Facebook, Apple, Amazon, Microsoft, and Google will emerge stronger from this downturn; Refinitiv: from 2008 to 2010, these companies acquired 100+ firms
Flush with cash, Facebook, Apple, Amazon, Microsoft and Google are positioned to emerge from a downturn stronger and more powerful. As usual.
New York TimesTripp Mickle
Context & Ripple Effects
This story extends a documented pattern rather than opening a new one. The same five companies have already been shown to widen their lead under stress: in 2019 they soared despite trade-war and regulatory headwinds, and in the first seven months of 2020 they rose a combined 37% while every other S&P 500 stock fell 6% — a divergence that made them a market unto themselves.
What the Refinitiv data adds is the mechanism behind that resilience: from 2008 to 2010 these firms acquired more than 100 companies, converting downturn distress into capability. That echoes the earlier finding that the biggest tech companies have the resources to out-innovate smaller rivals precisely when those rivals are struggling.
First-order effects
With balance sheets flush while smaller competitors face tightening capital, Facebook, Apple, Amazon, Microsoft, and Google can buy technology, teams, and market share at distressed prices — repeating the 2008-2010 run of 100+ acquisitions.
Investors treating the five as safe havens channel capital toward them during the selloff, so the downturn itself funds their expansion.
Second-order effects
Startups and mid-size rivals facing weaker access to capital face a choice between selling to the majors at cyclical lows or competing against acquirers who just bought their suppliers and talent.
Each consolidation wave strengthens the case for regulators who already cite these firms' scale as grounds for scrutiny, raising the odds that future acquisitions draw antitrust resistance.
Third-order effects
If every downturn ends with the same five holding a larger share of talent, products, and market value, recessions become structural consolidation events for tech — with concentration ratcheting up cycle after cycle.
Sustained counter-cyclical growth by a handful of firms pushes the policy question from 'is Big Tech too big' toward whether merger rules designed for normal cycles can handle buyers who get stronger in crises.
The trend: Downturns are functioning as consolidation accelerants for mega-cap tech, with each crisis transferring assets and share from the fragile to the cash-rich five.
Big tech stocks are tanking but since they're highly profitable they aren't in danger of going out of business. This is such an obvious observation it's weird to see it being treated as news. It is however consistent with the NYT's default anti-tech bias. https://www.nytimes.com/…
Mini acquisitions are coming... “During the Great Recession, Facebook, Amazon, Google, Apple and Microsoft acquired more than 100 companies from 2008 to 2010.” https://twitter.com/...
Apple, Amazon, Microsoft and the parent companies of Facebook and Google have lost more than $2.7 trillion in value so far this year — about the annual GDP of Britain. Still, they are positioned to emerge from a downturn stronger and more powerful. https://www.nytimes.com/...
Facebook, Microsoft, Google, Apple & Amazon had nearly $300 billion in cash, ex-debt, at the end of March: Loup Ventures. They have boosted bonuses, planned to add staff and will likely buy back shares & try to make acquisitions, despite the stock rout. https://www.nytimes.com/..…
Recall Eric Schmidt saying one of his biggest misses was that he didn't continue to hire aggressively all throughout the previous crisis. It's an opportunity to scoop up some of the best people. Chance favors the prepared mind... https://twitter.com/...
“In the months ahead, Microsoft, Google, Apple and Amazon are expected to boost hiring, buy more businesses and emerge on the other side of a bearish economy stronger and more powerful — even if they shed some of their total valuation.” #fulfillment https://www.nytimes.com/...
“During the Great Recession, Facebook, Amazon, Google, Apple and Microsoft acquired more than 100 companies from 2008 to 2010, according to Refinitiv, a financial data company. Some of those deals have become fundamental to their businesses today ...” https://www.nytimes.com/...
The leading big tech companies with strong balance sheets will use this downturn to attract talent, make strategic acquisitions, and innovate in ways they may not have during boom times. The leading crypto companies will do this as well, only on steroids https://www.nytimes.com/.…