Friday Jun.14, 2019

The (not-Uber) gig IPO

_"Did someone hail a Fiverr?"_
_"Did someone hail a Fiverr?"_

Hey Snackers,

$49.99 gets you actual ice from the St. Louis Blues' Stanley Cup Game 7 hockey win (update: now water).

Markets celebrated-ish Thursday, boosting stocks despite an explosion in the Gulf of Oman that popped up oil prices.

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Alt

There's now a big alt-meat competitor: Tyson unveils"Raised & Rooted"

"It even lays eggs"... That's the fake final line to Tyson's fake chicken announcement. America's biggest meat company officially rolled out "Raised & Rooted — Nuggets Made With Plants!" It's a direct shot at Beyond Meat, the faux-"meat" pioneer whose stock is enjoying one of the best 6-week starts in history (up 464% since its May 2nd IPO). Tyson used to be an investor in Beyond, now it's imitating it.

It really looks like a chicken nugget... but there's no chicken. It's a mix of pea protein, egg white, bamboo (not just a panda thing), and golden flaxseed. That's the vegetarian option. Its reduce-tarian product is the "Blended Burger," which still has some beef, but it's diluted with some veggie stuff.

Can anyone make meatless meat?... The race is on to whip together some plant by-products in a bowl and somehow make it sticky enough for a respectable burger patty. Here's who's getting in besides Tyson and Beyond:

  • Impossible Foods: Still-private maker of the Insta-famous "Impossible Burger."
  • KFC: The chicken king launched "The Imposter" in the UK on Thursday, a Quorn (fungus-based meat) fillet sandwich that looks like chicken.
  • Nestlé: Just revealed an "Awesome Burger".
  • Campbell Soup: Announced yesterday it plans to somehow take the animal out of bone broth.
Giggidy

Fiverr wants to own the gig economy — and surged 90% on IPO Day

Need new website, logo, and data entry?... Fiverr knows a guy. The “freelance marketplace for the lean entrepreneur” is a platform connecting growing companies with freelancers — Gig workers for 200 categories of services, from SEO to resumé reading/writing (picture Uber, but for graphic design instead of a ride). While shares surged 90% on its IPO, we side-hustled some Fiverr facts:

  • It literally trademarked the word "gig."
  • And it's catching this wave: The US gig economy is growing 3X as fast as the general US workforce.

Fiverr's got 1 career weakness... Benefits. Technically, the freelance writer who Fiverr connects to Startup X to write website copy is an "independent contractor." If new laws and regulations start requiring gig workers to earn full-time employee-style benefits, that could hurt freelance hiring. And Fiverr knows it.

The gig economy is two economies — Not one... Fiverr has focused on creative and professional services, like similar freelance connector Upwork (it IPO'd last year). Uber and Lyft target more functional jobs, from driving cars to dropping off gyros. The existential question: Is there room for multiple middlemen to own these two separate gig economies?

Deals

HSBC became top Saudi Arabia's top investment bank

You are the wind beneath my wings... That's the message from Saudi Arabia to HSBC whenever it needs a big bank, according to the WSJ. Founded in Hong Kong and now HQ'd in London, HSBC is a banking beast (#7 globally). And despite Saudi Arabia's 2018 killing of Washington Post journalist Jamal Khashoggi and its controversial Yemen war, HSBC is standing by.

$65M in banking fees over two years... That's how HSBC is being rewarded for its loyalty. Since the Khashoggi murder, many banks and corporations have cut off business with Saudi Arabia. HSBC has turned its head and opened up its wallet.

  • Investment banking: The Saudi state-owned oil company Aramco (aka the most valuable company in the world) got its bonds structured by HSBC this year.
  • More I-Banking: HSBC helps the government issue bonds — Basically IOUs from the government — to help it handle inconsistent revenue from its giant oil business.
  • Retail banking: After an expected merger, HSBC will own 29% of the 3rd biggest bank for basic Main Street-style banking in the Kingdom.

Higher risk = higher potential reward... Banks are in the business of calculated risks. There are conventional risks and unconventional ones, and HSBC is showing it's willing to take on both to make some $$$.

  • "Credit risk": Banks lend money, taking on the risk they won't get paid back.
  • "Investment risk": They also drop money into startups and new ventures, knowing they might completely fail.
  • "Reputational risk": HSBC is on speed dial with Saudi Arabia, knowing it could be labeled an accomplice to murder in the court of public opinion.

What else we’re Snackin’

  • Committee: Facebook reportedly recruits Visa, Uber, PayPal and others to it's "GlobalCoin" crypto project
  • Sliced: Callaway Golf surges 14% after an activist investor pushes the Big Bertha-maker to sell itself
  • Auction: GE is trying to sell off its portfolio of investments in over 100 startups
  • Devoured: Zume is the robotic pizza pioneer that just bought a plant-based packaging startup
  • Spilled: Oil prices jump 3% after explosions on 2 tankers in the Persian Gulf

Friday

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A couple of days ago, a tweet making fun at McDonald’s hiring a “Manager for Diplomatic Relations” went viral.

At first glance, the idea that McDonald’s, a burger franchise known for its double quarter pounders and perfectly salted fries, is expanding its diplomatic influence with policy makers in Foggy Bottom and the world at large sounds comical. But it’s actually crucial.

