will not be spoken of in order to avoid getting political....was this not a potential tipping point against the already moving freight train that is big tech and its eventual day of reckoning with regulators over anti trust concerns? Particularly, the seemingly coordinated effort by Apple, Google and Amazon to end Parlor, for virtually no reason? After Twtr, IMO wrongly, but at the same time, borderline justifiably, banned Trump? You dont even have to have an opinion on the merits of Twitter/Trump or separately Parler...all you need to do is see how many businesses have no options and simply have to play ball with 2-3 gatekeepers. I could go on a bit more but the ramifications for this event IMO could be huge and I wouldn't be shocked to start seeing a tech selloff as people begin realizing the potential implications of this.

Twitter I think effectively just blew itself up. I'd expect horrific MAU comps for probably the next 12 months. FB has already had user issues masked by IG, I'd imagine it fares a bit better..its also been beaten up recently so some may be priced in. I really dont know much about Parler but is it any worse than Reddit or other places where ideas and people exchange? Apple and AMZN though in my opinion have largely been given passes and especially Apple, now between Epic, and then this...has really highlighted for even the less engaged how much control this handful of companies has over what are essentially utility like resources.

Are there differing interpretations? I think with something like GOOG, a breakup creates some short term headwinds but long term value emerges. I am not sure this is the case for all of them through. That and once again MSFT breezes through all this without even a question.

In the COVID thread, I mentioned that my baseline expectation is a replay of the 2000 dot com bubble top in 2021. It was unclear back then when the peak would happen. Now I think it is getting closer.

[Xerxes]

FB and Twitter, sure.
I think at the end, from their point of view, FB and Twitter felt that they had no choice and that the value of doing the ban suddenly outweighed not doing it.

I maybe getting the history a bit off, but going back the 90s, Fox News emerged as a strong player in the market because it gave a voice to a more conservative base. It was a masterstroke by the Murdoch family since most of the media at the time were left-leaning.

What stops a company, today, to harvest the current anger over the FB and Twitter bans and create their own social media platform. Sure the network effect are hard to replicate, but now you got a tailwind. I am sure they already plenty of social media tailored for different segment of political spectrum, but this must be a huge tailwind, with anyone/company with large enough resources.

[no_free_lunch]

There is such a company.  They were even referencing it in this thread.  Parler is similar to a twitter clone and Trump shifted to it recently.  Various big tech companies are de-hosting it.