Tech Breakups and Cyber Warfare

Hey Influence Traders,

The last week of March the CEOs of Facebook, Google and Twitter were once again called to testify in front of Congress.

They are under the gun for, among other things, issues of antitrust and cybersecurity.

Antitrust

Biden is such a fan of Franklin D. Roosevelt that he wants to be the next FDR.

Biden believes the FDR’s focus on antitrust enforcement helped usher in an era of entrepreneurship and small-business growth.

As such, he’s been putting the pieces in place to reinvigorate antitrust laws. And new US Attorney General, Merrick Garland, has pledged to “vigorously” enforce them.

On top of that throw in Lina Khan and Tim Wu, and you have an antitrust tech tsunami.

Columbia Law professor Lina Khan has been nominated for the Federal Trade Commission. She is a leader in the progressive movement known as “hipster antitrust,” which calls for new ways of reviewing companies’ market control, including how that affects people’s “roles as citizens.”

Kahn is a staunch antitrust advocate and her nomination signals an intent by the administration to be aggressive on antitrust enforcement. She has been known to call out Amazon and other major tech platforms and advocate for an overhaul of competition law.

She will be paired with her Columbia Law colleague, Tim Wu, who was recently named to the National Economic Council and who has been vocal about attacking consumer welfarism in antitrust.

This spells trouble for tech firms, which are already under the microscope.

Data Breaches

American business is under constant attack.

China, Russia and other bad actors are engaging in daily incursions into US tech.

On top of the ongoing scrutiny, it was announced this week that data from more than 500 million Facebook users was found on a website for hackers.

According to Business Insider, the information included phone numbers, Facebook IDs, full names, locations, birthdates and email addresses.

Even Mark Zuckerberg’s personal cell phone number!

The announcement highlighted the vast amount of information collected by Facebook and other social media sites, and the ongoing concerns as to how secure that information is.

This is not the first time Facebook has faced security issues. In 2019, the names, phone numbers and unique user IDs of more than 267 million Facebook users were found in a database on the open Internet.

This is not just an issue for big tech but for all companies.

Companies are under constant attack from foreign powers, such as China and Russia, and they need to be able to respond in a nimble fashion.

Cybersecurity firms are going to grow in demand and impact as time goes on.

A recent survey found that nearly 75% of tech leaders think the government’s response to the SolarWinds hack and its aftermath has been average or fair. Not a single respondent said the response was excellent.

And 33% of respondents said that the chief technology priority for the Biden administration should be defining a national cybersecurity protocol.

That caused me to look at cybersecurity opportunities.

Cybersecurity

U.S. companies have to beef up their cyber protocols.

Enough red flags have gone up indicating that we need to better ensure security.

Defense in the years ahead will be more about computers than tanks.

China and Russia have made it clear that we need to expect constant threats to our tech infrastructure.

Those threats can be countered through strong cyber programs.

That got me looking at a number of strong cyber companies like:

        • CrowdStrike Holdings (Ticker: CRWD)
        • Ping Identity Holding Corp. (Ticker: PING)
        • CyberArk Software (Ticker: CYBR)
        • Proofpoint (Ticker: PFPT)

But one that I really like is Palantir (Ticker: PLTR).

It is the type of nimble company with solid tech that can pivot to address ongoing threats.

PLTR has a history of engaging in counterterrorism, and according to its website was “founded on the conviction that it's essential to preserve fundamental principles of privacy and civil liberties while using data.”

PLTR spent the past month slowly sliding in stock price, but just announced that the National Nuclear Security Administration awarded it a five-year contract.

The contract is valued at $89.9 million.

PLTR will provide the NNSA with a platform for effective knowledge management and data-driven decision making.

And it could provide a profit platform for #PowerMovers …

Cutting Through the Noise for You.


Frank

 

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