June 23 (Reuters Breakingviews) – If Mark Zuckerberg and Elon Musk go ahead with their bizarre plan to fight in a cage, forecasters believe jiujitsu fans will beat Zuckerberg.
But what if Meta Platforms (META.O) and Tesla (TSLA.O), the companies they run, became embroiled in a doctrinal dispute? Musk’s company will likely come out on top.
Tesla’s advantage starts at the weigh-in. The electric-vehicle maker’s market capitalization of nearly $800 billion is ahead of Zuckerberg’s social network by nearly $100 billion. And while Meta is bigger in terms of revenue, Tesla is growing faster.
Analysts polled by Refinitiv expect the two companies’ top lines to be roughly identical by 2025. And in terms of investment, Musk has been outdone. A dollar invested in the company known since Facebook’s stock-market debut in 2012 is now worth $7.45. That same dollar invested in Tesla at the same time is now worth $144.
As finance progresses, the meta becomes more powerful. At last count, the company had $37 billion in cash and marketable securities. Tesla’s own dollar reserves are growing, but Zuckerberg is far ahead, having generated $116 billion of cumulative free cash flow over the past five years and sending $96 billion of that to shareholders through buybacks.
That’s a target. However, then comes the system where both the companies prevail. Zuckerberg holds super-voting shares in Meta, which means there isn’t much that shareholders can do if he squanders his resources. Their foray into building the virtual-reality “metaverse” led to operating losses of nearly $14 billion last year.
Shareholders complained, but they have few other options. Musk also has shareholders, but for different reasons. He only owns a 13% stake in his company, but Tesla’s board is full of allies and corporate bylaws make change difficult. The difference: Shareholders seem mostly cool about this, and repeated controversies haven’t done much to unseat him.
Decisive is not heavy but strategy. Tesla and Meta are both trying to reshape the world. But Meta’s virtual-reality aspirations face stiff competition from even bigger companies like Apple. Its Facebook platform is under threat from upstart TikTok, and Zuckerberg’s innovations are being hindered by regulators who fear the company’s dominance.
Meanwhile, Tesla is changing the physical world. Its vehicle-charging network could become a key part of the backbone of America’s infrastructure, and its battery-production operations could power not only cars but the electric grid as well. Governments want what Musk is selling; This is not so true for Zuckerberg. That game changer tilts the balance in Tesla’s favor regardless of who dominates the cage.
Tesla Chief Executive Elon Musk tweeted on June 20 that he would be “ready for a cage match” with Meta Platforms boss Mark Zuckerberg. Musk made the comments in response to a post on Meta about developing a social media platform to rival Twitter, which is owned by Musk.
Zuckerberg later posted a caption on Instagram, a platform owned by Meta, that read, “Send me the location”. Musk later tweeted “the Vegas Octagon”, referring to the venue used for mixed martial arts bouts.
”If Mark Zuckerberg and Elon Musk go ahead with their bizarre plan to stage a cage fight, odds-makers reckon jiujitsu aficionado Zuckerberg will win. But what if Meta Platforms and Tesla , the companies they run, were pitted in a theoretical brawl? Musk’s company would probably come out on top.”