on Monday, Tesla It became the largest addition to the S&P 500, with a market capitalization of $ 650 billion. The company’s stock, which has risen nearly 700 percent in 2020, started Monday down 4 percent in pre-market trading.
Companies equal to a fraction of Tesla could have been included in the index long ago, but the approach to making it a great value company has brought challenges.
Despite all its technological innovation, the aura of the famous billionaire Elon Musk and its high-risk and rewarding business approach, Tesla for a long time could not meet the most monotonous requirements of American companies: to make a profit. The inclusion criteria require that the total of the fully audited company’s profits in the last four quarters be positive. Tesla This mark just hit this year.
With a market capitalization of $ 650 billion, the sudden weight that Tesla will throw into the market could have strange consequences.
“This is by far the largest index listing they have ever tried. The stock will immediately be one of the top 10 names in S&P, and it’s a nuts,” said Steve Susnick, senior strategist at Interactive Brokers in Greenwich, Connecticut.
Chris Mack, portfolio manager at investment advisor Harding Lovner in Bridgewater, NJ, has a lot of good things to say about Tesla as an innovative company. But he does not own the shares in his funds, which are focused on buying large tech companies with a strong track record of profitability, making them suitable for long-term holdings.
But many investors will not really have the option to buy Tesla shares.
One of the most widely followed metrics in the US stock market, the S&P 500 acts as the benchmark against which investors measure investments worth over $ 11 trillion. Of that, there is more than $ 4.5 trillion in index funds that mirror stocks in S&P.
These funds have been buying up Tesla shares since mid-November in preparation for Tesla’s entry into the S&P 500, which has raised its shares by more than 60 percent since the company’s listing was announced.
A former tech industry insider is now playing a major role in the wave of antitrust lawsuits against tech giants.
Dina Srinivasan, who previously worked as a digital advertising executive at WPP, the world’s largest advertising agency, quit her job three years ago after being disillusioned with the sheer power wielded by companies like Facebook and Google. Daisuke Wakabayashi reports in the New York Times.
“I felt, well, Facebook and Google were going to win and everyone would lose, and that’s how the cards were stacked,” Srinivasan said. “I don’t think this was widely understood.”
I brought the case against them instead, writing insider-oriented academic papers that reshaped antitrust thinking about corporations. And it was perfectly timed.
Federal regulators and state prosecutors have expressed growing concern about Big Tech’s unrestricted authority. But many struggled with how to file a lawsuit due to the complexity of the companies and markets in which they competed. And it was also difficult to argue that these companies are harmful to consumers because many of their products are free.
Marshall Steinbaum, Associate Professor in Economics at the University of Utah, “Her papers speak very clearly about the actual behavior of platforms and their competitive importance.” He wrote on Twitter. “It’s beneficial to implementers and comes from the perspective of someone who clearly knows the industry and the facts.”
In recent months, mounting concerns about the huge impact of the most powerful tech company has led to a flurry of antitrust lawsuits, with Three cases targeting Google And the Two cases against Facebook.
As the legal arguments take shape, there is evidence of Ms. Srinivasan’s fingerprints.
Since the release of the highly anticipated Cyberpunk 2077 video game on December 10, thousands of players have created viral videos with loads of bugs and bugs – a lot of fun – that distort the game and make it virtually unplayable for many users.
A lot of players Request a refund From distributors last week they overwhelmed Sony customer service representatives and even briefly removed a company website. In response, Sony and Microsoft said they will provide full refunds to anyone who purchased Cyberpunk 2077 through their online stores; Even Sony Address removedMike Isaac and Kellen Browning report in the New York Times.
The launch of Cyberpunk is one of the most visible disasters in video game history – a major ignition during the holiday shopping season by a studio widely considered to be darling in the industry. It shows the risks game studios can face when building so-called Triple-A games, titles backed by years of development and hundreds of millions of dollars.
“There was a lot, but they didn’t pay attention to the details,” said Billy Marty, a gamer who has bought high expectations about Cyberpunk, developed by Polish studio CD Projekt Red. “Obviously, this game has been accelerated.”
CD Projekt Red’s stock has fallen 41 percent since early December. Inside the studio, there was infighting and finger pointing. In a controversial meeting with directors on Thursday, CD Projekt Red employees pressured executives about unrealistic game deadlines and false promises.
Insiders said they have seen problems coming for months, based on game development history for CD Projekt Red and warning signs that Cyberpunk 2077 may not live up to its high expectations.