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Are MEGACORPS The Next Big Thing??

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MegaCorp

We are entering a new age of business. It is in its infancy currently, but if the trend continues we are going to see a lot of news about mergers down the years. Recently, DOJ in the USA filed an anti-trust lawsuit against the merger of AT&T and Time Warner. Scrutiny against this merger has been growing and with good reason. AT&T is, among many things, a content distributor. Whereas, Time Warner is a content creator. Criticism has centered around the large control AT&T will have on the content that world population consumes, choking innovation in video and distribution technology, and rise in prices of Time Warner’s properties such as HBO, Warner Bros. etc.

Above example was of the vertical merger, when two companies which are not directly in competition merge together. They are usually seen as good for the market and governments usually don’t oppose this as two companies which were not in direct competition can use their resources together to challenge the giants of the market. There’s a catch though – they can be harmful to competition if either of them is dominating firm in the market, or the market is not competitive, to begin with (for example, markets with huge entry barriers).

Horizontal mergers are when two companies in direct competition merge. The problem is obvious – fewer options for the consumer, rise in prices (though initially, prices fall as firms indulge in predatory pricing but soon winner emerges and can set the price as they desire), and slowing down of technological innovation. Horizontal mergers are almost always met with a lot of criticism and scrutiny but they do happen often enough for us to worry. Recent examples include Facebook acquiring Instagram and WhatsApp, Disney acquiring FOX etc.

The new and alarming trend is for companies to indulge in both. In this new era, horizontal mergers are commonplace. Companies acquire competitors, narrowing the choices for consumers, eventually resulting in monopolies or duopolies. The result is a market that initially was competitive but now has just one or two firms. This is where vertical mergers become a problem. In an uncompetitive market, vertical mergers give rise to megacorps which are massive conglomerate having control over multiple markets exhibiting both horizontal and vertical monopoly.

Firms like Facebook, Google, and Amazon also raise concerns about fair competition. They enjoy legal exemption. Google and Facebook are not responsible for what users do on them, unlike a publisher. In some cases, these firms don’t compete in a marketplace but are a marketplace themselves providing infrastructure for digital economy to function.

Amazon is the closest thing we have to megacorp today (but still far from what a megacorp can be). With its business tentacles involved in E-commerce, financial services, cloud services, transportation and logistics, publishing, clothing, hardware, media production etc., it is a giant of behemoth proportions. It is a retailer and a marketplace. Users do seem to love it today with its seamless integration of different areas in which it conducts its business, but what happens when we become completely dependent on it? In best case scenario, it’s lack of options across the board (a megacorp dominates across nearly all sectors of business), rising prices and slow technology change because of lack of competition. At its worst, we might have another company on scale of VOC; one which interferes with government agenda through lobbying, power to propagate and change views and set agendas, a company as large as GDP of a medium sized country in control of a commodity/service that, in all sense of the word, can be called utility.

If you are thinking that worst case scenario is not possible then you are not thinking on the right scale. As I said, we are at the infancy of this new era of megacorps. It is a story that is just starting. Pure capitalism (unchecked, unregulated) will always result in a monopoly. I might sound anti-capitalist but bear with me for a moment and you will realize I am a supporter of checked and regulated Capitalism. Companies start with horizontal mergers. Why fight your competition when you can buy it? This soon results in monopolies (remember, we are talking about unchecked and unregulated capitalism here). As companies remain the only one in the market, it makes sense to bring the companies they depend on under their Umbrella. Why depend on quality and limitations of smaller companies when you can buy them and control everything in-house? Vertical mergers become possible only when the company has grown up to the point where they can afford to enter a different marketplace in the same sector. It started with Ford when they entered steel business to always ensure a steady supply of their car manufacturing plants. Integrating backward to the point of origin of your business gives you complete control over the sector. Pure capitalism leads to the death of principal on which capitalism survives: Competition.

Fear of emergence of megacorps is fuelled more by the high entry barriers that exist in nearly every sector now. Data Science, machine learning, and AI are the next big thing. Any firm that master these first is bound to emerge victorious in this race of megacorps. All of these fields depend upon one main thing; large enough data set. Your algorithm is going to be more accurate if it has more data to work with. Data is one thing that a new company does not have. Google, Facebook and, Amazon etc. among them have a large and extensive enough data set to accurately profile a lot of population. Apart from this, there is an economical barrier too. Every field has advanced so much that further advancement and research comes at a hefty price. This leaves a situation where the only handful of well-established billion-dollar corporations are able to invest in the next era of technological revolution.

