Big Tech’s In Big Trouble

Invest Here Instead [The Daily Reckoning] November 25, 2022 [WEBSITE]( | [UNSUBSCRIBE]( Big Tech’s In Big Trouble - What Wall Street calls “tech” really isn’t really tech at all… - Twitter wasted nearly $50,000 each day on food catering alone… - Then Byron King shows you why Big Tech is in Big Trouble, and where you might want to invest your money next year… [URGENT: Your $557 Credit Is Now Available]( I am pleased to announce that you've got an immediate $557.00 credit for our research you can take advantage of… **DISCLAIMER: Please note, this offer is limited to the first 1,000 that take advantage today** [Click Here To Learn How To Claim This Credit]( Pittsburgh, Pennsylvania November 25, 2022 Editor’s note: Is Big Tech’s market reign coming to an end? And where should you put your investment money in 2023? Today, natural resources maven Byron King shows you the answers. [Byron King] BYRON KING Dear Reader , Let’s discuss the so-called “tech” sector for just a moment and how it turned into stock market roadkill in 2022. Then we’ll address how it sets up a favorable new investment climate for hard assets in the coming year. I admit, I have little use for the tech sector except to say that what we in the West call tech isn’t really tech. Most of it is hyped-up relational database vaporware. And if much of that bilge simply vanished, the world would scarcely miss it — or even know that it’s gone. Let’s look at one particular tech play: Twitter, a strange company in so many ways. You’ve probably followed the story in the past month or two because it’s just so hard to miss. Twitter tales are everywhere. Until recently, Twitter was notorious for being a politicized fortress of left-wing, free-speech-hating, overpaid twerps whose life ambition was, based on the evidence, to censor things that offended their delicate, indoctrinated, Woke frames of mind. The company is based, appropriately enough, in the heart of San Fran Psycho. (And don’t you just love it when, on occasion, critical facts support invidious stereotypes?). Indeed, one inside joke depicted the place as a sort of daycare venue for immature big people with profound arrested development issues. Then along came Elon Musk. He bought Twitter and promptly fired well over half of the employees and most of the contractors. Okay, to be more accurate he canceled their building and computer access, barred them from the premises, and gave them three months of just-go-away-pay to comply with California and federal labor laws. Adiós, little snowflakes, right? There are innumerable angles to this entire ordeal of Musk and Twitter. One that caught my eye the other day was how Tesla-Man canceled food catering services at Big Twitter headquarters, the corporate mothership itself. The company was spending $13 million each year to feed the staff three squares per day. At least, to feed those hungry proles and working stiffs who actually showed up to the building. Divide $13 million by 12 months per year, for $1.083 million per month. And let’s say that there are 22 workdays per month, which calculates to $49,242 per day for the catering. Apparently, Musk did some more math. He figured that Twitter was paying $400 per meal to feed about 123 mouths who showed up, on average, every day at the serving line. Heck, it would be cheaper to dine on full course repasts at the Nob Hill Fairmont! And per Musk, these 123 on-site diners represent about 10% of the Twitter workforce; the rest of the payroll deadweight allegedly “work from home.” (Yeah, I bet they were slaving away from dawn until dusk, right? Hmm… maybe not). And for the distinct privilege and high honor of doing this superfund-level toxic cleanup act on Twitter, Musk ponied up something like $44 billion to buy the company. Clearly, the ongoing Twitter saga illustrates the embarrassing, disgusting disconnect in modern finance between so-called “market value” (or what we see in the stock markets) versus inherent value rooted in basic wealth creation via production of real and useful goods and services. Below, I show you why Big Tech is in Big Trouble, and why this is the time to pivot away from these dying dinosaurs into hard assets. Read on. Regards, Byron King for The Daily Reckoning Editor’s note: Governments around the world and large institutional investors are stocking up on gold. In fact, central banks have recently been buying gold at the fastest rate since the 1960s! That’s why we recommend that you get your hands on some gold NOW if you haven’t already. When the panic hits, demand will explode and supplies will vanish. And we recommend the [Hard Assets Alliance]( for your precious metals. We love the Hard Assets Alliance so much, we entered into a partnership with them several years ago. Hard Assets Alliance allows you to buy and take delivery with exceptionally low costs. Or with a single click, you can buy and store your metal in your choice of five audited vaults worldwide. It’s the hands-down easiest way to get started with gold. [It’s FREE to sign up for an account.]