Individually, no single anomoly can put a dent in Big Tech and its pole vaulting values. Combined, however, recent events are tearing at the credibility of technology makers. In the eyes of law makers, consumers and voters, technology – from social media to chip manufacturers – is fast becoming the elite ivory tower to bring down. It will take a lot of smoke and mirrors to stop the 6PM news and “left-click” Lenny to not notice this 800-pound gorilla list of recent anomolies…
The waters are chummed with money and the sharks are city governments! Big Tech is failing miserably to self-regulate AND enjoying unchecked valuations. Foxconn just snookered Wisconsin in slow motion over so many months for so much money that it’s been suggested, no tax payer alive today will live to see the debt repaid (4.1 BILLION after a laundry list of benefits and state obligations) AND Foxconn still managed to shrink their end of the bargain so they’ll spend less than 50% of what was promised – on a napkin.
Big Tech is usually pretty busy on any given day. Historically, most of what keeps them busy doesn’t include such a crossover into politics and the economy; it’s usually hardware and patent trouble or privacy and TOS hiccups. The oddities of tech houses are largley ignored en masse because the oddities are kept in house. Now tech’s strangeness is tresspassing on more established ground. When asked about the significance of IBM’s over-valued purchase of Red Hat, one money manager I spoke to crossed his arms and legs and was perplexed into silence.
It doesn’t really make sense to spend 60% MORE than you had to especially when it seems that you don’t have to. I asked the money manager what kind of red flag that might be and never got an answer. He simply agreed with a nod when I said, ‘that seems wierd.’
Smoke and mirrors might come in the nick of time and help prevent scrutiny. The holidays are always a time of product releases, hard advertising and consumer distraction. Add to that this is a midterm election year and the market is already going to dip on uncertainty making any tech dip appear a part of the natural cycles. Tech’s FANG stock are dipping a second, more serious time.
What tech needs to do is coordinate their fiascos so they don’t happen at the same time like this in the future. If they can’t, then we should look forward to mighty cool products next year from tech companies dogged by taxes, balls and chains and numerous Judy Jetson-like government entities snatching wads of cash out of tech’s fat wallets.
Salesforce.com purchase timeline
Adobe overvalues Marketo (still searching for that article!)
IBM’s 63% premium Red Hat purchase
First noted March 2018, the 500m loophole is new on EU’s 2% dot com tax
BigTech tax in SF for homeless help Twitter Spat
Wisconsin out foxxed; painful napkin deal with Foxconn
Nouveau riche: people who have recently acquired wealth, typically those perceived as ostentatious or lacking in good taste.