Usually, problems such as this can be solved by regulations, price control, profit cap etc. but how do you regulate prices when the service being offered is free. We neither pay for Google nor Facebook. Breakups will have more harmful effect as it will cripple the economies of scale of these platforms, worsening the service it offers. It will also choke innovation as companies will scramble to put together resources for R&D. One solution is to look more deeply into mergers and scrutinizing whether they will neutralize a long-term threat even though company being bought is small currently. Google buying Waze and Facebook acquiring Instagram would have been stopped if regulators had an accurate measure of competition.

Next is the sharing of data hoarded by these companies. Our data is the currency by which we buy these services. New laws regarding sharing and ownership of data should be drafted giving individuals solid rights. If a user desires, key data can be made available to other firms that might benefit from it. Regulators can make giants share anonymized bulk data so that other budding companies can make use of them and reach maturity instead of being eaten by one of the giants. These steps will turn data into something that giants hoard with the intention of suppressing competition into something that users can share to stimulate innovation. After all, if the service being offered has become more of a utility, it should be regulated like one. Anyone who disagrees with Google being a utility should try having a start-up without listing it on Google.

Megacorps used to be something only found in sci-fiction novels and movies. Most of them are usually shown evil like LexCorp in DC comics or Tyrel Corporation in Blade Runner. They might also take the form of BnL from Wall-E, not inherently evil, but one which governs and serve the major part of Earth. Whatever it may be, currently we are on the path to a cyberpunk future. It is hard to imagine where corporations have become as big and strong as nations but perhaps a look back in the history of VOC and East India Company can make it more imaginable.

India

Ram Mandir Opening For “Darshan” In 2023

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Ram Mandir Opening 2023 | News Aur Chai

The Ram Mandir in Ayodhya is expected to allow visitors by December 2023, with the completion of construction only in 2025.

Sources in the Shri Ram Janmabhoomi Teerth Kshetra have revealed that the colossal project of building the Ram Mandir in Ayodhya, Uttar Pradesh, will be opening for devotees towards the end of 2023. In contrast, the project’s entire construction completion is expected towards the end of 2025. The sanctum sanctorum (Garbha Griha), along with the mandir’s first floor, will be ready by December 2023. Devotees will be allowed to visit the long-awaited mandir soon after the construction is completed.

An ANI report said, “The grand Ram Mandir being constructed in Ayodhya will be opened for devotees from December 2023. Sources told ANI that Garbhagriha, all five mandaps and the first floor will be ready by December 2023 and the mandir will be opened for devotees”.

The sanctum sanctorum will be as high as 161 feet and built using Rajasthani marble and stones. Engineers and architects are taking all measures to ensure the longevity of this enormous project. The second stage of construction is expected to begin in December this year. Currently, the structure is at a standstill as a result of monsoons. Another reason for the delay is the coronavirus pandemic that depleted the force with which the mandir’s construction was expected to go on.

The announcement of the mandir being opened to visitors in 2023 has brought up questions about the political agenda. It is believed that the Bharatiya Janata Party (BJP) aims to use the mandir to catapult themselves into a position of advantage during the 2024 Lok Sabha elections. Opening the mandir to devotees in December 2023 will give the BJP an easy 6-month gap to the general elections in 2024.

The opening of the long-awaited Ram Mandir in Ayodhya could be the factor that diverts the public, at least the Hindu’s in favour of BJP. Thus, securing them a vote bank based on religious sentiments upheld by the party in their previous tenure as the ruling party.

The Ram Janmabhoomi Mandir will be 360 feet long, 235 feet wide, and 20 feet high mandir will be completely ready by the end of 2025. The project will include amenities and structures like museums, archives, research centre, Sant Niwas, gau and Yagya shala, Etc. The main attraction is the Ram Mandir.

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Business

How SEBI’s New Margin Rule Is Affecting Retail Traders?

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SEBI Margin Rule | News Aur Chai

Securities and Exchange Board of India has introduced new margin rules for traders. Traders and Brokers are not happy with the new regulations because they will have to invest a large amount of cash in fulfilling margin requirements for trade.

SEBI had introduced the new margin rule in the year 2020 for intraday traders. It is being implemented in a phased manner. Traders were supposed to maintain 25 per cent of the peak margin in the first phase; the margin was raised by 50 per cent in the second phase. In the third phase, as per the new margin rule, intraday traders will have to pay a 100 per cent upfront margin. According to new norms, the margin requirements will be calculated four times during every trading session because the money margin must be greater than the need.

As per the new rule, brokers must collect margin from investors for any purchase or sale, and if they fail to do so, they will have to pay the penalty. Thus, brokers will not receive power of attorney. Brokers cannot use power of attorney for pledging anymore.

Those investors who want to make use of margin will have to create margin pledges separately. As per the new rule, investors will have to pay at least a 30 per cent margin upfront to avail a margin loan. Shares brought today cannot be sold tomorrow. Funds from shares sold today cannot be used for new trades on the same day.

