Wedbush: Big tech antitrust bark worse than its bite

From a note to clients by analyst Daniel Ives that landed on my desktop Tuesday:

As we have seen over the last few weeks investors continue to shrug off the tech antitrust/breakup worries stemming from the much anticipated Congressional Bills heading to the House Judiciary Committee for review starting tomorrow in the Beltway and then likely head to the House for a vote on the measures. Right now there are five separate antitrust bills aimed at Big Tech to hold them accountable for anti-competitive behavior and curtailing this business practice going forward. Our discussions with investors further cement our view that unless there is law and legislative changes to current antitrust laws that the antitrust/breakup momentum will likely results in fines and business model tweaks (more restrictive M&A) rather than structural changes to FAANG names.

Our thoughts: First, the lack of consensus and divergence among both sides of the aisle on the antitrust issues remains a major issue to move things forward in this elongated investigation into the powerful grips of Apple, Amazon, Facebook, and Google. Second, despite the report/content and framework for recommendations around Big Tech players (e.g. M&A, business practices) without core law changes we believe this antitrust momentum hits a brick wall and for now is more a headline risk that investors are taking in stride.

Maintains Outperform rating and (Street-high) $185 target.

My take: Another version of yesterday’s note, which put Apple’s antitrust “overhang” at $20 a share.

9 Comments

  1. Gregg Thurman said:
    Nobody thought Apple would be found guilty of conspiracy to fix book prices either.

    There is common sense, then there is the judiciary and congress. I don’t trust either, no I am not a radical anarchist, I am a former police officer that has seen first hand how “justice” has been tortured in the name of defending the law.

    9
    June 22, 2021
  2. Gregg Thurman said:
    Huge show of disrespect. Dan Weil (The Street) referred to Toni Sacconaghi as “she” in referencing a Sacconaghi quote this morning.

    Article was published on Apple’s “Stocks” app.

    3
    June 22, 2021
    • Jerry Doyle said:
      Gregg Thurman: Not that it matters, but we do not know if Dan Weil’s reference is wrong. It is Toni’s Apple PTs that troubles me. I could care less about Toni’s gender status.

      0
      June 22, 2021
  3. bas flik said:
    we are seeing problems with availability samsung s21 in europe and price increases. almost impossible to order. looks like samsung has a component issue for the important s21.

    5
    June 22, 2021
    • Jerry Doyle said:
      @bas flik: Most informative “jewels-of-information!” Keep them coming bas f.

      1
      June 22, 2021
    • Good to know, Samsung confirmed an issue with camera lag in the S21 last month. A patch is expected soon but it won’t help Samsung with the perception. Next Galaxy Note model update is pushed off to 2022, tablet components are in short supply. There are now so many iPad models I suspect Apple retail can suggest a different model to make the sale.

      1
      June 22, 2021
  4. Michael Goldfeder said:
    Thanks for that update Bas. Hard to believe that anyone besides Apple ever has any supply chain issues according to the talking heads media. The best updates are those posted here on Apple 3.0.

    Dan Weil just made my Christmas Card list! Go Dan go!

    0
    June 22, 2021
  5. bas flik said:
    problem for lawmakers is that all these big tech companies are worldwide active. facebook has more than 3 billion users. only 10% live in usa. i can imagine usa antitrust laws go back to Standard Oil monopoly which was national and do not apply for the modern more global situation. Facebook can escape to rusland and cut a deal with putin. its really difficult.

    2
    June 22, 2021
  6. Jerry Doyle said:
    “…. Our thoughts: First, the lack of consensus and divergence among both sides of the aisle….”

    I long have felt this anti-trust movement would fizzle well short of its goals. Why? Because the general public and users of technology devices are not the one pushing this anti-trust effort, nor are they the ones complaining.

    2
    June 22, 2021

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