After Tesla’s Stock Fall, Shareholder Patience May Finally Run Out

December 15, 2022
by Björn Jeffery
SvD Näringsliv

This analysis was first published in SvD Näringsliv, in Swedish, on December 15th, 2022.

Tesla is the EV market leader, but faces tough competition ahead. The bigger storm cloud, though, is coming from inside: the CEO is selling shares and pouring his energy into Twitter.

Have you heard of Marc Tarpenning and Martin Eberhard?

The most devoted enthusiasts will know the names, but for most people, they are two figures who disappeared without leaving a visible mark on the world. They are, in fact, the founders of Tesla. Eberhard also served as CEO during the company’s first four years.

But the name associated with the company is Elon Musk — the man who always seems to be at the centre of things.

As a colourful — and controversial — figure, it is hard to separate him from the companies he becomes involved with. That Tesla has benefited from this fascination is obvious. But now the other side of that coin is starting to show.

This week, Musk sold 22 million Tesla shares for $3.6 billion, roughly 37 billion kronor. He remains the largest shareholder, but the timing of the sale raises questions. Tesla’s stock has fallen around 55 percent since the start of the year and is now at its lowest point since autumn 2020. When a company’s CEO — an insider — sells shares, it is always noteworthy. And it invites scrutiny.

Part of the explanation comes down to Twitter. Following Musk’s $44 billion acquisition of the platform earlier this year, he made two large share sales. The first was in April, for around $8.5 billion, and then again in August for $3.95 billion. Both were necessary to finance the deal — a deal he spent months trying to walk away from.

On both occasions, Musk stated he did not intend to sell further Tesla shares. This week’s transaction was therefore not something other shareholders were expecting. That an acquisition of this scale requires cash is something most people can understand. What is harder to see is how Tesla’s shareholders benefit from any of this.

Beyond the share sales, there is a growing concern about where Musk’s time and attention actually go.

KoGuan Leo, the third-largest individual Tesla shareholder, put it plainly: “Elon has abandoned Tesla and Tesla has no functioning CEO. Tesla needs and deserves a full-time CEO.”

More shareholder voices are now being raised. They see a company that needs complete focus to navigate an increasingly competitive electric vehicle market, where Chinese rivals are gaining ground fast. Having a CEO spread across so many other companies is a liability. Twitter and Tesla have nothing in common beyond their owner — but the associations bleed across regardless.

The question this raises is what Tesla’s board should do. Musk is certainly a major shareholder, but not the only one. The board’s primary responsibility — in any company — is to represent all shareholders and ensure the right person is in charge. That is a difficult task under ordinary circumstances. It is particularly difficult when the CEO’s brother, Kimbal Musk, is one of the board members.

Removing Musk is not going to happen any time soon. But even prominent CEOs get pushed out from time to time. One need only look at Twitter itself, where Jack Dorsey stepped down just over a year ago. He was then running both Twitter and the payments company Block (formerly Square). The loudest voices calling for his departure were activist fund Elliott Management, who believed the company needed new leadership and faster product development. Back then, the argument was simple: you cannot have a CEO with two jobs.

Elon Musk has considerably more than two. On the other hand, he also appears to work extraordinarily hard, and has an army of loyal allies around him. Neither Tesla, SpaceX nor Neuralink need him present every day for the companies to continue developing.

The success Musk has delivered has earned him enormous goodwill. That goes a long way. But after a share price fall of more than half, there is a real risk that patience eventually runs out — even for Elon Musk.

ChatGPT Is the Biggest Buzz in Tech Right Now — Could It Be the Next Google?

December 6, 2022
by Björn Jeffery
SvD Näringsliv

This analysis was first published in SvD Näringsliv, in Swedish, on December 6th, 2022. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

A research organisation is behind the biggest thing the tech world has talked about in years: ChatGPT. The new AI software is taking the internet by storm. Could this be the foundation of the next Google?

