Hey Snackers,
March Madness. Cherry blossoms. Marshmallow Peeps. IPO-palooza. All just kicked off.
And driven by Friday's Lyft-off, markets rose all last week — That makes 2019's 1st quarter the best one since '98.
The Uber for drivers... Now with 39% of the ride-hail market (doubled from 2016), Lyft jumped 9% on its first-day trading Friday, raising its valuation to $27B. The co-founders (FYI, they own 5% of the shares, but 49% of the voting rights) rang the bell from a former car dealership in LA — Not NYC's Nasdaq stock exchange. It's a vehicular metaphor for its un-Uber strategy: Happy drivers = Happy riders. That lot will become a "Driver Center" for car repairs and tax support.
Man-leisurewear... First, it made yoga pants brunch-ready. Now, it's conquering the work wardrobe. For guys. Lululemon revealed 2018 was one of its strongest years, yet. Then shares soared 14% last week on the CEO's goal for gender parity in its sales (starting with stretch-khakis).
5G drama... America's worried that China's government can spy through Huawei's smartphones. Suspicion hasn't stopped it though — The Chinese telecom's profits jumped 25% last year to nearly $9B. Countries that aren't the US just want their 5G network future to come fast and at a low-cost, and Huawei's answering their calls.
Sleep in a box... Physical goods startups don't usually earn invites to the unicorn ranch. But Casper Sleep just joined all the $1B-valued apps with its latest fundraise, and we learned its sales are growing 60% per year. It even thinks 2019 will be its 1st year of profitability (and it's interviewing investment bankers to run its future IPO).
Pump the house music... Spotify dipped before the weekend on analyst concerns about Mom and Dad's music taste — American families want family plans ($14.99/month), not a bunch of individual ones ($9.99). That trend simply sounds less profitable for the music streamer.
Chaise, you've been demoted to chair... Restoration Hardware (AKA "RH") fell 22% because December's tough stock market psychologically affected its high-end furniture buyers. The CEO is confident though that his lavish plan to aggressively renovate and upgrade their mansion-sized stores (its NYC "Gallery" cost $50M to build) will fix "retail's lost decade." We dived into his unique strategy on our pod.
A really, really big poke... Facebook banned white "nationalist" and white "separatist" content last week (it's already been removing white "supremacy" content from the world's walls). But then the US government sued it for allegedly discriminatory housing ads. Now Zuck's asking Congress to write "new rules for the internet" so the social network doesn't have to.
Bundle my bundles... Apple splashed into gaming, premium news, and TV subscriptions for its biggest non-iPhone unveil yet. But shares ended the week down since it was so light on the how-much-will-this-cost-us-a-month details.
BBM is dead. Long live BlackBerry... The iPhone victim quit making its own smartphones in 2016. And on Friday, shares jumped after BlackBerry beat expectations with 9% quarterly sales growth. But it was words from the CEO that made the stock win: "We're done rebuilding. We're looking to invest."
The Batman of tech... Under new CEO John Chen, BlackBerry pivoted to become a "security company" — A watchful guardian for big business and government. It's designed cybersecurity services to stealthily protect your digital life:
Services are the new black... Selling electronic gadgets includes expensive manufacturing and fickle consumer tastes. The software business model can be less costly and more scalable, with recurring monthly money coming in. And Apple's pulling the same move — With iPhone sales down, it's nudging you to Apple Music/TV+/News+ (AKA, monthly subscriptions).
Living its best life... The S&P 500, a wide-ranging index of publicly traded companies, jumped 13.1% over the last 3 months — Cue the Best Quarter Since '09 and Best 1st Quarter Since '98 trophies. The thing is, markets still haven't climbed out of the brutal hole from the end of last year.
There are so many people I need to thank... Politics — including January's government shutdown, the US/China Trade War, and Brexit — isn't on the list. Neither is the US economy, which has been slowing down (America's 2018 GDP was just retouched downward). It was all markets:
It's perfect weather for an IPO... There are a bunch of companies eager to go public in 2019, especially now that investors are feeling good again. Lyft squeezed itself in on the last day of the quarter, and its Silicon Valley tech buddies are lined up ready to go too. We'll see how the dump of fresh stocks onto Wall Street affects the market as a whole.
Disclosure: The author of this Snacks owns Lululemon shares.