Tuesday Jul.27, 2021

🚙 Lucid takes the Tesla route

_"Post-luxury" vibes [LumiNola/E+ via GettyImages]_
_"Post-luxury" vibes [LumiNola/E+ via GettyImages]_

Hey Snackers,

When you think you won Olympic cycling gold, but the underdog was way ahead: math Ph.D. Anna Kiesenhofer wasn't considered a threat, until she crossed the finish line without the top contenders even knowing she was in front.

Stocks ticked up to all-time highs yesterday after record earnings from Tesla. Up today: Apple, Microsoft, and Google.

Posted

"Post-luxury" EV maker Lucid just went public – and it wants to steal Tesla's thunder

Lucid dreams... are becoming reality. Luxury EV-maker Lucid hasn't delivered a car yet, but it just went public via SPAC merger, raising $4.5B in fresh funds. Lucid says its cars are "California cool" at heart, with "Silicon Valley tech" for brains (read: computers on wheels). Shares popped 11% yesterday as investors ogled over Lucid's sleek-looking EVs and battery stats.

  • Lucid's first car, "Lucid Air," is on track for delivery this year. Lucid says it has already received 9K+ reservations for the EV sedan, which starts at a California cool $77K.
  • Lucid's battery is expected to last 500 miles on a single charge, a market-leading electric efficiency which would beat the Tesla Model S.

Don't call it luxury... Lucid describes itself as a "post-luxury” pioneer, catering to a new generation that has evolved beyond basic luxury (must be nice). If luxury = Louis bags and Dom Pérignon bottle service, then post-luxury = sustainable cashmere and organic wine retreats in Croatia. Lucid's real business model: replicating Tesla's thunder.

  • Tesla plans: Tesla's first strategy was entering at the high end of the market, then lowering costs as it scaled. Lucid's strategy: “High-end first product," then "progressively attainable vehicles.”
  • Tesla vibes: At first glance, you'd probably think Lucid's cars were designed by Elon. Lucid even says one of its execs helped bring the Tesla Model S to market.

Newcomers have an easier road... It took Tesla nearly two decades to gain Wall Street respect. From 2017 to 2019, Tesla was on the brink of bankruptcy as it tried scaling production of its Model 3. Fast-forward to 2021: Tesla just reported a $1.1B profit and a record 201K deliveries last quarter — 99% of those deliveries consisted of its more affordable Model 3 or Y. Lucid hasn't even delivered a car, but it just became the fourth-most valuable EV stock with a $42B valuation. That's because Tesla proved that "start premium, scale down" can work with EVs.

Peppa

Hasbro’s sales surged last quarter, but toys are only the start of the story

GI Joe goes to Hollywood... Hasbro, the toy icon that makes Monopoly, Jenga, and My Little Pony, is making more than just Monopoly money. Hasbro's sales jumped an expectation-crushing 54% last quarter, and the stock soared 12% yesterday.

  • Classics never get old: Sales of toys like Nerf guns and Play-Doh jumped 33%.
  • Card games go digital: Popular online games like Dungeons and Dragons helped Hasbro more than double its digital gaming revenue.
  • Toys learn new tricks: Hasbro’s entertainment division, which makes kids TV hits like “Peppa Pig,” upped its revenue by 47%.

Toys are movie stars now… Hasbro wants to become an entertainment company so that it can squeeze more bucks out of its toys. Hasbro partnered with Paramount to launch the toy-inspired, $5B Transformers movie franchise. Now it wants to give other toys the Transformers treatment. In 2019, Hasbro bought movie production studio eOne. Now it's developing 200 movies and TV shows, including 30 projects based on brands like Dungeons & Dragons, My Little Pony, and Clue.

Toy biz is becoming show biz… Hasbro’s doubling down on the biggest opportunity in toys: entertainment. By spinning its best-known characters and games into shows and movies, Hasbro hopes to replicate the "flywheel" success of media giants like Disney, whose films, TV shows, and theme parks rely on the same characters. Rival toy maker Mattel, which drops earnings today, has a similar vision: it’s producing 13 movies based on toys like Barbie, Hot Wheels, and American Girl dolls.

What else we’re Snackin’

  • NVM: Insurance giants Aon and Willis Tower Watson called off their $30B merger, a month after the DoJ filed an antitrust suit against the deal.
  • Reverse: Anticipating a sharp rise in Covid hospitalizations, CA and NYC will require public employees to get vaxed —  or face frequent testing.
  • Crackdown: China introduced more regulation for tech companies, from food delivery to ed tech, sending Chinese tech stocks plunging.
  • Timber: Lowe's stock dipped on signs the DIY "House Hype" is easing, after sales boomed during the pandemic.
  • Fashun: Fashion reseller ThredUP snatched up Remix, one of Europe's biggest clothing resellers, to kick off its international expansion.
  • Alt: Chilean food-tech startup NotCo raised $235M from Jack Dorsey and Jeff Bezos to whip up plant-based foods using AI.

Tuesday

  • Earnings expected from Apple, Microsoft, Google, Visa, UPS, Starbucks, 3M, and General Electric

Authors of this Snacks own shares of: Apple, Microsoft, Amazon, and Google

ID: 1737571

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