Ask and you shall receive, as the saying goes. That has rarely been more literally true than with ChatGPT. In just one week, the new AI software has gained over a million users.

Part of the innovation lies in the interface: you can chat directly with the software, asking questions in natural language. The responses also feel more human than the correct-but-mechanical answers we are used to from search engines. It feels like talking to someone who is genuinely trying to help — and who can refine their answers based on your feedback.

Ask it directly what to make for a Swedish Christmas dinner and it responds in an instant, with a confident, reasonable list. The impression is striking.

But the most interesting thing about this phenomenon is not the novelty of the user experience. It is what the underlying technology could form the basis of — and what comes next.

For a company like Google, which built a world-leading position by being the best at finding things on the internet, services like ChatGPT represent a new and unusual challenge. Google has been essentially uncontested in search for a long time. But as so often with new technology, the challenge is coming from the side — in this case from a partly non-profit research organisation, OpenAI — rather than from a direct competitor.

The challenge for Google is not the technology itself. Google employs thousands of people working on machine learning. The issue is scale and the company’s revenue model.

Google handles around 8.5 billion searches every day. Getting a service with a million users to run quickly and reliably is a challenge. Getting Google to work for everyone on Earth is a fundamentally different and vastly harder problem.

But the deeper issue is financial. Google generated nearly 6 trillion kronor in revenue over the past twelve months. The vast majority came from ads linked to search results. Changing how search results — and the accompanying ads — are presented therefore carries enormous risk. The smallest change could result in billions in lost revenue.

Precision is what Google charges for. That dependence points toward incremental changes rather than radical redesigns. The question is not whether Google could technically overhaul its search engine. The question is whether anyone inside Google can justify that kind of risk. Large companies, as Google has now become, tend to favour the safe over the bold in moments like this.

Some healthy scepticism about ChatGPT is also warranted. Stack Overflow — a question-and-answer site for software developers — has temporarily banned answers generated by ChatGPT. The responses are simply wrong too often. And what makes it worse is that the wrong answers tend to look plausible and well-sourced. That undermines the entire point of the site: being able to find a correct answer quickly.

It is early days. But the direction is clear: AI-powered conversational interfaces are coming for search. Whether it is OpenAI, Google, or someone else that ends up defining what that looks like is still very much an open question.

Suddenly Musk Gets It: Apple’s App Tax Is Calling the Shots

November 29, 2022
by Björn Jeffery
SvD Näringsliv

This analysis was first published in SvD Näringsliv, in Swedish, on November 29th, 2022. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

Now that Elon Musk has woken up to Apple’s “tax,” Spotify gains a loud new ally. But Musk is playing a high-stakes game — and his newly acquired Twitter cannot afford to lose it.

Twitter’s new owner Elon Musk is a busy man. On top of owning Twitter, he is also a major shareholder and CEO of Tesla, SpaceX, Neuralink and the Boring Company. There are surely more companies and titles to add to the list.

Perhaps it is because he is so busy that he is only now discovering things that have been going on in the tech world for years.

Musk tweeted this week: “Did you know Apple puts a secret 30% tax on everything you buy through their App Store?”

Eh, yes? Everyone in the tech world knows this by now. It is exactly what the court case between Apple and Epic Games was about. It is the same issue Spotify brought to the EU with a formal complaint. It is the ongoing regulatory battle that has occupied regulators across Europe, the US and South Korea for years.

When Musk discovers something, it does at least tend to get noticed. And there is no harm in having an influential voice draw public attention to this issue. The 30 percent cut Apple takes from in-app purchases is genuinely significant.

But complaining loudly is ultimately just noise. For players like Spotify and Epic Games, having vocal support on these issues is no doubt welcome — but it is unlikely to change the outcome of ongoing legal processes.

