With 2020 over, I decided to look at the regional geographic distribution of North America's "mega" cap corporations ($50b+ market capitalization) by headquarters.
Here's the graphic I made laying that out: https://i.imgur.com/6vVxFCh.jpg
North America has 152 mega cap companies, 145 in the United States and 7 in Canada. Mexico has 2 companies right on the cusp (Walmex at $49b and America Movil at $49b), but misses the cusp. Maybe next year.
These 152 companies have a market cap of $27.06 trillion. 97.7% is in the USA. 2.3% is in Canada.
To be clear, these companies are grouped based on the location of their headquarters, aka where high-level executive decisions are made (where CEO/President/Chairman/Board/executive management generally resides). Of course, these companies have multinational operations and their workforce is spread throughout.
Some thoughts:
- The U.S. gained $5.586 trillion in mega cap market value in the past year. Canada gained $97 billion. North America gained $5.683 trillion total.
- The West Coast had a banner year due to COVID pandemic and general inertia. With 56.6 million people (of North America's 580 million, or 9.8%) it is now home to 46 companies who combined have 52.4% of North America's mega cap market value. Last year, these 145 companies had a market cap of $21.4 trillion, and the West Coast had 42.4% of the share. So the West Coast captured 10% of the mega cap "market share" in one year.
- Mega cap market value increased by 26.79% in the United States and 18.34% in Canada. In both cases, the increase was due to tech growth. In Canada, Shopify's growth alone makes up nearly the entirety of Canada's growth. Shopify went from not being mega cap ($46b) on January 1, 2020, to having a market cap of $137 billion a year later, or 198% growth. If you exclude Shopify from Canada's listing, Canada's mega cap only grew by 1.24%, showing how countries without competitive tech industries will fall behind in the coming decade. If Shopify can continue to grow in the coming years, it will do wonders to shift Canada's mega cap value away from dying (energy) and stagnant (finance) industries.
- The same tech shift was noticeable throughout the U.S. The West Coast's mega cap market value increased by a whopping 52.9% from $9.067 trillion to $13.863 trillion. Tesla alone added $593 billion of market capitalization, or nearly the entire mega cap value of Canada. The rest of the U.S. had mixed growth. The Great Lakes and Southeast had 12.75% market cap growth and 12.80% market cap growth, respectively. The Northeast, heavy on traditional industries and finance, only grew by 4.56%. The Southwest declined by 5.32% due to the oil shock and Exxon's market cap collapse.
- Of the 7 North American companies among the Top 10 globally, we have the following growth:
- Alphabet: +$264 billion market cap growth
- Amazon: +$714 billion market cap growth
- Apple: +$968 billion market cap growth
- Berkshire Hathaway (the only non-tech): -$8 billion market cap growth
- Facebook: +$193 billion market cap growth
- Microsoft: +$482 billion market cap growth
- Tesla: +$593 billion market cap growth
- TOTAL: +$3.206 trillion
- As the numbers above show, the 7 companies above grew by $3.206 trillion. So these 7 alone account for 57.4% of the U.S. gain, and 56.4% of North America's. They also account for 67% of the West Coast increase just due to sheer size, even if smaller tech companies had much better percentage growth rates than all but Tesla.
- Two companies IPOd straight into mega cap territory: Airbnb and Snowflake. Both are seriously overvalued and I can't imagine them sustaining those levels.
- If 2021 is a year of recovery, I could also see a correction, with money being pulled from the safety of big tech back into traditional industries. So next year's snapshot might be far less imbalanced than the +53% West Coast, +5% Northeast dynamic we had this year.
- HQ relocations are a big question mark. This year alone, Charles Schwab and Oracle moved their HQs to Texas (though the former's isn't final final until January 21). If Paypal or Tesla move to Texas in 2021, the West Coast dominance could be reduced even further.
Any other thoughts?
Submitted January 03, 2021 at 02:18AM by ReyesA1991 https://ift.tt/2LjPPHN