The market experts said that there must be proper adjustments for implementing new rules, or it may create chaos, trouble and disturbance to the market participants. The CEO and founder of Zerodha broking firm, Nithin Kamath tweeted that, “the day when the new rules came into effect was the dreaded day for brokers, exchanges, intraday traders”.

Traders Are Not Happy:

Changes in rules have evoked strong reactions from traders because they will have to invest a large amount of cash in fulfilling margin requirements for trades as per new margin rules. Even the trading in futures and options will become more expensive. Traders are disappointed because they will have to pay up more money to bet in stock markets. As per new margin rules, Traders are also liable for the penalty if the rules are not followed during the trading session. If a trader wants to buy Nifty worth Rs 10 lakh, he will have to pay a 20 per cent margin of around 2 lakh. If the margin of the trader does not meet the need, he will be penalized. Traders will have to pay the minimum amount for opening the Multilateral Trading facility account, and they have to maintain a minor balance at all times.

Why Gas SEBI Introduced A New Margin Rule?

SEBI has introduced new rules to protect retail investors from purchasing difficulty. The intended goal of SEBI behind new margin rules is to bring down the difficult market situation and avoid huge fluctuation in stock markets during extreme stress. The new margin rules are likely to bring transparency to the market; it is expected to strengthen the market’s safety.

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Hollywood

Keanu Reeves Returns with “The Matrix Resurrection”

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Matrix Resurrections 2021 | News Aur Chai

The expectation of the unexpected fourth instalment of The Matrix Resurrections in the sci-fi establishment has started with another banner prodding the arrival of its first trailer.

The film Matrix 4 comes out 18-years after The Matrix Revolutions. It is planning to be the last film in a trilogy reporting the transformation of Computer programmer Thomas Anderson into cybercriminal Neo. As he finds the conventional world, he occupies a recreated reality.

Loosening up the expectation, with a special promotional. It highlights red and blue pills sit next to each other underneath the clear message: ‘The Choice is yours.’ Fans of the famous establishment will perceive the pills as a definitive choice given to Neo, played by Keanu Reeves, as he picks between life in the conflict assaulted real world or the ‘beautiful prison’ of a substitute reality. Penetrating static fills in as the scenery, as small strings of Matrix code has seen falling inside the pills before the whole scene liquefies.

Fans can proceed with their adventure on WhatIsTheMatrix.com, an intelligent pick your-own-experience style site. Given a similar decision there, red brings you down a rabbit hole where you’re told: ‘This is the moment for you to show us what’s real.’ Then scenes from the film teaser, showing the slight hindrance between the natural world and the fake world known as The Matrix. One of the Best Scenes is Reeves’ Neo gulping a blue pill while a lot more seasoned, a balder man shows up in his appearance.

The scenes reviewed rely upon which pill selection and each emphasis on the decision made. The Red Pill requests that the watcher go further into the reality behind the Matrix. While the Blue Pill cautions them to avoid it again so as not to agitate the norm and welcome undesirable risk.

Still, the viewer’s decision makes, in any case, every secret seems to end with a brief look at Keanu Reeves as Neo, with different eyes. He either collaborates with characters who could be his partners in the film or plans to fight against its expected scalawags, be they Agents, pernicious projects, or even people.

The person who clicks on the blue pill will hear Harris’s voiceover saying: “You’ve lost your capacity to discern reality from fiction.” Before encouraging the viewer to embrace that their situation is genuine. At the current time, streaks on the screen, and Harris peruses it, saying, “anything else is your mind playing tricks on you.” By contrast, ones’ who click on the red pill hear Abdul-Mateen’s voice revealing to them that while they trust it’s the current time — once more. With Abdul-Mateen perusing the time out loud — “that couldn’t be further from the truth.” Regardless, a progression of quick-cut shots from “Revivals” streaks on the screen during the two situations. As each time a viewer taps on a pill, the recording changes.

‘This could be this is the first day of the rest of your life, but if you want it, you gotta fight for it.’ The portrayal wraps while showing star Keanu Reeves prepared to battle. Then, at that point, finishing on a vile note, they show somebody contacting the PC port at the rear of their head and inquire: ‘We don’t want anyone to get hurt, do we?’

From visionary movie producer Lana Wachowski. The new film reunites unique stars Keanu Reeves and Carrie-Anne Moss as Neo and Trinity, the infamous roles they made well known.’ The first Matrix film in 1999 met with much essential acclaim upon its introduction. The element is following up by two other movies, which were both delivered in 2003. Warner Bros. uncovered the title for the fourth Matrix film during its CinemaCon board. The Matrix Resurrections will release on December 22, 2021.

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