Musk will probably also come to realise why relatively few developers actually pick a fight with Apple: it can be very expensive to have them as an enemy. If Apple decides that something in Twitter warrants closer scrutiny, the tech giant will scrutinise it. That process can be appealed — but only to another part of Apple. In practice, business-critical features can be kept off the market based on little more than Apple’s discretion.

For Twitter, this could be catastrophic. The platform is entirely dependent on users on Apple’s operating system, and uses the App Store as its most important distribution channel. If the app were removed — as Musk himself says Apple has threatened — it would be enormously difficult for Twitter to function as a business.

In the end, Musk is in a position where he needs Apple far more than Apple needs him. Picking this fight loudly and publicly may feel satisfying, but the leverage runs firmly in one direction.

After the FTX Collapse: Tokenomics Could Change Everything — If We Want It To

November 26, 2022
by Björn Jeffery
SvD Näringsliv

This analysis was first published in SvD Näringsliv, in Swedish, on November 26th, 2022. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

After billion-dollar crashes and fraud across the crypto world, many are wondering whether the market is simply over. But what is called “tokenomics” has the potential to reshape large parts of society. The more interesting question is: do we even want that?

In the autumn of 2021, a piece of American history came up for sale at the prestigious auction house Sotheby’s. One of the thirteen surviving copies of the US Constitution was on the block. The slightly yellowed pages are considered a national treasure.

So far, perfectly normal.

Then the crypto world got involved.

A so-called DAO was formed — a decentralised autonomous organisation — with one single purpose: to buy the Constitution. Think of a DAO as the crypto world’s equivalent of a homeowners’ association. There are rules to follow, but no single person is in charge. Decisions happen through voting. Tokens give you a vote.

The DAO raised the equivalent of over 400 million kronor in just a few days. Tens of thousands of people participated from around the world, each buying in with crypto. It was a remarkable demonstration of what this technology can enable.

In the end, a private bidder outbid the DAO, and the document went elsewhere. But the experiment stuck.

Equity trading happens on exchanges with rules, customs and laws. That creates reasonably fair conditions. Trading in unlisted shares carries higher risk — which is why we have the term “venture capital.” Cryptocurrencies carry even higher risk, and far fewer rules. Fraud and pump-and-dump schemes are part of everyday life, even among established players.

There are differences between projects. Many enthusiasts would argue that Bitcoin is fundamentally different — technically and philosophically — from everything else. That may be true, but many speculators are not there for the philosophy. They are trying to make money.

Looking at price versus value in crypto, it is no exaggeration to say that prices have been high relative to the underlying value, which has often been low. But the function — the underlying promise of what this technology could enable — is worth examining independently of price.

That is where the real rescue of crypto’s reputation may eventually come from.

One area where it could have genuine impact is traditional finance. These initiatives are known as “DeFi” — decentralised finance. The idea is to trade financial products without centralised intermediaries like banks or central banks. Transactions can be faster and cheaper, at least in theory.

The underlying technology — blockchains — makes this possible. As a developer, you can build your own financial company on the Ethereum blockchain without needing external approval. Trying to do the equivalent inside Nordea or Swedbank would be nearly impossible, requiring both their goodwill and their permission.

DeFi removes the middlemen from financial transactions. Instead of trusting institutions, you trust the technology. Predefined smart contracts execute the transactions — no one interferes.

Another area is NFTs — non-fungible tokens. The NFT market has also crashed after intense speculation. Sales volumes fell 99 percent between May and September this year. But the underlying function remains, and it is a genuinely novel way to regulate ownership in a digital world that has historically been driven by copying. It also works for representing ownership of physical things. In the US, the first physical house has already been sold as an NFT.

There are interesting tendencies on the horizon, despite all the crashes. When, or perhaps if, these markets can regain consumer trust, tokenomics could become building blocks for a new kind of internet.

But perhaps the most interesting question is also the simplest: do we actually want it? When more and more things are represented as tokens, more things become tradeable commodities. Life starts to resemble a trading floor — one that can also get hacked. Tokenomics makes it possible to own a fraction of nearly anything. That is a significant statement about where the world might be heading.

