How well did Shervin Pishevar’s February Tweetstorm predict the future?
In early February, Uber investor Shervin Pishevar took up the cause of cautioning investors of a coming financial storm, warning — among other predictions — of a massive temporary drop in Bitcoin value, a steep correction in the stock market, and bond volatility that will ripple through many other sectors.
Pishevar, co-founder of HyperloopOne and one of the key influencers of finance on social media with nearly 90,000 Twitter followers, posted a 50-tweet manifesto across two days of messaging that revealed his insights into interconnected issues — innovation in the tech sector, infrastructure in the United States, and even Elon Musk’s Space X enterprise.
But how well did these Tweets hold up over time? Pretty well, it appears.
Prominent among Shervin Pishevar’s topics: The rise of Silicon Valley monopolies and the dominance they exert over the Internet, particularly the companies Amazon, Apple, Facebook, Microsoft, and Alphabet, owner of Google.
“Just like Ma Bell, these five giants have too much power, [and are] stifling startups,” Pishevar tweeted, referencing the telecom monopoly once held by AT&T’s Bell Operating Companies, before a federal antitrust ruling in the early 1980s forced its breakup into newly created regional companies known as the Baby Bells.
The market influence exercised by these five tech giants, Pishevar said, has become so oppressive and anticompetitive that the industry might not see another Uber or Airbnb for 10 years or more — unless, that is, the government takes steps to restrain the “absolute power” of these “Modern Ma Bells”.
“Breaking up Ma Bell unleashed many companies, and it was best for consumers,” Pishevar wrote. “But these five ‘Modern Ma Bells’ have much more power than Ma Bell ever did — extreme amounts of power, with access to data that no sovereign [country] has… They have the power of a nation-state to destroy vulnerable startups that threaten their monopolies. Uber might be the last giant to eke out before it was too late.”
One of the advantages given to them by their size and power is the ability to corner out any new company that might challenge them — either by quietly buying out any challenger, or outright crushing them with overwhelming market forces.
” Small acquisitions are silent assassinations,” he said. “They’ll use that great power overtly and covertly. We have five robber barons destroying one startup after another.”
That’s exactly what antitrust laws were designed to stop: a lack of competition from a scarcity of companies that leaves consumers at the mercy of the few who retain control, and makes it impossible for smaller companies to rise up and confront them.
But beyond the aggressive acquisition of smaller companies, which definitely contributes to the slow strangle of competition against the “Big 5”, Amazon and Facebook have been showing how much power and influence they have in other ways.
Several weeks ago, Facebook CEO Mark Zuckerberg testified before congress that his company had improperly handled data through its relationship with now-defunct Cambridge Analytica. Beyond the media spectacle of Zuckerberg taking a defensive stance against congressional leaders, the testimony illustrated how much of our personal lives Facebook can access, use and control.
One month after the Zuckerberg testimony, which sent Facebook into a damage control spiral where the social net hemorrhaged users by the thousands, the top stories about the social media platform are mostly about the near-unchecked power of the company’s CEO and chairman.
“He has control of the content that over 2.1 billion people see. He cannot be removed from office,” said NYU Professor Scott Galloway in an interview with CNBC. “In my view, the most powerful, dangerous person in the world is ‘the Zuck’.”
Amazon’s Jeff Bezos is also facing criticism for his abrupt move to stop construction on the company’s new Seattle office space pending a city council vote on a proposed tax new tax. The proposed tax on high-earning businesses earning more than $20 million a year would go toward supporting the homeless through housing and services.
The rule would tax employees at companies like Amazon 26 cents per hour, which could end up costing $500 per employee, per year. Eventually, it would manifest as a payroll tax. But For Bezos, the power move of halting construction on the outcome of the vote instilled some fear of what could happen if the company left town.
But beyond training his crosshairs on the top tech companies, Shervin Pishevar took aim at an old villain as well: Inflation.
“Inflation is dead. Long live inflation! Inflation never manifests itself the way many expect,” he observed. “We’ve managed to export inflation for decades now. But who is left to take it — especially with uncertainty coming from Washington over every major global trade deal?”
Once again, Pishevar was right on the money. Not only was consumer inflation softer than expected last month, with consumer prices going up a paltry 0.2 percent, real estate publications admitted that when you remove housing from the inflation numbers, the needle is barely moving.
However, Ian Shepherdson, Pantheon Macro’s chief economist, was quick to tell CNBC viewers that even though food and energy prices aren’t pushing the economy through the roof, the Fed is still expected to raise interest rates.
“The wage numbers for the last couple of years have been kind of flat at about 2.5 percent and that’s not really scaring anybody, so that raises the question why on earth is the Fed raising rates?,” Shepherdson mused in the interview. “It is because of fear of what might be in the pipeline.”
Shervin Pishevar’s tweets frequently switch between political commentary, inspirational quotes and market theory, but his frenetic Feb. 8th string of messages was on point. Look for Pishevar to continue to make predictions at his Twitter account, especially with trade agreements in flux and the global economy on shaky ground.