Oops, Instagram did it again

Wednesday, November 13, 2019 by Snacks
_Instagram wants you doing this on Instagram_

Instagram wants you doing this on Instagram

Yesterday’s Market Moves
Dow Jones
27,691 (+0.00%)
S&P 500
3,092 (+0.16%)
Nasdaq
8,486 (+0.26%)
Bitcoin
$8,766 (+0.50%)
10-Yr US Treasury
1.917%

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Copy

1. Instagram unveils Reels, its TikTok killer

The 1 billion download club... Big number, tiny membership. TikTok just got there faster than any company — just 2 years (that makes the 8 years Instagram needed look like a crawl). If you've never TikTok'd (we haven't either) here's what you should know:

  • More raw, less polish: Instagram is for the polished life milestone like graduation day pics. TikTok is for sharing raw videos of yourself trying to karaoke Levon the night before graduation.
  • Music-first: TikTok is where 2019's megahit "Old Town Road" got huge before radio even knew it.
  • Gen Z is addicted: Over 60% of US TikTokers are under 24 — and they spend 52 valuable minutes per day on TikTok, flipping between videos.
  • It's Chinese-owned: Which is causing squeamishness from US Senators worried that kids' data could get snatched by the Chinese Communist Party.

TikTok's also a threat to Zuck... User-wise, TikTok is shockingly as big as Facebook's Instagram. The last company that threatened Insta's user growth was Snapchat — so Facebook copied its core feature with "Stories." It's doing it again with TikTok, yesterday unveiling "Reels:" 15-second music-videos users make of themselves, then pop into their story. It starts in Brazil, but is expected to rollout worldwide.

THE TAKEAWAY

American companies knockoff Chinese innovation, too... Facebook might as well have called this "DikDok" -- it's a straight-up copy of TikTok's core feature, a defensive move to prevent users from leaving Zuck's apps. It's usually the other way around, but this Chinese-invented social media platform is getting duplicated by America's king of social media.

Half-and-Half

2. America's biggest milk company files for bankruptcy (don't just blame Millennials)

Best before 11/12/2019... Milk legend Dean Foods lost its CFO and CEO in the last 6 months. The stock's fallen from $22 in 2016 to just 80 cents. And yesterday it filed for bankruptcy because it can't afford to pay worker pension plans. Depending on a judge's decision, Dean could reemerge from bankruptcy and keep operating. But it's got larger lactose-induced problems.

Got customers?... Barely. Dean's 58 manufacturing facilities and utter-full employees pump out the dairy for Friendly's ice cream, TruMoo chocolate milk, and other local cartons. But non-dairy has hit America's biggest milk company hard, dropping Dean's sales by 38% over the last decade.

  • Almond, oat, soy, cashew, hemp, coconut, quinoa, rice, pea. They've all got their own milks now (smaller environmental impact, potentially healthier).
  • Plant-based milk sales rose 6% in the last year while dairy milks dropped 3%.
  • Now plant-based milk soaks up 13% of the entire milk category.
THE TAKEAWAY

Don't just blame Millennials... (can't condemn us for everything). While every headline covers how oatmilk latte love slurped up Dean Foods' sales, the company also recently lost a major customer: Walmart. Last year, Walmart started processing its own milk instead of relying on Dean's brands. That's a huge loss for Dean that gets less attention than plant-based-palooza.

Record-breaking

3. Alibaba's Singles Day sets insane records, but the stock barely moves

11.11... Look at those 4 single numbers. They represent November 11th and casually embody China's extravagant annual spending bonanza holiday. "Singles Day" reminds us of treat yo' self day from Parks and Rec, except China's biggest ecommerce company, Alibaba, is intimately involved.

  • $38B: That's how much Alibaba's online shopping platform and physical shopping partners sold within 24 hours.
  • $5.8B: That's how much (little?) Amazon Prime Day brought in by comparison — Alibaba doubled that in just the 1st hour of Singles Day.
  • Snacks Sidenote: Taylor Swift ironically sang "You Need to Calm Down" at Alibaba's Singles Day kickoff. She also performed at Amazon's Prime Day.

It's a trade-war-free celebration of Chinese economic might... Alibaba includes American brands like Nike, Estée Lauder, and even Kim Kardashian's KKW Beauty on the shop-fest. But an Alibaba exec's quote about Singles Day shows its symbolism for China:

  • "We are helping Chinese consumers upgrade their lifestyles..." = China is an economic power and its citizens should celebrate by spending on Chinese platforms.
  • "...while introducing new users to our digital economy from across China and around the world" = Other countries should recognize that China's tech, ecommerce, and retail are legit.
THE TAKEAWAY

Stock prices move when unexpected things happen... Monday morning, Alibaba's stock was down despite news of the insane sales numbers (on Tuesday, it was still down from Friday's close). It's because investors expected Alibaba to set a record Singles Day.

  • When stocks tend not to move: When something happens that was broadly expected to happen (like another Alibaba's Singles Day record).
  • When stocks tend to move (sometimes by a lot): When something shocking happens at a company. Positive surprise headlines usually lead to stock price increases, and bad surprises tend to lead to stock price drops.

What else we’re Snackin’

  • Fees: JetBlue is the latest airline to try a "Basic Economy" option, aka an incredibly restrictive fare so get ready to pay-up for basic rights
  • $$$: Facebook whips up Facebook Pay — an uncreatively named fee-free way to send money to buddies
  • Stream'd: HBO's former exec who made Game of Thrones a thing is in chats to join AppleTV+
  • Frowning: SmileDirectClub drops 8% after its first ever earnings report as a public company
  • Blueprints: Tesla's next car factory will be built...outside Berlin
  • Out: Juul fires 650 employees as part of its seriously large $1B cost-cutting moves

Wednesday

Disclosure: Authors of this snacks own stock of Tesla, Alibaba, Amazon, and options of SmileDirectClub

ID: 1010657

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