Streaming’s New Normal: How Netflix Is Going Full Seinfeld

November 22, 2022
by Björn Jeffery
SvD Näringsliv

This analysis was first published in SvD Näringsliv, in Swedish, on November 22nd, 2022. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

Hoping for a new Squid Game this winter? You might be disappointed. Everything points to Netflix’s content becoming more like Seinfeld than big prestige dramas. The reason: a new business model.

“We basically sold nuclear weapons to a third-world country, and now they’re using them against us.”

It sounds like a declaration of war — for good reason. But the slightly dramatic statement came before the war in Ukraine, and carries less geopolitical weight than it implies. We’re talking about streaming. Nothing more serious than that.

The quote comes from Bob Iger, the then-former CEO of Disney. He was talking about how the entertainment giant licensed its content to Netflix for years. It was good money in the short term, but it also meant Disney+ took a long time to launch.

When those contracts expired, Netflix went from being a customer to being a competitor.

Last weekend, Bob Iger reclaimed the CEO role after his successor Bob Chapek was fired after just over two years. The internal power dynamics at Disney are a story in themselves — but what matters for this analysis is what it means for the streaming market.

Until now, Netflix has been able to focus solely on its subscribers. Now it has added a new target audience: advertisers.

For anyone who has worked in commercial television, this is nothing revolutionary. It’s how the industry has always worked. For Netflix, it is not trivial.

Suddenly, the streaming giant needs to ask itself what advertisers think about its content. And the answer to that question has major consequences for what content gets made.

Netflix ads haven’t arrived in Sweden yet, but the effects are already becoming visible — through the shows they commission and acquire.

Julia Alexander at the newsletter Puck calls this the “Seinfeld strategy.” What works well right now is comedy — preferably light, something you can watch actively or have on in the background. Timeless themes where familiarity is part of the charm. Seinfeld and The Office are the clearest examples.

Netflix’s own comedy Blockbuster — set inside the video rental chain they helped kill — fits the mould exactly.

The ad-supported tier points in one clear direction: safer, more mainstream content. Nothing that alienates advertisers, nothing too challenging or niche.

The hope is that you’ll sit there with half an eye on the TV while scrolling on your phone. A few ads roll by in the background. Bingo.

That, in essence, is Netflix’s new business model.

FTX Files for Bankruptcy — The Crypto Giant Was Run Like a Youth Hostel

November 14, 2022
by Björn Jeffery
SvD Näringsliv

This analysis was first published in SvD Näringsliv, in Swedish, on November 14th, 2022. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

Billions disappeared when crypto company FTX collapsed. The question being asked now is how investors could have placed so much money in a company run with so little professional rigour.

Ten people living together in a luxury penthouse on the Bahamas, worth around 415 million kronor. Most of them in a romantic relationship with each other — something its founder openly discussed on social media.

What sounds like the premise for another bad reality TV show was in fact the operating base of FTX, one of the world’s largest crypto exchanges, which has now filed for bankruptcy. The final accounting is still not complete, but debts from the collapse appear to run between 10 and 50 billion dollars.

Many are now asking how this could have happened. Among them, presumably, are a large group of Canadian teachers whose pension fund invested heavily in FTX.

How did it happen?

Looking more closely at Sam Bankman-Fried — known widely as SBF — you don’t find obvious answers. A 30-year-old with dishevelled hair, who wore rumpled shorts to meet world leaders, and who cultivated an image somewhere between eccentric genius and accidental billionaire.

In 2019 he founded FTX and Alameda Research and moved to Hong Kong. Two years later he relocated to the Bahamas. Timing, as they say, is everything.

Bankman-Fried became known as one of the strongest supporters of the cryptocurrency Solana, which was also popular with other investors who believed crypto could be the foundation of “a new kind of internet.”

Clearly, that did not come to pass in the way they imagined.

