For some tech companies, it could actually be beneficial in the long term to have them broken up by regulators. In this Motley Fool Live segment from “Ask Us Anything,” recorded on April 12, Fool.com contributor Nicholas Rossolillo takes a look at how greater regulation could play out for the future of the biggest tech companies.
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Nicholas Rossolillo: Historically speaking, yes, it’s a risk. I compare the time that we’re in maybe to like the late 1800s with the industrial revolution and you had a half a century of incredible growth and these huge industrialists that got very, very powerful and then they got broken up. The government started stepping in in the early 1900s and breaking them up. There’s a precedent in there for that happening eventually. I think it depends on which tech company we’re talking about though. Some have a greater risk of being broken up or having very harsh penalties levied against them if not outright broken up. Like Google Alphabet specifically and Meta have both had antitrust lawsuits brought against them for their acquisitions and some of their policies. Some of these companies, I think it would actually be potentially a positive long-term to have them broken up. For example, if Alphabet got broken up, that wouldn’t be the end of the world. I think Alphabet’s individual components would be just fine. Amazon is another one. I think if AWS, their Cloud segment was broken off from the rest of the business, I think the market will value AWS very, very highly and maybe the individual components are larger if you added them all together they all remain just together into the Amazon umbrella. I think it depends which company we’re talking about here, but regulatory risk is a factor, but it’s not necessarily a game over for any of these companies. It could potentially be a positive long term.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Nicholas Rossolillo owns Alphabet (C shares), Apple, and Meta Platforms, Inc. The Motley Fool owns and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Meta Platforms, Inc., and Microsoft. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