( Once you’ve completed the short account opening process, you’ll be able to shop for the type of gold bars and coins you want to buy right away. [Go here now to create your FREE account.]( [Man Who Predicted Bitcoin Warns: “Don’t Buy Bitcoin!”]( [Click here for more...]( James Altucher first predicted Bitcoin all the way back in 2013… And ever since, he’s been one of the biggest advocates for it. But now, he’s warning Americans that buying Bitcoin could be a big mistake… [Click Here To See Why]( The Daily Reckoning Presents: “As 2022 ends, it’s time to get real and get into hard assets, because that’s where the world is headed”… ****************************** The Death Rattles of Big Tech By Byron King [Byron King] BYRON KING Say what you will about old industrial era titans like Andrew Carnegie, John D. Rockefeller, George Westinghouse, or J.J. Hill. At least they created steel mills, oil refineries, electrical equipment plants and rail lines, the infrastructure of prosperity. But Twitter? At the end of every day, is there any legacy value in anything that resides within the Twitter ether? If Twitter didn’t exist, would you miss it? Along those same lines, how did Twitter make most of its money? It’s not like people paid fees for the narcissistic opportunity to demonstrate brevity and wit a la Twitter, let alone for the right to insult each other within the 280-character allowance. Heck, Musk has floated the novel idea of charging prime users the grand sum of $8 per month to use the service, and people screamed like stuck pigs. The answer is that pre-Musk, Twitter made its money via ads from a stable of sponsors; and as Musk is now learning, that stream can run dry in a hurry. Which brings us to others in the “tech” space, most of them familiar names. Consider two of the largest, Meta (formerly known as Facebook) and Alphabet (the parent company of Google). They make their bucks via ad revenue, by popping up annoying distractors tailored to user data that they gather from you whenever you click a link or hit the “like” button or such. Heck, they brag that they know you better than you might know yourself. Now, keep in mind that there’s only so much ad revenue to go around. And in the olden days, companies that wanted to sell wares spent much of their ad revenue in old-fashioned info-systems like newspapers and magazines. But over the past decade or so, much of that spending has migrated online and away from the paper products. That spending migration is a big part of why you may not have a local newspaper anymore; that is, it went out of business. Or it helps to explain why what remains of your local newspaper, if you have one, fills much of its space with reprinted news feed from big media shill mills like Associated Press, Reuters or such. The ad money of old no longer funds the downtown newspaper, but instead stuffs the coffers of those soulless California tech behemoths. While far fewer traditional, shoe-leather reporters are out covering school board meetings or reporting from criminal court or the county council meetings. Meanwhile, for the past decade the stock market has been driven by tech-tech-tech. People everywhere talked about alleged “wealth creation” and how well their future retirement accounts were doing because the share price for Facebook, Alphabet, etc. went up-up-up. Here’s the chart of just those two mega-names: [IMAGE 1] As you can see, both Facebook (pre-name change) and Alphabet were market darlings, climbing inexorably until this year. And then, whoops… came the sell-down in 2022. What’s with that? Well, much of the past 10 years has been a time of low-low-low interest rates, too. Down at zero for much of the time, and definitely negative yields when you factor inflation. And when the Federal Reserve began raising interest rates earlier this year, the air left the balloons. Indeed, at one point pre-2022, Facebook sported a market cap over $1 trillion (yes, with a “t”). Now, the company’s market cap is under $300 billion (with a “b”), or about the same as the combined values of oil companies Shell and BP put together. And let’s ponder that for a moment… [Over 62 And Collect Social Security? Take Action Immediately!]( [Click here for more...]