But the perceived excitement around that vision led several investors to set aside ordinary principles around risk management. Investors poured over 2.2 billion dollars into FTX. For a time, the investment looked like genius. Bankman-Fried appeared on conference stages alongside Tony Blair, and his family sponsored investigative journalism.

Then it all collapsed, very fast.

In the space of a few dramatic days, FTX went from global star to the crypto world’s most notorious cautionary tale. The details of how unprofessionally the company was actually run continue to emerge, and they are alarming.

That the crypto market is volatile is no surprise. That fraud and incompetence exist in any industry is also not surprising. What is striking in the FTX case is that the chase for the next big thing seems to have led investors to make enormous concessions on the most basic principles of due diligence.

Polestar Solves Its Immediate Cash Crisis — But an Enormous Challenge Remains

November 11, 2022
by Björn Jeffery
SvD Näringsliv

This analysis was first published in SvD Näringsliv, in Swedish, on November 11th, 2022. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

While Tesla’s CEO is busy elsewhere, the other EV companies are scrambling to find their footing. Polestar has solved its immediate cash crisis — but an enormous challenge still lies ahead.

17 billion kronor.

That is what Polestar’s main shareholders — Volvo Cars and PSD Investment (owned by Volvo’s chairman, who represents Geely) — have committed to lending the struggling electric vehicle company. And now that Polestar has released its latest quarterly figures, it is clear why those billions are needed. The money is still flowing out fast.

The new quarterly numbers show revenue doubled year-on-year — from 213 to 435 million dollars. That is a positive sign. But the losses are still significant: the company lost 196 million dollars, roughly two billion kronor, in the third quarter alone.

That is a meaningful improvement compared with the same period last year, but the path to profitability is still far off.

That more capital would be needed was therefore no surprise. And tapping the stock market in current conditions was not a realistic option.

A loan from existing shareholders was therefore one of the few reasonably viable alternatives left.

But Polestar is far from alone among EV companies facing this pressure. Consider just a few of the share price performances this year:

Xpeng: down 86 percent. Rivian: down 68 percent. Fisker: down 52 percent. The list goes on. With that kind of share price performance, the stock market becomes a liability rather than an asset as a source of capital.

In times like these, having well-capitalised shareholders matters enormously. Polestar appears to have them — but the expectation is that those owners are growing increasingly impatient.

Further down the list sits the EV company the world watches most closely: Tesla. Its share price is down 52 percent since the start of the year.

A few weeks ago, Tesla’s CEO Elon Musk was forced to sell around 4 billion dollars worth of Tesla stock — around 43 billion kronor — presumably to help fund his Twitter acquisition. The debt structure behind that deal may well become a significant financial problem down the line. With Pfizer, Carlsberg and Audi all pausing their advertising on Twitter, the pressure on the platform is only growing.

The market leader’s CEO therefore has his attention firmly elsewhere. He is a multi-billionaire — but one who has now bet enormously on a very different kind of company. Does Tesla miss his undivided focus?

The answer is probably yes.

Tesla’s lead in the market was not built on Musk’s undivided attention alone. But the main challenge for the EV industry right now is intensifying competition — and that is exactly where leadership presence matters.

Volkswagen’s various ID models now share the roads with Audi’s e-tron, the Renault Zoe and Kia’s EV6. Polestar’s parent company Volvo Cars just launched its first fully electric SUV, the EX90 — competing in the same segment as Polestar itself.

The bottom line is clear. With a tougher financing environment, Polestar’s ability to keep pace with the competition has become harder to take for granted.

The Strategic Move That Brought Down One of the World’s Largest Crypto Exchanges

November 9, 2022
by Björn Jeffery
SvD Näringsliv

This analysis was first published in SvD Näringsliv, in Swedish, on November 9th, 2022. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

A strategic masterstroke brought down one of the world’s largest trading platforms in less than 48 hours. In doing so, it may have changed the direction of the entire crypto market.

