💃 Facebook gets GIPHY with it

Monday, May 18, 2020 by Robinhood Snacks | Disclosures

Gettin' GIPHY Wit It

Last Week’s Market Moves
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10-Yr US Treasury

Hey Snackers,

"Life should be lived"... Elon Musk's metaphysical message, tweeted alongside a photo of a massive ice cream sundae in a martini glass. Some assumed Elon musk have been out celebrating the reopening of Tesla's Bay Area factory. Turns out the photo was taken by a food blogger... in 2017... at Buca di Beppo. Happy Monday.

Markets ended the week down on a record drop in retail sales, rising trade tensions with China, and over 36M unemployed Americans in two months. On Friday, the House narrowly passed another $3T coronavirus relief bill, which includes a 2nd round of checks for Americans — but the bill is expected to be blocked by the Senate.

On the pod: McDonald's 59-page guide to reopening — we jumped into it on our 15-minute Snacks Daily podcast (everyone deserves a happy meal right now).

1. Facebook buys GIPHY, cementing control over the spirit of social media

The "G" is hard... Mark Zuckerberg must have been blasting Will Smith's 1997 banger as he signed the papers to acquire GIPHY for $400M. The GIF-sharing platform will join Facebook as part of Instagram — its library of LOL-inducing moving images will be more deeply integrated into Insta as well as FB's other apps. FYI - GIPHY won't get banned from non-FB apps, like Twitter and Slack.

  • Ever wonder where all those GIFs come from? They're born in the GIPHY website — hundreds of millions of users contribute to this library with billions of looping vids.
  • GIPHY doesn't own the rights to the vids used in GIFs, so it makes money by showing sponsored results to searches (you search for "funny cow" and get a Dairy Queen GIF).
  • Experiment: Try searching for a "Lip Gloss" GIF on Instagram DM — A glossy mouth with Maybelline branding comes up as a top result.

What's in a GIF?... While FB says it acquired GIPHY to help people better "express themselves," 50% of GIPHY’s traffic already comes from Facebook's "family of apps" (Facebook, Instagram, WhatsApp, and Messenger) – 25% of that traffic comes from Insta alone. So it's gotta be something else...


GIPHY is the secret sauce to Facebook's ad-reliant burger... Facebook and GIPHY are free, but make money by promoting sponsored content — Facebook does ad sales on a ginormous scale. By making GIFs a more prominent part of its apps, Facebook can make more $$$ from GIPHY's brand partners by exposing them to its 2.5B+ users.

  • GIPHY could be Facebook's Trojan Horse into every social and messaging platform: GIFs are already so ingrained into popular culture that FB's competitors can't drop them.
  • It's actually in Facebook's interest not to ice out competitors from GIPHY: Say you search for a "burger" GIF on Twitter — Facebook could potentially get paid to have In-N-Out be the top result fetched from GIPHY's site.

  • Hit me with the "high" puns... Aurora Cannabis stock soared 70% after the Canadian pot producer reported higher-than-expected quarterly sales — it was Aurora's biggest daily gain (ever). Aurora really needed a good hit, especially after its stock nearly crashed over '18 and '19. After losing almost $1B in the previous quarter, Aurora cut costs and was able to beat its comedown — sales jumped 18% compared to last quarter.

  • Make Lululemonade... Despite its 400+ closed stores, Lululemon found zen in the corona-conomy — 33% of its sales were happening online before lockdowns, so going 100% ecommerce didn't make it break a sweat: online sales tripled compared to April 2019. Lulu's products happen to be season-less and stay-at-home versatile (we call it Work-leasure). Under Armour and Nike stocks are both deeply down this year — Lulu is up almost 6%.

  • Don't push your luck(in)... Luckin Coffee faked its 2019 sales numbers by $310M (#FakeBrews) — so shares have been halted from trading since April when it plunged 80% on the fraud. Yet it still opened 10 stores every day last quarter. And it's pivoting: The techie coffee chain is becoming a digital convenience store, now selling lifestyle products from sanitizing wipes to beauty masks in the app — seems random, but random add-ons to apps are more common in Chinese tech.

  • Cult classic movie Office Space... may become a historical fiction. Last week, Twitter announced it's giving employees the option to WFH forever. But companies that rely on you coming to the office — aka the "Work from Work" — could lose big if permanent WFH becomes a trend. JP Morgan and Morgan Stanley both said it's highly unlikely that all employees will return to offices post-corona. Commercial real estate giant CBRE's stock fell nearly 13% for the week, while Office Depot is planning store closures and 13K job cuts by 2023.

What else we’re Snackin’
  • Read: 10 great reads for the "armchair traveler" — because your mind doesn't need a facemask and Purell to explore the world.
  • Eat: Why making time for a midday lunch break matters now more than ever (no one wants to hear your salad on the Zoom).
  • Connect: 10 CEOs and founders on how they combat loneliness (because it's lonely at the top — but it's lonelier in quarantine).
  • Bake: How to bake the latest Tik Tok-sensation, "Frog Bread" — who knew wheat flour could be so toad-ally adorable?
  • Learn: How to approach analyzing a stock when picking an investment (it's kind of like buying a car).
Snacks Daily Podcast

That McDonald's where you picked up your drive-thru McFlurry is probably not owned by McDonald's — 93% of MickeyD spots are owned by small biz owners.

Those thousands of franchisees just received a 59-page guide to reopening for dine-in, straight from McDonald's corporate (spoiler: lots of soap).

Snacks Daily is a top-100 podcast on Apple — listen in to learn how big first movers are defining what's normal in our post-COVID economy.

This Week

Disclosure: Authors of this Snacks own shares of Slack, Twitter, and Luckin Coffee (😢)

ID: 1189253

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