• Market Crumbs

"Texas Has A lot Going For It"—Bay Area Residents Agree

Image via Matthew T Rader on Unsplash

While California's Silicon Valley is the epicenter of all things technology, companies based out of Texas played an important role in the rise of the personal computer as well.

Christopher Cantwell was even inspired to create the hit television series Halt and Catch Fire following his childhood in North Texas's Silicon Prairie, where his father was employed as a software salesman in the 1980's.

Hewlett Packard Enterprise announced on Monday in its fourth quarter earnings release that it will be moving its headquarters from San Jose, California to Houston, Texas.

"HPE’s largest U.S. employment hub, Houston is an attractive market to recruit and retain future diverse talent, and is where the company is currently constructing a state-of-the-art new campus," HPE said. "The Bay Area will continue to be a strategic hub for HPE innovation, and the company will consolidate a number of sites in the Bay Area to its San Jose campus. No layoffs are associated with this move."

Texas Governor Greg Abbott thanked HPE for relocating to Houston while explaining why more than 10% of Fortune 500 companies are headquartered in the state.

"Hewlett Packard Enterprise joins more than 50 Fortune 500 companies headquartered in the Lone Star State, including 22 in the Houston area alone," Abbott said. "That is because Texas offers the best business climate in the nation. Our low taxes, high quality of life, top-notch workforce, and tier one universities create an environment where innovative companies like HPE can flourish."

HPE's announcement comes as a number of technology founders and executives make the same move from California to Texas. Dropbox CEO Drew Houston, Splunk CEO Douglas Merritt and Palantir co-founder Joe Lonsdale are just a few of the high profile names reportedly set to make Austin their new permanent home.

"Texas is a lot like going to California 40 to 50 years ago," Lonsdale said. "It's very welcoming, it's a dynamic economy, it's affordable. Texas has a lot going for it."

Even Elon Musk, who reportedly changed his driver's license to a Texas license, has floated the idea of moving Tesla's headquarters from Palo Alto to Texas. Tesla's headquarters remains in California but the company announced in July it will build its next Gigafactory near Austin.

"I guess a lot of people from California, if you ask them what's the one place you would move outside of California, it's Austin…," Musk said. "I went to our team and said, 'Where do you want to spend time? And where would you potentially move?' And they were like, 'Well, Austin is just the No. 1 choice.'"

Data from moving company moveBuddha.com shows Texas is by far the most popular destination for those leaving the San Francisco Bay area. So far this year, 16% of outbound Bay Area residents moved to the state. That's more than the combined total going to next two most popular states—Washington and New York, which accounted for 7.9% and 6.5% of the outbound total, respectively.

Austin is attracting the bulk of the new Texas residents as 7% of outbound Bay Area residents are moving to the city. Two additional Texas cities made the list of the top 15 most popular destinations as Dallas and Houston ranked 8th and 12th, respectively.

Their report shows Austin's median value of owner occupied housing is $312,300 compared to $746,211 for all Bay Area counties. Their report shows Dallas' and Houston's median values stand at $169,400 and $161,300, respectively.

Texas is cementing itself as the go-to destination for companies and individuals who want to escape the Bay Area for a lower cost of living and friendlier business climate.

Leftover Crumbs

  • Pfizer and BioNTech get U.K. approval. Pfizer and BioNTech have received a temporary authorization for emergency use for their Covid-19 vaccine from the U.K.'s Medicines & Healthcare Products Regulatory Agency (MHRA). The companies are anticipating approvals from other countries, including the U.S., in the coming days and weeks and are ready to deliver vaccine doses. "This authorization is a goal we have been working toward since we first declared that science will win, and we applaud the MHRA for their ability to conduct a careful assessment and take timely action to help protect the people of the U.K.," Pfizer chairman and CEO Albert Bourla said.

  • Mortgage demand jumps. Despite the Thanksgiving holiday last week, mortgage applications to purchase a home rose by 9% on a weekly basis and now stand 28% higher than the same period last year, according to the Mortgage Bankers Association. The average loan amount to purchase a home jumped to $375,000, the highest since the survey's inception in 1990. "Housing demand remains strong, and despite extremely tight inventory and rising prices, home sales are running at their strongest pace in over a decade," MBA associate vice president of economic and industry forecasting Joel Kan said.

  • Walmart drops shipping minimum. In a move to better compete with Amazon Prime, Walmart announced it will remove the $35 minimum to qualify for free shipping for members of its Walmart+ program, effective December 4. "Customers have been clear – they want this benefit," Walmart chief customer officer Janey Whiteside said. "Being able to toss an item into your cart, regardless the total, and check out right away lets them knock little things off their to do list in no time."

  • Merck sells Moderna stake. Merck said its sold its equity investment in Moderna in the first half of this quarter as the company's stock has soared amid optimism over its Covid-19 vaccine. Merck invested in Moderna in 2015 and 2018 before the company's stock became publicly traded in December 2018. "Merck achieved a substantial gain on its direct holding in MRNA over the life of the investment, particularly in 2020 given the substantial appreciation in MRNA's stock price," Merck said in a statement.

  • Who's the worst plastic polluter? An annual audit from the Break Free From Plastic Campaign found the Coca-Cola Company and PepsiCo produced the most plastic waste for the third-consecutive year. Coca-Cola accounted for 13,834 pieces of plastic across 51 countries last year while PepsiCo accounted for 5,155 pieces across 43 countries. Other companies to make the top 10 include Nestlé, Mondelēz, Mars, Procter & Gamble, Philip Morris, Colgate Palmolive and Unilever.