Thousands of visitors had gathered at the Token 2049 conference in London to discuss the latest in crypto. It would be hard to imagine a worse day for an event of this kind. It was the equivalent of running an “Investment Banking Executive” conference the day Lehman Brothers collapsed.

That is where the crypto market finds itself right now. FTX, the world’s second-largest exchange for cryptocurrencies, has imploded.

It is a strategic move that will be written about for a long time.

It all begins with an article in trade publication Coindesk, which obtained the balance sheet of Alameda Research — a trading firm controlled by FTX founder Sam Bankman-Fried. The balance sheet revealed that Alameda was heavily exposed to FTT, FTX’s own native token.

The problem is that FTT is not heavily traded, and therefore has low liquidity. That means a large seller can crash the price on its own.

That is where Changpeng Zhao steps in. He had previously invested in FTX, but having now seen the balance sheet, he announced on Twitter that Binance would be liquidating all of its FTT holdings.

Zhao knows the market cannot absorb this. There are no buyers. The price drops 20 percent immediately. Users start withdrawing their funds en masse.

FTX asks Binance to step in and rescue it. Binance initially agrees — then backs out when it sees how deep the hole truly is.

It is simple, elegant, and brilliant. Zhao himself claims it was not planned — but it is hard to believe a person of his experience didn’t understand what his announcement would set in motion.

Less than three months ago, Sam Bankman-Fried appeared on the cover of Fortune magazine, celebrated as a crypto billionaire and philanthropist. The fallout from this crash, however, will have effects far beyond him personally.

Trust in crypto trading was already fragile. Seeing one of the largest exchanges go under — seemingly overnight — will not help. Coinbase, the largest US-listed crypto exchange, has tried to put a distance between itself and the chaos.

FTX was also a company with enormous venture capital exposure. Sequoia — one of the world’s most prominent investors — has already written down its entire stake. Other major funds followed. Valuations that looked impressive are now worth nothing.

Crypto enthusiasts have long promised to reshape finance, to build a new system that is fairer, faster and more transparent. What this week has shown is that the industry still has a very long way to go before it can credibly make that case.

The Fed’s Triple Rate Hike Sends New Shockwaves Through Tech

November 3, 2022
by Björn Jeffery
SvD Näringsliv

This analysis was first published in SvD Näringsliv, in Swedish, on November 3rd, 2022. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

The triple rate hike was expected. But Fed chair Jerome Powell simultaneously sent new shockwaves with the announcement that the terminal rate may need to go even higher than the central bank had previously believed. Years of excess at the tech giants may now be coming to an abrupt end.

Five men sitting on a rooftop. All employed, but none of them with any project to work on. The newest member asks the others why they even come to work. The answer is short, concise — and telling for an era that now appears to be drawing to a close.

“Rest and vest.”

“Vest” means your stock options are paying out — typically gradually over several years. “Rest” means exactly what it sounds like.

The now-classic scene from the satirical TV series Silicon Valley illustrates how idleness and excess became an integrated part of many large tech companies. They have simply been so enormously profitable that it barely mattered — or seemed to matter — whether every employee was working at full capacity.

On the discussion forum Reddit, there is an entire section of tech workers openly describing how they hold multiple jobs simultaneously without their employers noticing.

That era now appears to be ending.

When American central bank chief Jerome Powell announced, on Wednesday evening Swedish time, the expected rate hike of 75 basis points — to the range of 3.75–4 percent, the fourth consecutive rise — he simultaneously signalled a gravity for the American economy that is hard to ignore, even for the very largest companies.

Sundar Pichai, CEO of Alphabet (Google’s parent company), had been on this question earlier in the autumn. At a conference he talked about how he believed the company could increase its productivity by 20 percent, and admitted that internal bureaucracy could slow decision-making. Turning around a company of that size is no trivial matter, however. In Alphabet’s latest quarterly report, the number of employees had grown by over 36,000 in just one year, to a total of 186,779. For comparison, that would make it Sweden’s fourth-largest city.

