Regulation in the tech industry has been a hot topic during the last six months. But as the European Union and the American government scramble to regulate the online space, concerns about how far it will go are increasing. According to some, regulation will be good for the big and devastating for the small.
Some people believe federal regulation will hurt the industry drastically while a recent study claims that it could be beneficial, at least for the leaders.
Over the past year, tech stocks have been dominating the market with the FAANG stocks being responsible for most of the total growth on American exchanges. As these tech giant’s influence increases, the need for regulation follows. According to recent data, more regulation could be great for these giants and devastating to smaller companies.
The analytic firm, Nomura Instinet, published a report on Tuesday where they discuss the potential results of stricter regulation.
Who Will Be Affected By Regulation?
According to Nomura Instinet, we will see major changes in the market space within the next year due to tighter regulation. Analyst Mark Kelley claims that Facebook (FB) and Google’s parent company Alphabet (GOOGL) will benefit the most from new regulation since it will demolish a lot of their competitors. You see, large companies like Facebook can afford to adapt after new regulation, while a smaller business might end up being forced out of business due to increased operative costs.
However, Nomura Instinet does not think that all tech giants have a strong projection and on Tuesday they also downgraded Twitter (TWTR) on the notion that the stock is highly overvalued. In a statement, the analytic firm announced that they are expecting to see Twitter shares drop by 30 percent in the coming year.