50 states' Attorneys General are investigating Google for antitrust violations, doing the work that Federal regulators have shirked since the Reagan era.
Despite this, Google's investors are bullish, pushing the company's shares up to $1,397.81 yesterday for a market cap of $964b.
Facebook — under antitrust investigation by 47 states' Attorneys General — also closed out Monday with near-record share prices at $212.60 for a total market cap of $606.3b.
CNBC tech writer William Feuer interprets this to mean that "investors are unconcerned going into the new year about the ongoing investigations."
But I think another way of phrasing this is that investors understand that if Google and Facebook face meaningful competition regulation, it will be the result of a seismic regulatory shift that will also feature anti-money-laundering rules, wealth taxes, steeper progressive taxes, and a host of other anti-plutocratic measures, which will clip the wings of the high flyers who lead the investor class.
So for investors, there are two possible outcomes. Either:
1. Google and Facebook beat antitrust scrutiny because the oligarchs manage to kill the surging anti-inequality movement, in which case, tech investors can keep their money (and use it to buy luxury bunkers to cower in when unfettered global capitalism renders the planet unfit for human habitation); or
2. Google and Facebook are subjected to long-overdue antitrust action, which comes as part of a suite of measures to make a fairer, more humane economy, which breaks up all concentrated industry and claws back the wealth of the looters who profited from them.
Perhaps there's another bet you can make if you think that the world is going to undergo a fundamental shift to economic fairness, but I don't know how you short rapacious capitalism itself, given that the gains from your short position will be subjected to capital gains taxes at a rate higher than the taxes levied on real work; that the wealth that you retain will be subjected to a wealth-tax; and that any attempt to smuggle your gains offshore could land you in prison.
"We are not minimizing the regulatory risk, but Doubleclick/ad-tech stack revenues are predominantly related to GOOG networks," he said. "To the extent the government pursues an anti-trust case, we think GOOG would be well served to offer up some easy concessions."
However, he did identify a number of risks the company will still face in 2020, including "prospective anti-trust actions given perception that GOOG is a monopoly in search/requires them to change business practice."
Google hits an all-time high as investors shrug off antitrust investigations [William Feuer/CNBC]
(via Naked Capitalism)