( If you’re over the age of 62 and currently collect Social Security, you need to prepare now. Because Biden has given our country the worst inflation in decades – and many warn things will only get worse from here. Worse yet, the Social Security check you receive now may not keep pace with inflation… Which is why, if you don’t act now, you could fall behind in the months ahead. Is your retirement at immediate risk? [Click Here To Find Out]( If Meta disappeared in a puff of smoke, would it really matter? Would your life change all that much, aside from the cute-kitty/puppy posts and such? Whereas, what would happen to global energy markets and gasoline prices at the filling station down the street if BP and Shell just simply vanished? Well, that question kind of answers itself. Meanwhile, what does the loss of over $700 billion in Meta’s market cap look like? Let’s do some more math. To lose $700 billion of market cap in a year means Meta lost an average of $1.917 billion per day… $79.908 million per hour… $1.332 million per minute… or nearly $22,000 per second. Does this seem to you like the dynamic of a real company that makes and sells real things? One that creates true value for its customers? Or could it possibly be the case that there was just never all that much true value in the original Facebook concept? Or that the idea of a trillion-dollar market cap based on ad revenues diverted from newspapers and redirected at the Facebook crowd was just never all that great an idea? And it’s all coming home now. Twitter is in the hands of Herr Musk, who is trying to figure out how to keep the lights on. Meta has cratered this year. Alphabet has taken a dive as well. And many more tech plays are sliding down the slippery slope. Here is an abbreviated list of job cuts across the name-brand tech sector: - Twitter cut over 50% of its workforce (see above, with estimated 3,700 jobs; more to come). - Facebook ($META): cutting 13% of its staff (11,000 jobs), its largest round of layoffs ever. - Snap ($SNAP): cutting 20% of its workforce (1,200 jobs). - Shopify ($SHOP): cutting 10% of its workforce (1,000 jobs). - Netflix ($NFLX): cut 450 jobs in two rounds of layoffs. - Microsoft ($MSFT): cutting <1% of workforce (1,000 jobs). - Salesforce ($CRM): cutting 1,000 jobs. - Robinhood ($HOOD): cutting 31% of its workforce. - Tesla ($TSLA): cutting 10% of its salaried workforce. - Lyft ($LYFT): cutting 13% of its workforce (700 jobs). - Redfin ($RDFN): cutting 13% of its workforce. - Coinbase ($COIN): cutting 18% of its workforce (1,100 jobs). - Stripe cutting 14% of its workforce (1,000 jobs). In addition to these, Amazon has announced a hiring freeze, Apple has paused almost all hiring, and Alphabet is reducing new hiring by 50%. You get the picture, right? The salad days of tech-tech-tech are ending. Part of it is rising rates and the Fed dialing back its past support of upward-trending markets. And part of it appears to be a collective realization that much of that Silicon Valley tech vaporware just isn’t very good, nor worth very much in the long haul. So out in the markets people are bailing, and looking for other shiny things in which to invest. This brings us to hard assets. I’ll keep it terse here and just lump everything into traditional ideas like energy and mining. Oil, gas, even coal. Gold and silver as precious metals. And copper, lead, zinc and a host of other metals that truly make the world work (just try running the world without them). The takeaway is that the era of tech hype is ending. Reality has caught up with the smoke and mirrors. As 2022 ends, it’s time to get real and get into hard assets, because that’s where the world is headed. It’s what will be valuable and retain value in the world that’s unfolding before us. Regards, Byron King for The Daily Reckoning Editor’s note: Governments around the world and large institutional investors are stocking up on gold. In fact, central banks have recently been buying gold at the fastest rate since the 1960s! That’s why we recommend that you get your hands on some gold NOW if you haven’t already. When the panic hits, demand will explode and supplies will vanish. And we recommend the [Hard Assets Alliance]( for your precious metals. We love the Hard Assets Alliance so much, we entered into a partnership with them several years ago. Hard Assets Alliance allows you to buy and take delivery with exceptionally low costs. Or with a single click, you can buy and store your metal in your choice of five audited vaults worldwide. It’s the hands-down easiest way to get started with gold. [It’s FREE to sign up for an account.]( Once you’ve completed the short account opening process, you’ll be able to shop for the type of gold bars and coins you want to buy right away. [Go here now to create your FREE account.]( Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:feedback@dailyreckoning.com) [Byron King] [Byron King]( is Senior Geologist at Rickards' Gold Speculator. He is a Harvard-trained geologist who has traveled to every U.S. state and territory and six of the seven continents. He has been interviewed by dozens of major print and broadcast media outlets including The Financial Times, The Guardian, The Washington Post, MSN Money, MarketWatch, Fox Business News, and PBS Newshour. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2022 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. 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