Reddit’s Alexis Ohanian compared Facebook to Marvel villain Thanos, saying its growth is ‘inevitable’ unless the government intervenes

alexis ohanian
Alexis Ohanian.

  • Alexis Ohanian said Facebook’s explosive growth is “inevitable” unless lawmakers intervene.
  • The Reddit founder said government intervention is the only thing to “stop the march” of big tech firms.
  • Regulatory talk is growing louder in Washington as scrutiny mounts on the tech industry.
  • See more stories on Insider’s business page.

Reddit co-founder Alexis Ohanian said the only thing that can reel in tech’s biggest players is the US government.

Ohanian told the Wharton Business Daily’s Dan Leony that “it is now very obvious that there isn’t going to be anything to stop the march of” Facebook, Apple, Amazon, Netflix, and Google without government intervention.

He likened Facebook specifically to the Marvel villain Thanos, who declares in the final installments of the franchise that he is “inevitable” in his mission to wipe out half the universe.

“Talk about Thanos saying, ‘I’m inevitable,’ like Facebook growing to a two trillion-dollar company is inevitable, short of government intervention,” Ohanian said. Facebook hit a $1 trillion valuation in late June after a judge tossed out lawsuits filed by the Federal Trade Commission and state attorneys general.

The venture capitalist also said he hopes the conversations among lawmakers in regard to tech regulation are “well-informed” about technology since he said heavier oversight, if carried out incorrectly, could stifle innovation.

Chatter about finally regulating the lucrative tech world has grown louder in the past year. Lawmakers investigated the Big Four over online competition and concluded last fall that they are “the kinds of monopolies we last saw in the era of oil barons and railroad tycoons.”

Big tech companies are also facing lawsuits from the FTC, state attorneys general, and agencies across the pond. The FTC, which is empowered to enforce antitrust laws, is now led by a vocal big tech critic. And Congress unveiled a package of antitrust bills in June intended to keep tech firms from growing too powerful.

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Tech stocks can soar another 25% as reopening boosts digital transformations, Wedbush says

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  • Tech stocks will climb 25% or more over the next year as economic-reopening progress spurs new growth, Wedbush said Tuesday.
  • FAANG, cloud, and cybersecurity names will lead the climb, while Uber and Lyft represent the best reopening plays, they added.
  • Valuation concerns are valid, but secular trends lifting the group will offset such worries, according to Wedbush.
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The trends poised to lift all manner of tech stocks are only just beginning, Wedbush analysts Dan Ives and Strecker Backe said.

Equity investors are in the midst of a transition. While tech mega-caps and other growth stocks led the bulk of last year’s rally, expectations for a swift economic reopening recently shifted attention toward companies set to benefit most from a recovery. Value and cyclical names have roared higher and left tech names lagging.

Wedbush doesn’t expect the underperformance to last. Blowout earnings from pandemic-darling Zoom show tech stocks are set for another quarter of “beat and raise” reports, the analysts said. Digital transformations will take hold soon after and lift tech stocks by 25% or more over the next 12 months, they added. 

“As we have witnessed in the cloud, collaboration, cybersecurity, and 5G, this tech party is just getting started with consumer and enterprise-driven demand catalyzing a multi-year growth boom for the tech sector looking ahead,” the team said.

Wedbush sees FAANG, cloud, and cybersecurity stocks leading the charge. Disruptive recovery names like Uber and Lyft are the firm’s favorite reopening plays, as lifted restrictions will likely revive ridership.

The political backdrop also lends itself to continued strength in tech stocks, according to Wedbush. The Biden administration will likely have a softer tone against China and ease tensions in the “Cold Tech War,” the analysts said. The 2020 SolarWinds hack also places a fresh focus on cybersecurity efforts in government, they added.

To be sure, the tech sector still enjoys elevated valuations following last year’s rally. Debate over the stocks’ pricing will continue, but Ives and Backe expect the group to swing higher even in the face of the broader rotation to value.

“We believe the underlying fundamental stories and white-hot growth creates a yellow brick road to an upward bullish trend,” they said.

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FAANG stocks tumble as Georgia election result heightens uncertainty for Big Tech

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FAANG stocks face uncertainty.

  • Georgia’s run-off election results are creating heightened uncertainty for Big Tech names, as the likelihood of regulation from a Democrat-controlled Senate increases.
  • Facebook, Apple, Amazon, Netflix, and Google were all down around 2% in premarket trades.
  • Traders and strategists argue that cyclical and value stocks will benefit from the result, while FAANG names may suffer.
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Early trading after the open on Wednesday morning reflected fears among investors that FAANG stocks could be in for a rough ride with Democrats likely to take the Senate. Shares of both Facebook and Apple were down almost 3%, while Amazon and Google parent Alphabet were each down nearly 2%. 

Democrat Raphael Warnock has pulled off a narrow victory in one of the two Senate runoffs, while Jon Ossoff is also leading a close race against Republican candidate David Perdue, with the only votes remaining to be counted from democratic strongholds around Atlanta.

Big tech names were trading lower, as companies like Facebook, Amazon and Google are likely to face greater pressure from Democrats in the Senate, who have promised greater scrutiny of tech giants, according to the New York Times.

The potential for a more aggressive regulatory approach from Democrats should have Big Tech investors ready for underperformance, argues Tom Essaye, founder of Sevens Report.

Essaye said in a note, “in the immediate term, markets are pricing in more stimulus. From an equity standpoint, that means tech underperformance and cyclical/value outperformance. The biggest takeaway from the Democrats win is more power behind the cyclical/value/higher rates trade,” per CNBC.

“Once the market digests this result, a pullback would not shock us at all, as at these levels the market is not pricing in tougher regulation, substantially higher rates or an earnings headwind, and the chances of all three went up overnight.”

On the other hand, Brian Levitt, global market strategist at Invesco said in a note that he expects value stocks and emerging markets to benefit as a result.

Levitt said in a note he believes Democrats may “use their latest opportunity to advance greater fiscal spending to support the economic recovery. In a more-pronounced economic recovery, we would expect an even further rise in Treasury rates, tightening of municipal and corporate bond spreads, weakening of the dollar, and higher performance of value stocks and emerging market equities,” per MarketWatch.

 

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