Big business lobbies for big government in order to profit in ways the free market would never allow. All the time. The light bulb law is a great example, as this stock report from Motley Fool lays out in a dispassionate manner:
Companies that will benefit
General Electric (NYSE: GE) and Philips, the sector leaders in the incandescent light bulb market, also manufacture CFLs and LEDs.
The incandescent light bulb phase out will increase their lighting revenues in the short term because LEDs and CFLs cost more than the incandescent bulbs.
Cree (NASDAQ: CREE) , the leading LED light bulb pure-play, will also benefit. Due to its vertical integration, Cree is one of the lowest cost LED bulb makers.
Due to the fact that LEDs comprise only 1% of the U.S. lighting market, Cree also has a lot of growth ahead.
Because bubbles often grow with extra media coverage, the retirement of the incandescent light bulb could be a catalyst to send Cree stock higher.
Of course, GE and Philips lobbied for the law, and Philips partnered with the Natural Resources Defense Council to launch the serious push for it.
So next time you see some green group touting benefits to the planet of a new regulation to constrain your choices, ask yourself, “Which companies will benefit from this law?”