Tesla vs. Meta cage fight already has a winner

NEW YORK, June 23 (Reuters Breakingviews) - 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.  

Tesla’s advantage starts at the weigh-in. The electric-vehicle maker’s roughly $800 billion market capitalization is nearly $100 billion ahead of Zuckerberg’s social network. And while Meta is larger by revenue, Tesla is growing faster. Analysts polled by Refinitiv expect the two companies’ top lines to almost converge by 2025. And in investment terms, Musk gets the takedown. A dollar invested in the-company-formerly-known-as-Facebook’s stock-market debut in 2012 is now worth $7.45. The same dollar invested at the same time in Tesla is now worth $144.

As finances go, Meta’s are the more muscular. The company had $37 billion of cash and marketable securities at last count. Tesla’s own dollar hoard is building, but Zuckerberg is way ahead, generating $116 billion of cumulative free cash flow over the last five years and shipping $96 billion of it to shareholders through buybacks.

That’s one round apiece. Then comes governance, though, where both companies are featherweights. Zuckerberg holds super-voting shares at Meta, which means shareholders can’t do much if he squanders their resources. His foray into building a virtual-reality “metaverse” entailed a nearly $14 billion operating loss last year. Shareholders complained, but they have few other options. Musk has shareholders in a toehold too, but for different reasons. He owns only 13% of his company, but Tesla’s board is stacked with allies and corporate bylaws make change difficult. The difference: shareholders seem mostly calm about this, and repeated controversy has done little to dislodge him.

The clincher isn’t heft but strategy. Both Tesla and Meta are trying to reshape the world. But Meta’s virtual-reality aspirations face stiff competition from even bigger firms like Apple . Its Facebook platform is under threat from upstart TikTok, and Zuckerberg’s innovations are hemmed in by regulators who fear the company’s dominance.

Tesla, meanwhile, is transforming the physical world. Its vehicle-charging network may become a core part of America’s infrastructure backbone, and its battery-production operations could power not just cars but the electric grid. Governments want what Musk is selling; that’s not so true for Zuckerberg. That game changer tips 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 “up for a cage match” with Meta Platforms boss Mark Zuckerberg. Musk made the comments in response to posts about Meta developing a rival social media platform to Twitter, which Musk owns.

Zuckerberg subsequently posted a caption reading “Send Me Location” on Meta-owned platform Instagram. Musk later tweeted “Vegas Octagon," referring to a venue used for mixed martial arts bouts.