Two ends of the spectrum

Happy Friday!

I hate writing about looming government decisions that don’t follow set deadlines because it’s a lot of work to put these pieces together. Policymakers always seem to squash whatever subject I write about like 5 minutes before I click “send.”

Which is precisely what happened this week. I tackled the debt ceiling, which appears to be over (for now), but I’d still suggest sending this out. Not only because I put a lot of time into it but also because this drama could emerge again in a few weeks.

Ok let’s get started…

Elon Musk is moving Tesla’s headquarters from California to Texas, which is fantastic. Cathie Wood also announced that her investment company is moving to Clearwater, FL. Their reasoning is the same. Musk apparently hates California as much as I do (he even called the state “fascist” last year in an earnings call), and Wood is moving for taxes, etc.

I bring this up not to beat a dead horse but to highlight an idea I had maybe 5 years ago. I thought it would be a lot of fun to start an activist fund that targeted companies in high-tax regimes that didn’t need to be there and force them to move to low-tax regimes.

Think about it. Activists usually push for management change, revenue optimization, cost cutting, etc. But these can take several years just to gain momentum. Changing a tax rate can happen in months, and think about the impact on margins. 

Aside from the potential financial gains from such a strategy, it would be a lot of fun to step on the throats of executives and boards who continue to operate in NYC or CA that don’t need to be there. And the cherry on top would be screwing over these states that refuse to change their tax laws.

I’m still strongly considering doing this fund one day, so if you want to get in early, just let me know. I may even offer a discount on fees for early investors!

Moving on…

Let’s highlight two stories at the opposite end of the investigative journalist spectrum. The first is from the WSJ and their Facebook Files that fueled an even bigger story involving the former employee who took the files and is now sort of famous.

This story got a lot of attention, presumably because the team at the WSJ has a long history of causing big problems for companies like Theranos and Valeant. I guess some expect the same for Facebook. 

But I don’t see how they get dinged for any of this. I’m no lawyer, but a smoking gun doesn’t seem to exist. Nor does it point to monopolistic powers being exerted to hurt consumers. So, most of this will just be a gnat flying around Zuckerberg’s face for a few weeks (he lost like $6 billion in a few hours on Monday).

That being said, this story appears to be forcing change inside Facebook. So, maybe the informant is getting what she has told the world she wanted all along: to Make Facebook Great Again.

Now let’s take a trip to the other end of the spectrum…

Imagine building a team of investigative journalists across the globe and spending two years sifting through 3TB of data – looking for ways to expose the lives of rich people and how they really do play by different rules blah blah blah…

Then imagine how this consortium must feel when roughly 12 minutes after the story breaks, the entire world changed the channel back to the Kardashians.

Imagine no more because that happened this week with the Pandora Papers. Can’t imagine what the International Consortium of Investigative Journalists must feel like right now. All that time and energy to expose mostly legal strategies of protecting wealth, and the result?

Nobody cares. People didn’t care after the release of the Panama Papers in 2016 or a year later with the Paradise Papers in 2017, and clearly, not much has changed since then. I even did a Google Trends analysis on “pandora papers,” and this is what came back:

People searched for it on Monday, presumably during a commercial break, and that was about it. The regional breakdown is priceless too. Seems like most of the interest came from Alaska. 


Here’s a great chart I came across this week via The Daily Shot:

Speaking of Facebook, some may point to social media as the root cause of this chart. But I wager there’s another far more plausible reason – the quality of people continues to precipitously decline.

Enjoy the weekend…