That it is hard to maintain productivity at this scale is therefore not surprising. The adjustment for many tech giants is likely to be both painful and slow.

A big part of the reason is that employees have limited incentive to help. They get free food, laundry services and gym access, and have earned fortunes as American middle managers while share prices rocketed.

Despite recent declines, Alphabet’s share is still up over 3,200 percent since its IPO in 2004.

But growth has stalled and margins have shrunk. Alphabet — despite all the new hires — grew revenue by just six percent in the third quarter, compared with 41 percent the year before. The profit margin fell from 32 to 25 percent. The immunity to bad times that tech giants once displayed has vanished.

The same pattern is visible at other giants. Amazon recently forecast a weaker fourth quarter than expected, with a growth rate of between 2 and 8 percent. A company of Amazon’s size — over 1.5 million employees — can both influence the American economy and act as a barometer for it. That figure spans office, delivery and warehouse workers. Most of them have not had the luxury of sitting on a rooftop doing nothing.

During the holiday rush at year’s end, Amazon will hire 150,000 people in the US to handle demand — the same number as last year. But in October, 10,000 open office positions were quietly cut as the economic outlook grew increasingly bleak.

CNBC’s legendary commentator Jim Cramer — known for his often dramatic formulations — said Amazon will need a dedicated team with a single goal: firing people. According to Cramer, the company may need to lay off around half a million workers.

In total, over 95,000 tech workers have lost their jobs this year, according to the site Layoffs.fyi.

When Jerome Powell earlier this year said that a 75-basis-point hike “was not something the committee was actively considering,” the tech-heavy Nasdaq 100 immediately rose 3.4 percent. The hope of a so-called “soft landing” for the economy was still alive, and tech companies could keep developing in a low-interest-rate world.

Now the situation is suddenly the reverse. Rates are at their highest since 2008. Neither the tech companies nor their employees have experienced anything like this before.

After more than 15 years of almost incomprehensible success and excess, a new reality is drawing closer. When tech workers realise that the best years may be behind them, daily life will get harder for them too. That is precisely the message Jerome Powell wants to send. And on Wednesday he was clear on one point: future hikes may come in smaller steps, but the Fed has no plans to pause. If anything, rates could end up higher than the central bank had previously anticipated.

Meanwhile on Nasdaq, the big tech stocks lit up red: Alphabet, Amazon and Meta all fell to year lows on Thursday. Apple fared slightly better but still dropped around 5 percent. The Nasdaq Composite fell 3.4 percent.

Dream Games’ New Strategy for Mobile Gaming

November 2, 2022
by Björn Jeffery
SvD Näringsliv

This analysis was first published in SvD Näringsliv, in Swedish, on November 2nd, 2022. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

For years, Swedish gaming company King has dominated the charts with Candy Crush Saga. A young Turkish studio is now looking increasingly like a genuine challenger.

The mobile gaming market is made up of countless micro-genres where developers compete to be the best. In what is called “match 3” — where you swipe to line up three identical items — Candy Crush Saga has long been dominant.

The genre is deceptively simple at first glance. There are hundreds of games that look almost identical. The difference lies in the details that give players the urge to keep going. For many, Candy Crush just feels better. But creating that feeling is an entire science in itself, behind the scenes.

That is what makes it so remarkable when a brand-new match 3 game appears and becomes enormously popular. Turkish studio Dream Games was founded as a spin-off from Peak, which was acquired by the American company Zynga. In just three years, they have created one of the world’s most successful mobile games — Royal Match. In a genre that every major studio has tried to crack, it is a small upstart that has done it better than most.

The key may lie in unusually sharp focus. The entire company — around 100 people — works on a single game. The result is a highly polished and elegant experience where something new happens every day. The numbers speak clearly to the success of that strategy: estimated revenue over the past twelve months is 4.7 billion kronor.