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California HQ Exodus Less Painful Considering Record-Breaking Public Debuts
Oracle’s headquarters move to Austin is the latest in a series of California corporate relocations to Texas, a list that includes such firms as HPE, Tanium and Palantir. The exodus of high-profile firms may have started with Toyota in 2014, yet the latest departures are set against a backdrop of record-breaking Wall Street debuts by California companies this year.
The moves to Texas certainly tarnish the Golden State’s shine from a HQ ranking and status perspective, though researchers at JLL point out the departures likely won’t damage the state long-term, especially when considering the overall market.
JLL’s Alexander Quinn notes that while Oracle certainly is a large company and has considerable staff in California, the employee headcount is not likely to see a meaningful change. Quinn suggests the relocation “should be considered in context to the continued business formation and IPO explosion in our market.”
Just last week, six Bay Area IPOs realized a new public market cap of roughly $174 billion, encompassing C3.ai, DoorDash, 4D Molecular, PubMatic, Hydrofarm and Airbnb. By comparison, Oracle is valued at about $180 billion. The JLL researcher also points out 41 Bay Area companies went public in 2020, and today those companies hold $409 billion in gross market cap.
“If you add HPE, Charles Schwab, and Oracle’s market cap, we are administratively losing a combined $290 billion in market cap. In other words, if we just look at the IPOs alone, the Bay Area is still up >$100 billion when subtracting this [Oracle] HQ relocation,” writes Quinn.
He adds, Bay Area companies with their flag still officially planted in California gained $2.66 trillion in market value since Q1 2020. Another positive aspect is the fact that the larger Bay Area publicly traded tech companies currently have more open job postings in the Bay Area than the same time last year, adds Quinn.
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- ◦Economy
