This article first appeared in The Edge Malaysia Weekly on December 28, 2020 - January 3, 2021
SHARE prices of Tesla, Amazon and Facebook surged meteorically during the pandemic
CEO and product architect of Tesla Inc
CEO of Space Exploration Technologies Corp (SpaceX)
The shares of electric carmaker Tesla Inc surged after S&P Global announced on Nov 16 that the company would be included in the S&P 500 Index on Dec 21. As a result, Elon Musk’s fortune jumped by US$7 billion to US$128 billion this year, making him the world’s second-richest person behind Jeff Bezos, the founder and CEO of internet giant Amazon.com Inc.
Tesla shares shot up to US$408.09 on Nov 16, 450% higher than the US$72.24 it was at in March.
For a new entrant to the index, Tesla has an unusually large market cap of US$600.26 billion. Analysts say that has been “doing wonders for its share price and its founder’s compensation package”.
As at Oct 30, before the S&P announcement, Tesla was the 14th-biggest stock in Vanguard’s total stock market index fund.
“If you ask me, do I think if Tesla will be worth more than this in five years? I think the answer is yes,” Musk has said in interviews.
Apart from being founder and chief executive of Tesla, Musk is also the founder of Space Exploration Technologies Corp (SpaceX), an aerospace manufacturer and space transport services company headquartered in Hawthorne, California.
On Nov 15, SpaceX successfully launched its second crewed mission for the National Aeronautics and Space Administration, sending four astronauts on a six-month journey to the International Space Station (ISS). This was the second crewed flight for Musk’s company, following the successful Demo-2 mission in May that took two astronauts to the ISS on a test flight.
Founder, chairman and CEO
Facebook Inc
While shares of Facebook Inc hit a historic US$293.66 on Aug 28 during the Covid-19 pandemic, Mark Zuckerberg risks losing the social media empire as the US Federal Trade Commission (FTC) formally filed an antitrust lawsuit against the technology giant on Dec 9.
It accuses Facebook of abusing its monopoly powers in social networking to stifle competition and is suing it for illegally maintaining its personal social networking monopoly through a “years-long course of anti-competitive conduct”. The complaint alleges that Facebook has engaged in a systematic strategy, following an investigation in cooperation with a coalition of attorney-generals from 46 states, the District of Columbia, as well as Guam.
The FTC says the tech giant’s US$1 billion acquisition of photo-sharing app Instagram in 2012, and the US$19 billion purchase of international messaging service WhatsApp in 2014, as well as the imposition of anti-competitive conditions on software developers to eliminate threats to its monopoly, have been harmful to competition as it leaves consumers with few choices for personal social networking. It also deprives advertisers of the benefits of competition.
According to the FTC’s complaint, Facebook is “the world’s dominant personal social networking service and has monopoly power in a market for personal social networking services”, with its unmatched position providing it with “staggering profits”.
In 2019, Facebook generated revenue of more than US$70 billion and a profit of US$18.5 billion.
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