[DECODE Market] 2020, a historic year on the stock markets?

by bold-lichterman

In Decode Market, a monthly meeting with our eToro partner, we take stock of stock market news in the digital ecosystem with Antoine Fraysse-Soulier, head of market analysis at eToro. In this latest opus, the time has come to take stock after a year that will definitely remain apart on all fronts, including for Tech and Wall Street.

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If this year 2020 will obviously remain in the annals because of the coronavirus crisis, it will also remain so for the exceptional performances achieved on the stock markets. On Wall Street, the past year is indeed a very good year with a record number of IPOs in the technological ecosystem (420 IPOs launched for 145 billion dollars raised). It was in the second half of the year that the stock market got carried away with highly anticipated IPOs, such as Airbnb (rental of homes between individuals), Palantir (data analysis) and Snowflake (data storage in the cloud ). Some operations surprised observers, such as the IPO of DoorDash whose valuation reached exorbitant levels for its first day of listing ($ 70 billion then against $ 16 billion after its last round of table in June).

This stock market euphoria is starting to cause concern, to the point that the fear of a speculative bubble like the Internet bubble twenty years ago is starting to come to the fore. It must be said that the current situation is irrational at all levels. In the third quarter of 2020, American start-ups raised $ 36.5 billion, a jump of 30% from the previous year, and completed 223 mega-raises of $ 100 million or more on the whole year.

The euphoria is such that we come to speak of “Robinhood effect”, named after the leader in online brokerage in the United States with 13 million clients who has raised more than a billion dollars in just a few months and four operations at crazy amounts. More than the amounts, it is the rhythm of the round tables that worries. Instead of raising funds every 12 to 18 months, some start-ups, whose profitability is only a distant fantasy for the most part, have recently engaged the “rocket” mode with financing every three to six months . A hellish pace that could create and explode a tech bubble? Elements of answer in this last program of the year.

The “superstars” of “platform capitalism” at the zenith

If, on the other hand, there are some whose stock market performances do not surprise or worry many people, except the regulators in the United States and Europe, it is the GAFAMs and more generally all the platforms that have fired. take advantage of containment to achieve stratospheric results. While states spend trillions to avoid serial bankruptcies and mass unemployment, the stock market value of GAFAM continues to climb. They now weigh nearly 8 trillion dollars on the stock market, more than three times the GDP of France, against a little more than 2000 billion five years ago. Since January, their stock market prices have not experienced the crisis: + 35% for Facebook, + 67% for Amazon, + 68% for Apple. And what about Zoom, whose share jumped nearly 700% in 2020? Zoom has in fact established itself in March as the star software of the health crisis, providing a means of communication to hundreds of millions of people stranded at home.

If these “superstars” of “platform capitalism” seem invincible and unshakable today, the power of “Big Tech” is also increasingly contested by civil society, without this anger having hitherto weakened. their economic performance, nor the enthusiasm of consumers or Internet users. The American economist Shoshana Zuboff even mentions a “surveillance capitalism»Based on the monetization of personal data. Hence the urgency to organize this “fourth space”, after land, sea and air, in the eyes of Thierry Breton, European Commissioner responsible for the internal market. With Margrethe Vestager, Vice-President of the European Commission in charge of digital technology and competition, he advocates for a framework for online platforms, so as to “organize a digital space at the service of all Europeans“. Antoine Fraysse-Soulier, head of market analysis at eToro, gives us his perspective on the reinforced domination of these digital giants in the midst of a global pandemic and gives some keys to project towards the year 2021.

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