From Elon Musk's Tesla Inc. to Reed Hastings Netflix Inc. tech firms led by their founder have beaten the broader market by a huge margin. Twitter Inc. has always been an outlier.
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Monday s news that Jack Dorsey is stepping down as CEO of the social media company comes after the stock rose just 63% during the co-founder's six-year tenure. After a souring run in stock markets, Twitter has appointed Parag Agrawal, formerly the chief technology officer.
Jack Dorsey hasn't been the faithful type as he was pointing out his other CEO role at Square Inc, AJ Bell analyst Danni Hewson, while his last tweet before his resignation declared his love for the platform. There were a lot of investors who were wondering whether it would be better served by a new master. It has one and one that knows the ropes. Square has performed better than Twitter in recent years, more than tripled in 2020 alone. Twitter didn't hold up with the broad rally in the indices, losing the 280% rally for the Nasdaq 100 and 134% gain in the S&P 500 in that time. Square's gains are more typical of a founder-led company.
While the likes of Mark Zuckerberg, Bill Gates, Steve Jobs and Jensen Huang were all focused solely on one thing - running the company they started - Dorsey had fingers in more than one pie, said Jim Dixon, equity sales trader at Mirabaud Securities.
An exchange-traded fund founder-led firms has risen 134% since its inception in February 2017, outstripping a 99% advance for the S&P 500 Index. Square is the fund's third-best performer in that time, with a gain of more than 2,200%.
Other CEOs, while they may do a good job, aren't emotionally married to a company the way a founder is, said Mirabaud s Dixon.
Trade Desk Inc. owner of a platform for buying digital advertisements run by Jeff Green is the biggest gainer on the Global X Founder Run CompaniesETF after its shares soared more than 30 fold. Since the fund's inception in 2017, the winners include the cybersecurity company Zscaler Inc. and the car-retailer Carvana Inc.
Over the same time, Tesla, run by Musk, who is also the CEO of Space Exploration Technologies Corp., has jumped more than 2,400%. The sale of shares on a secondary market last month hit SpaceX with a valuation of $100 billion.
Expensive software stocks have been hit hard in the past two weeks due to rising U.S. Treasury yields and a hedge fund exodus. A Goldman Sachs Group Inc. basket of software companies with an enterprise value exceeding eight times sales has fallen 10% from a Nov. 16 record.
Salesforce.com, with an enterprise value about 13 times trailing revenue, will be able to justify its valuation when it reports earnings on Tuesday along with several other software companies later this week. The maker of customer management software is expected to show strong revenue growth as businesses continue to prioritize spending on cloud-based services.
On Wednesday, the earnings of Salesforce will be followed by cloud-computing company Snowflake Inc. and Okta Inc. and Asana Inc. and DocuSign Inc. on Thursday.
None of the Japanese recording equipment maker, Zoom Corp., has sued the U.S. video conferencing giant of the same name to protect its trademark.
None of Twitter became the latest Silicon Valley titan to appoint an Indian-born CEO, joining the likes of Microsoft and Google.
A new blow to Didi Global Inc. was dealt by none of China's most comprehensive set of guidelines for the ride-hailing industry.
After releasing The Beatles: Get Back None Shares of Chinese semiconductor firms such as TongFu Microelectronics Co., Disney saw the biggest increase in video streaming last week, recording a 7.1% jump in users.
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