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Hey Snackers,
From Dalgona coffee to frog bread, TikTok-viral foods embody the creative renaissance of Gen Z's quarantine. The best one yet: Baby Yoda pancake cereal. Taste cuteness, you must.
The tech-heavy Nasdaq closed over 10K for the first time ever, lifted by Facebook, Apple, Amazon, and Microsoft which hit all-time highs Tuesday. Combined, they're worth almost $5T. Tesla also hit a record price, becoming the world's 2nd most valuable carmaker (just shy of Toyota).
Eat
Uber-Grubhub marriage is off the table after a European swoops in with $7.3B
Speak now or forever hold your pizza... Back in May, Uber was courting Grubhub for an engagement that would marry the two food delivery giants into a market leader (surpassing DoorDash) — now a European stud has swooped in to steal Uber's thunder.
- Intercontinental: American Grubhub is merging with European delivery giant Just Eat Takeaway.com — if you think that's a mouthful, that's because the European company was itself formed out of a merger.
- Confirmed threesome: In January, British food deliverer Just Eat merged with Dutch rival Takeaway.com in an $7.6B deal — now, the merged company is eating up Grubhub for $7.3B. Combined, they'll have 70M global active customers.
Parents prefer this marriage... US regulators aren't so thrilled about the consolidations coming out of the hyper-competitive delivery wars (where the best promo code wins).
- Uber pulled out of the deal talks because of antitrust concerns — Uber and Grubhub reportedly couldn't agree on who would shoulder most of the risk in the likely scenario that regulators got involved.
- A marriage with Just Eat solves this problem. Since the company doesn't have a US presence, the antitrust risk is much lower. JustEat and Grubhub aren't currently competing in the same market, so their merger doesn't hurt competition.
- BTW — Just Eat’s market value is over 3X that of Grubhub’s ($16B to $5.4B).
This defeats the purpose of the consolidation plan... Grubhub and Uber hoped to merge to reduce aggressive price competition (and "promiscuous" customers). But the Just Eat/Grubhub merger combines two leaders in separate markets — domestic competition stays the same. No delivery fee-jacking is expected as a result of this deal. This merger is more about cost synergies (lowering duplicate costs) than revenue ones (being able to increase prices).
Grow
Scotts Miracle-Gro helps cannabis producers miracle grow pot: a tale of two hustles
When the weed killer is also the weed grower... The green thumb takes on a new meaning. Scotts Miracle Gro stock is up 84% since mid-March, when the lockdown-driven home makeover frenzy took hold. Since decking out the house extends to the yard, Scotts' lawn/garden care sales have surged (pesticides are the rosé of summer gardening):
- Scotts' Miracle-Gro announced that plant soil/food sales surged almost 40% in May on pimp-yo-lawn love.
- Then it boosted its 2020 US sales forecast from 7% pre-coronavirus to 16%-18% after. That's largely thanks to its interesting side hustle...
Side hustle smokes the main hustle... A few years ago, Scotts decided it wanted a piece of the cannabis market (minus the cannabis). Enter...
- Hydroponic systems: Tools for growing plants with nutrient-infused water instead of soil. Hydroponics are used by cannabis-growers to control pot production/quality — so Scotts went ham and acquired 50 hydroponics-related brands. Now...
- Scotts hydroponics-focused Hawthorne division is a market leader and drives growth for all of Scotts.
- Sales high: Hawthorne's sales nearly doubled in 2019, jumped 51% in just the last quarter, and are expected to grow another 45%-50% in 2020.
In the cannabis gold rush, you can be a miner or a shovel-maker... Cannabis producers are the "miners" who take the biggest risk: their success depends on striking gold (cannabis sales). Scotts makes the "shovels". They get a smaller upside with less risk, but enjoy more consistent success along the way — as long as there's still a rush.
What else we’re Snackin’
- Pupper: Sales at online pet supply darling Chewy soared 46% on lockdown pampering/adoptions, but shares fell because expectations were puppy-level enthusiastic.
- Fleeting: Twitter releases "Fleets" in India. The 24-hour stories are also being tested in Italy and Brazil.
- Espresso: Starbucks speeds up its timeline for expanding pick-up and mobile app orders — the corona-conomy cost Starbucks over $3B in sales last quarter.
- Popcorn: AMC shares spike after the world's largest movie theater chain said it expects to fully reopen globally in July (CA restarts movie production tomorrow).
- Zon'd: Amazon bans police use of its facial recognition tech for one year so it can reassess. That comes after IBM dropped the biz entirely.
- Musky: Tesla shares hit an all-time high on word it'll bring the Tesla Semi commercial truck to “volume production.”
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