Sunak to Reform Stock Market to Shore Up City of London’s Position
Lord Hill’s report was published yesterday to great fanfare. It appears that his recommendations have achieved a prudent balance on a topic we follow actively: dual-class shares. We do see the necessity for founders to have some control in the early years of taking a company public, in order to ensure longer term objectives, without shorter-term share price movements driving decisions. We particularly appreciate Lord Hill’s recommendation of a 5-year sunset clause and the cap of a 20:1 ratio for dual-class founder shares. The US has no such requirements, which leaves ‘Tech Emperors’ ruling long after they ought to remain in charge. We’re keen to observe how these rules work in practice and how companies’ premium listings might proceed as a result.
Apple Lobbies for Tax Breaks for Manufacturing More Chips in United States
Interesting news that sheds light on how geopolitical signalling can influence corporate investment. Considering its move into in-house ARM chips, the recent hiring of external lobbyists to back on-shoring demonstrates Apple’s serious longer term aspirations. With several countries now committing considerable sums to stimulate their local semiconductor industry, we expect other tech company boards to be similarly rethinking their supply chains and business models. Vertical integration may be on the rise, hand-in-hand with on-shoring.
‘The East Is Rising’: Xi Maps Out China’s Post-Covid Ascent
The escalating rhetoric of Us vs. Them is worrisome. It underlines the maxim that for every action, there’s a reaction. Sadly, the primary ground where this tug of war is taking place is technology…even as a massive transformation is underway, with ever more companies relying heavily on technology and complex supply chains. Doing so during a major geopolitical shift, increasingly nationalistic incentives and rapid developments within technology itself is not for fainthearted boards or investors.
Regulators keep close eye on Facebook’s deal with Australia
Death by a million cuts? The list of regulatory actions and oversights for advertising revenue dependent platforms continues to rise. The cost is quickly becoming prohibitive and it’s only a matter of time before profits are impacted (Facebook’s have already started showing signs). Between government actions and societal pressure on content moderation (and its equally high costs), investors ought to keep a close eye at impacts on current valuations.
Twitter Targets Covid Vaccine Misinformation With Labels and ‘Strike’ System
An interesting experiment – and innovation – by Twitter with respect to content moderation. It also recently launched Birdwatch, a crowd-sourced solution to content moderation, where Birdwatchers will be rating tweets, while fellow Birdwatchers will be rating each other. This service will be hosted by Twitter on a separate Birdwatch site, for the time being. Twitter also recently announced Super Follows, a feature which would allow users to charge their followers for exclusive benefits. These changes will hopefully provide Twitter with a more sustainable business model going forward.