There are more than 40,000 McDonald’s locations spread across 115 countries around the world, and 90% of these stores are independently owned and operated franchises that pay royalties to the parent organization to operate. Tens of thousands of franchises operated by different owners with different beliefs, priorities, and values can get complicated, fast.

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As we noted in Snacks in February, McDonald’s received heavy backlash from franchisees in countries including Saudi Arabia, Oman, Jordan, Kuwait, and Pakistan after McDonald’s Israel donated thousands of free meals to IDF personnel. But it wasn’t McDonald’s, as an entity, that made the donations. It was the owner of the company’s Israel franchises, who was acting under his own volition.

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These apps had only been available through VPNs but were popular nonetheless, according to the Wall Street Journal.

Apple said the Chinese government asked them to remove the apps in the iPhone maker’s second biggest market over “national security concerns.” Last week, China told its state-owned telecoms to phase out the use of US chips by 2027.

Exclusive | China Orders Apple to Remove Popular Messaging Apps

Exclusive | China Orders Apple to Remove Popular Messaging Apps

Apple said the Chinese government asked them to remove the apps in the iPhone maker’s second biggest market over “national security concerns.” Last week, China told its state-owned telecoms to phase out the use of US chips by 2027.

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Tesla's recall reveals just how bad Cybertruck delivery numbers have been

Thanks to a recall of Tesla’s Cybertrucks, we now know how many of them have actually been delivered: 3,878 since the EV company began releasing them to customers in November.

In its third and fourth quarter earnings report, Tesla said that its current Cybertruck production capacity was greater than 125,000 a year. Musk had previously said he expected to produce 250,000 Cybertrucks a year by 2025.

Either way, that’s a lot more than the roughly 775 it’s delivered each month so far.

The recall is over an issue with the gas pedal pad that, the National Highway Traffic Safety Administration says when pressed, “may dislodge, which may cause the pedal to become trapped in the interior trim above the pedal.” The cause of the issue: “unapproved” soap that the manufacturer used to aid in getting the pad on the pedal.

A Cybertruck customer this week posted a TikTok about a terrifying incident in which this happened and “held the accelerator down 100%” in his 6,000+ pound vehicle. Thanks to some quick thinking where he held down the brake and put it in park, he wasn’t injured.

This is the long-awaited Cybertruck’s second recall since it came out five months ago.

Tesla recalls the Cybertruck for faulty accelerator pedals that can get stuck

Tesla recalls the Cybertruck for faulty accelerator pedals that can get stuck | TechCrunch

Either way, that’s a lot more than the roughly 775 it’s delivered each month so far.

The recall is over an issue with the gas pedal pad that, the National Highway Traffic Safety Administration says when pressed, “may dislodge, which may cause the pedal to become trapped in the interior trim above the pedal.” The cause of the issue: “unapproved” soap that the manufacturer used to aid in getting the pad on the pedal.

A Cybertruck customer this week posted a TikTok about a terrifying incident in which this happened and “held the accelerator down 100%” in his 6,000+ pound vehicle. Thanks to some quick thinking where he held down the brake and put it in park, he wasn’t injured.

This is the long-awaited Cybertruck’s second recall since it came out five months ago.

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That’s up 158% since the start of the year, and over 4x on the typical prices seen in 2022 — as crop production continues to fall short of demand.

Major cocoa-producing nations like the Ivory Coast and Ghana, which between them grow about two-thirds of the world’s cocoa, have seen excessive tree failure due to disease, changing weather patterns, and hot, dry conditions causing devastating droughts.

As such, consumers are starting to see the effects of the largest cocoa supply deficit in over 60 years: “shrinkflation” and reduced-cocoa recipes might soon hit your favorite chocolate bars, and Hershey stock was recently downgraded. Unfortunately, the worst may still be yet to come: the International Cocoa Organization expects production to lag behind demand by 374,000 tons for the 2023-24 season.

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For the record, that’s the 18th straight year the penny’s face value has been below production costs, fueling calls for abolishing the lowest value denomination coin. Canada started to phase out the penny in 2013, joining Australia, Brazil, Finland, New Zealand, Norway, and Israel, according to Smithsonian Magazine.

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Netflix is going to stop sharing subscriber numbers

After posting subscriber numbers that beat expectations today, Netflix says it’s no longer going to share those numbers starting in the first quarter of 2025. That’s a big deal since subscriber numbers have long been one of the main metrics that investors have looked at.

“In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential,” its shareholders letter read. “But now we’re generating very substantial profit and free cash flow.” The company said that it will focus on revenue and operating margin as its main financial metrics, while it will look at time spent on the platform to gauge customer satisfaction.

Another way to read this? They’ve hit market saturation and just aren’t going to be growing that much anymore, and they thought they’d end on a good note. Going forward they’re focusing on how to get more money out of the customers they do have.

They’re doing so by cracking down on password sharing and charging for extra members. They’re also pushing people to ad tiers, which are more profitable than non-ad tiers.

“Scaling ads to become a more meaningful contributor to our business in ‘25 and beyond,” Netflix said.

Netflix’s ads membership grew another 65% in Q1 over the previous one, after rising 70% the quarter before, and 40% of signups in ad markets continue to be for those ad plans.