Today we are watching…
1. Facebook (#fb)
The world’s largest social network is ducking for cover again as Washington rolls out yet another antitrust investigation against it. Zuckerberg has put blood, sweat, and tears into improving Facebook’s competitive position, most notably by snapping up WhatsApp and Instagram. Facebook makes almost double the amount of money that its rivals do when reinvesting profit back into the business, but this government inquiry threatens to bring the company back down to Earth. It could be ripped into at-least two separate companies by politicians, keen for new start-ups to have a chance at breaking into its market. Shareholders of Facebook would automatically receive shares of all the new companies. It’s crazy to think about, but stranger things have happened!
2. Alphabet (#googl)
Whatever Facebook can do; Google can match. Its parent, Alphabet, recently got mail from the government asking for more information about an ongoing antitrust investigation. Yes, that’s the same antitrust investigation Facebook is fighting. Washington has stuck its nose into the business of nearly every Silicon Valley internet giant this year, and investors know their favorite stocks could be in for it. Google will try its best to deflect accusations of being an unfair monopoly, but think about it, what search engine can really go toe-to-toe with Google? As investors try to wrap their heads around a Google chopped in half, that’s nigh-impossible when the market doesn’t know what divisions or what people could end up separated. Tech is still a growth hub, teaming with stock pickers, but for how long?