Tesla shares had a huge rise this year, but the stock is volatile.
Credit…Aly Song/Reuters

On Monday, Tesla became the largest company ever added to the S&P 500, with a market capitalization of $650 billion. The company’s stock, up some 700 percent in 2020, started off Monday 4 percent lower in premarket trading.

Companies worth a fraction of Tesla would have been included in the index long ago, but the approach that has made it such a valuable company has brought challenges.

Despite all its technological innovations, Elon Musk’s celebrity billionaire aura and a high-risk, high-reward approach to business, Tesla for the longest time was unable to meet the most humdrum requirement of corporate America: turning a profit. Criteria for inclusion require the sum of the company’s fully audited profits in the four most recent quarters to be positive. Tesla hit that mark only this year.

With a market capitalization of $650 billion, the sudden weight Tesla will throw into the market could have strange consequences.

“This is by far the biggest index inclusion that they’ve ever attempted,” said Steve Sosnick, chief strategist at Interactive Brokers in Greenwich, Conn. “The stock will immediately be a top 10 name in the S&P, which is nuts.”

Chris Mack, a stock portfolio manager at the investment adviser Harding Loevner in Bridgewater, N.J., has plenty of good things to say about Tesla as an innovative company. But he doesn’t own the shares in his funds, which is focused on buying large cap technology companies that have a proven track record of profitability, making them suitable for long-term holdings.

But many investors won’t actually have a choice about buying Tesla’s shares.

The S&P 500 is one of the most widely followed barometers of the American stock market, serving as the benchmark against which investors measure more than $11 trillion worth of investments. Of that, more than $4.5 trillion are in index funds that mirror the stocks in the S&P.

Those funds have been buying up shares of Tesla since mid-November in preparation for Tesla’s admission to the S&P 500, which has sent its shares up more than 60 percent since the announcement that the company would be included.

Dina Srinivasan’s research into Google and Facebook is at the heart of a wave of antitrust lawsuits against Big Tech.
Credit…Gabriela Hasbun for The New York Times

A former tech industry insider is now playing a key role in the wave of antitrust lawsuits against the giant tech companies.

Dina Srinivasan, who once worked as a digital advertising executive at WPP, the world’s largest advertising agency, quit her job three years ago after becoming disillusioned by the immense power large wielded by companies like Facebook and Google, Daisuke Wakabayashi reports in The New York Times.

“It just felt like, OK, Facebook and Google were going to win and everybody else is going to lose and that’s just the way the cards were stacked,” Ms. Srinivasan said. “I don’t think this was widely understood.”

She took up the case against them instead, writing academic papers with an insider’s perspective that reframed the antitrust thinking about the companies. And her timing was perfect.

Federal regulators and state attorneys general had expressed growing unease about Big Tech’s unchecked power. But many had struggled with how to bring a case because of the complexity of the companies and the markets they competed in. Arguing that these companies were harming consumers was also difficult because many of their products are free.

“Her papers are just very clearly on point about the actual conduct of the platforms and its competitive significance,” Marshall Steinbaum, an assistant professor at the University of Utah’s economics department, wrote on Twitter. “They’re helpful to enforcers and come from a perspective of someone who obviously knows the industry and the facts.”

In recent months, mounting concerns about the outsize influence of tech’s most powerful companies have set off a cascade of antitrust lawsuits, with three cases targeting Google and two suits against Facebook.

As the legal arguments take shape, there is evidence of Ms. Srinivasan’s fingerprints.

Cyberpunk 2077, an immersive role-playing game from CD Projekt Red, was released in December after nearly a decade of hype. Here, fans gather at the Tokyo Game Show in 2019.
Credit…Franck Robichon/EPA, via Shutterstock

Since the release of the highly anticipated Cyberpunk 2077 video game on Dec. 10, thousands of gamers have created viral videos featuring a multitude of glitches and bugs — many hilarious — that mar the game and render it virtually unplayable for many users.

So many gamers demanded refunds from distributors last week that they overwhelmed Sony’s customer service representatives and even briefly took down one of its corporate sites. In response, Sony and Microsoft said they would offer full refunds to anyone who bought Cyberpunk 2077 through their online stores; Sony even removed the title, Mike Isaac and Kellen Browning report in The New York Times.

Cyberpunk’s rollout is one of the most visible disasters in the history of video games — a high-profile flameout during the holiday shopping season by a studio widely considered an industry darling. It shows the pitfalls gaming studios can face when building so-called Triple-A games, titles backed by years of development and hundreds of millions of dollars.

“There was so much there, but they just didn’t pay attention to the details,” said Billy Marte, a gamer who bought into the high expectations around Cyberpunk, which was developed by the Polish studio CD Projekt Red. “It’s evident that this game was rushed.”

CD Projekt Red’s stock has dropped 41 percent since early December. Inside the studio, there has been infighting and finger-pointing. In a contentious meeting with board members on Thursday, CD Projekt Red employees pressed executives on the game’s unrealistic deadlines and false promises.

Insiders said they saw the problems coming for months, based on CD Projekt Red’s history of game development and warning signs that Cyberpunk 2077 might not live up to its sky-high expectations.





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