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The sixty-sixth edition of the Fortune 500 debuts today. The aggregate revenues of the list are nearly always up from the year before, and 2019 is no exception. The 500 largest companies in the U.S. by revenue grew 4% last year, to $14.2 trillion.
In fact, according to Fortune senior editor Scott DeCarlo, the master of the list, there have been only seven years since 1955 that total revenues have declined: 1958, 1982, 1986, 1991, 2002, 2009, and 2015. (The last one, in the middle of the long bull market, was due to a decline in oil prices, which hit energy companies.) The biggest one-year decline ever was 8.67% in 2009, during the financial crisis. It seems hard to believe next year’s percentage decline won’t exceed that drop.
The five most valuable companies on the list (but not the top-ranked companies because of the revenue basis) are all technology companies. No surprise there.
Seventeen companies make their debut on the list. One is Uber, the ride-hailing company now severely stricken by a lack of commuting or partying during the economic and bar-hopping lockdown. As I note in my feature about the company in turmoil, it’s altogether possible that while Uber made the list in its first year of eligibility—mainly public companies* are on the list, and Uber went public last year—it could fall off in its second.
At the other end of experience spectrum is Honeywell, which has been on every Fortune 500 list, one of 52 such companies. Robert Hackett tells the fascinating story of Honeywell’s efforts to refashion itself as a software company. That’s a particularly pressing matter given that aerospace is Honeywell’s biggest segment.
One statistic stood out for me in Hackett’s article: Honeywell has $9 billion in cash, a sign of its wherewithal in the downturn. That’s the same amount of cash as Uber has. The former generated its cash the old-fashioned way—by earning it. Honeywell made $6 billion last year. Uber, on the other hand, raised the cash from investors. It lost more than $8 billion last year.
(*Private companies that file audited financial reports to the SEC or state insurance regulators, like State Farm, can also be on the list.)
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A thought: I keep reading or hearing about CEOs who say their companies will emerge from the crisis “better than ever.” With a few exceptions—Zoom and Amazon come to mind—this is almost complete hokum. It is understandably wishful thinking and/or morale-boosting cheerleading by bosses unwilling to admit the truth to themselves, their investors, or their employees.
Adam Lashinsky
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
And I oop. Looking to a generation that doesn't even need words to communicate online, Facebook agreed to buy Giphy, the repository of animated GIFs, for $400 million. The service is already integrated into Facebook's apps, but also the apps of rivals like Twitter and TikTok. And that means the deal is likely to get a close review from antitrust regulators.
You get out of here. I'd say I told you so, but so would everyone else. SoftBank Group reported an $18 billion loss in its massive Vision Fund for the fiscal year, mostly from losses on its stakes in struggling startups WeWork and Uber. Billionaire founder Masayoshi Son said some of the companies he'd backed had fallen “into the valley of the coronavirus," but added, “I believe some of them will fly over the valley.”
You must be new here. In the Zoom wars—sorry, I mean the video-conferencing software wars—Google says its Meet app has passed 50 million downloads on Android. That's 10 times more than at the beginning of March, before Google decided to make it freely available.
My poor brain cannot cope. Social news site Reddit will let users earn digital currency by posting and participating in discussions on two of the service's forums, or subreddits. The two new cryptocurrencies, Moon and Brick, will be tracked on the Ethereum blockchain and will only be available to use for virtual Reddit merch.
Old and busted...new hotness. A group of criminal hackers based in Nigeria has apparently graduated from email scams ("I must solicit your strictest confidence in this transaction...") to COVID-19 scams. The hackers filed bogus unemployment claims around the country worth hundreds of millions of dollars using stolen identities. (Also, all mention of email scams must link to this hilarious video of comedian James Veitch engaging the scammers in some witty repartee.)
FOOD FOR THOUGHT
The boom in ecommerce extends beyond giants Amazon and Walmart. Wall Street Journal columnist Christopher Mims has the fascinating tale of home bakers selling their bread, muffins, and scones via sites like Etsy. He spoke with Abby Glassenberg, president of the Craft Industry Alliance, which represents online sellers.
Etsy has proved to have strengths that would have been difficult to anticipate, says Ms. Glassenberg. For one, its suppliers generally already work at home, so lockdown didn’t affect their ability to be productive, as long as they were able to get raw materials. For another, while both eBay and Amazon offer handmade goods, sellers who have sold at all three of these outlets say Etsy is their preferred marketplace. Etsy customers are willing to accept higher prices than eBay customers, and Amazon prioritizes sellers who can ship goods quickly, which isn’t always possible for solopreneurs producing on demand.
Besides, shoppers find comfort in buying food from producers who seem like real people they can relate to and trust—which Etsy does better than Amazon, for one.
IN CASE YOU MISSED IT
Why Intel is betting its chips on microprocessor mastermind Jim Keller By Aaron Pressman
Will 5G remake the post-coronavirus world? It already has, say the CEOs of Cisco and Qualcomm By Clifton Leaf
Uber’s proposed Grubhub acquisition highlights a growing food fight over deliveries By Danielle Abril
The class of 2020 is getting a crash course in job market uncertainty By McKenna Moore
Plant-based food sales see greatest gains yet as meat shortage fears grow By Rachel King
Quibi ‘losing the attention game,’ analyst says By Andrew Nusca
Is the stock market experiencing the dreaded ‘dead cat bounce’? By Ben Carlson
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BEFORE YOU GO
In a delightful crossover between big-budget Hollywood shows and the topics discussed herein, last night's episode of Billions on Showtime revolved around a bitcoin scheme hatched by some high school kids. Nice work if you can get it.
Aaron Pressman
