There are several potential reasons for the hard hit on smaller companies during the pandemic. One of the main reasons is the rapid shift to e-commerce, which favored larger companies with established online platforms. Smaller companies, particularly those in retail, may not have been able to adapt as quickly or effectively. Additionally, a significant portion of the stimulus capital that was injected into the U.S. market went towards innovative firms, which may have left smaller, less innovative companies at a disadvantage. Market consolidation around larger, more stable companies with solid balance sheets, high-value assets, cheap debt, and low fixed costs also likely played a role.

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Firms like Costco and Honeywell can maintain their resilience in the post-pandemic world by focusing on innovation and leveraging their strong balance sheets. They can also take advantage of cheap debt and low fixed costs to invest in growth opportunities. Additionally, they can focus on ecommerce, which has seen a significant increase in share of U.S. retail during the pandemic. Finally, they can look for opportunities to consolidate their market position around their high-value assets.

Market consolidation around innovators or market giants can lead to a number of implications. Firstly, it can lead to a decrease in competition as these large companies dominate the market, potentially leading to higher prices for consumers. Secondly, it can result in a lack of innovation as smaller companies, which often drive innovation, are unable to compete. Thirdly, it can lead to job losses as smaller companies are forced out of business. Lastly, it can result in a concentration of power and wealth, which can have broader societal implications.

The high valuation of Tesla can be attributed to several factors. Firstly, a large portion of the stimulus capital that entered U.S. capital markets went towards innovative firms like Tesla. Secondly, Tesla's focus on innovation and technology, particularly in electric vehicles and renewable energy, has attracted significant investor interest. Thirdly, Tesla's strong brand and its visionary CEO, Elon Musk, also contribute to its high valuation. Lastly, the company's potential for future growth and profitability is another factor that investors consider.

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Post Corona: From Crisis to Opportunity

What will the world of business look like after the coronavirus pandemic? The pandemic will accelera...

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