Hey Snackers,
Some positive employment news: the Supreme Court issued a landmark decision protecting LGBTQ workers from employment discrimination. The Supremes ruled 6-3 that it's illegal under the 1964 Civil Rights Act. Happy Pride Month.
Stocks rallied Tuesday on a record jump in US retail sales, which soared 18% in May — but that's compared to April. When the economic plunge is record-breaking, the record-breaking monthly comebacks come easier. Compare this May to May of last year and spending was actually down 6%.
"You are the Apple of my eye"... Apple to its own apps. Apple's App Store is a massive marketplace for the world's scrolly-tappy desires. But in addition to owning that marketplace, Apple also competes in it with its own apps: Apple Maps, Books, Podcasts, etc.
Silicon Valley dominates Europe's scrolly-tappy ways... The EU hates that Apple, Facebook, Google, and Amazon are making bank off hundreds of millions of European users — without really paying any European taxes. And it hates the home-court advantage:
This is a wider "platform-player" issue... The EU is investigating other American tech giants too, saying they're abusing home court advantage on their own platforms. BTW — the US government is also running its own antitrust investigations. Platforms like the App Store have created an explosion of opportunity and wealth, but they seem to be playing favorites.
Everybody hertz... But Hertz didn't cry when its stock inexplicably soared after its bankruptcy announcement. The airport rental car classic was hurting pre-corona, thanks to competition from peers like Enterprise and ride-hailers. Then came this head-scratching timeline:
Lenders get paid first... The "absolute priority" rule in bankruptcy means that creditors (whom Hertz is indebted to) must get back the money they lent before shareholders get a penny. That's why Hertz had to warn potential buyers of its new stock that they will likely lose all their money.
Investors aren't always rational... So stocks don't always move in sensical ways. People traditionally buy because they believe a company will generate greater cash flows in the future (and so, they believe, share prices will rise). But stocks also rise for reasons unrelated to actual/future value: if there are more buyers than sellers, a stock's price rises. The "buying reason" — whether that's thoughtful investment analysis or straight up speculation — still affects the stock's movement either way.
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Disclosure: Authors of this Snacks own shares of Apple and Square
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