Thursday Feb.06, 2020

🎶 Spotify acquires its "ESPN"

"_I did not see that acquisition coming!_"

Hey Snackers,

Day 3 of the TBOY Awards is upon us. Last night, WeWork's Adam Neumann took home the TBOY Trophy for Best CEO in a Leaving Role (fugitive Carlos Ghosn was runner-up).

Now we're going international. Join us @RobinhoodSnacks on Twitter to vote for our next category, Best Foreign Firm:

🍺 AB InBev, Belgium: went hard on BudLight seltzer
🎶 Spotify, Sweden: went hard on podcasts
👟 Adidas, Germany: launched Beyonce's line
☕️ Luckin, China: tripled coffee shops, 6X'd revenue

Tesla's epic rally came to an end, but markets soared to record highs. Plus, China announced overnight it'll halve many of its tariffs on US goods. Happy Thursday.

Heard

Spotify acquires The Ringer, adding a big, sporty fish to its pod pond

Primed for pod-ification... Spotify has doubled-down on its podcast offerings. The latest catch: The Ringer — ex-ESPN personality Bill Simmons' podcast network, offering 30 sports pods (+ other topics) and reportedly boasting around 100M monthly downloads. Spotify thinks podcasts are the radio of the future, so it's going in big:

Last year: Spotify shelled out over $400M to buy podcast companies like Gimlet (pod producer), Parcast (original shows), and Anchor (DIY pod recording software).
By December: 500K podcasts were on Spotify's platform.
Today: Its pod-ience (pod audience?) has almost doubled since the start of 2019. More than 16% of Spotify's monthly users listen to podcasts, and that's driving sign-ups for its paid version.
Now: It's using the Ringer to up its sports offerings. Because, you know, sports is kind of a popular topic. "We bought the next ESPN" — Spotify's CEO Daniel Ek.

The results are in... Spotify added a record number of paying subscribers for the quarter (11M), and now has 124M total (271M including its non-paying users). But that pod-ification has also cost it big. It lost $85M this quarter, in part thanks to its costly pod-cquisitions.

This could mean pod war... Apple is #1 in podcasts, Spotify is #2. But Spotify's got a huge lead in paying ears overall with 124M subscribers compared to Apple Music's 60M. The Ringer pods (like most of Spotify's) will still be available on other platforms, like Apple. But someday Spotify might make them exclusive to its app in a gated audio garden — if Apple does the same, it'll be a "choose your side" pod world.

Post

Instagram reportedly makes more ad money than YouTube

Do it for the 'gram... Or for the $20B. Facebook-owned Instagram brought in that much ad revenue last year, according to Bloomberg and PFWTM (people familiar with the matter). That Insta-ad money represents over 25% of Facebook's total revenue and beats YouTube's $15B (YouTube's parent, Alphabet, just revealed its revenues this week).

YouTube: We've all seen (and skipped) the ads before a video. You'd think 2B+ users would mean more ad money for YouTube. Buuut, over half that ad $$$ goes to video creators.
Instagram: Doesn't pay creators because it throws ads between friends' Stories and sprinkles them into your feed. Facebook bought Instagram in 2012 for $1B — but since Facebook's now worth $600B and Insta is 25% of its revenues, the 'Gram is arguably worth $150B now.

The whole family... Facebook doesn't disclose revenue for its individual "children," bundling their financial info instead into their so-called "family of apps."

Facebook: The old parent, always cracking dad-jokes and sharing pictures of ferns and grandchildren.
Instagram: The too-cool-for-school teen child. Super fashionable, always taking Valencia-filtered selfies, and perennially drinking craft coffees while chilling on a white-sand beach.
WhatsApp: The cool, foreign cousin that's always studying abroad somewhere and reading Kant.
Messenger: The distant aunt that you always forget exists but go to when you need some random specific thing.

Focusing on "the family" could be a strategic move... FB's social media dominance is why it's being investigated by the government. Zuck's giant baby could get broken up to restore competition — that could include dropping Insta. Since Instagram generates more ad revenue than NBC, ABC, and Fox combined, Zuck may downplay that alarming fact by keeping Instagram's numbers on the down-low.

What else we’re Snackin’

Snoozed: Casper cuts its (already slashed) IPO price even further to $12/share — that lowers its valuation down from $1.1B to under $500M
Brakes: Tesla shares fell almost 25% from the peak of Tuesday's all-time-high rally
Swipey: Match-owned Tinder made $1.2B last year off people paying for premium Tinder subscriptions (unlimited swipes, more profile views)
LinkedOut: The CEO of Microsoft's-LinkedIn is stepping down after 11 years helping recruiters message you (endorse him for "social networks")
Away: Vodafone, Earth's 2nd largest mobile operator (huge in Europe), will remove Huawei equipment from the core of its mobile networks on Chinese spy worries

Sign up for Robinhood, our commission-free investing app, and get a free stock. Already on Robinhood? You'll still get a free stock for getting a friend to sign up (they'll get one too).

Thursday

Earnings from Uber, Pinterest, Twitter, Estee Lauder, Dunkin' Brands, T-Mobile, Yum! Brands, Fiat Chrysler, Kellogg, and Tyson Foods

Disclosure: Authors of this Snacks own shares of Spotify and Apple

ID: 1082146

Latest Stories

Rani Molla

57m

No, Apple hasn’t cut its Vision Pro production estimates in half

Quite a few news outlets are reporting that Apple thinks it’s only going to sell 400,000 to 450,000 Vision Pros in 2024, compared a “market consensus” of 700,000 to 800,000. They’re all citing a note from Apple analyst Ming-Chi Kuo.

Obviously there’s no question that Apple’s $3,500 face computer will have a limited audience and could be a huge flop, but this also doesn’t seem like accurate news.

The issue is that 1) this 400,000 number isn’t new. Back in July of 2023, the Financial Times reported that Apple planned to make fewer than 400,000 units in 2024, reducing its initial projections of 1M units, citing two people close to Apple and, the Chinese contract manufacturer assembling the device. 2) It's unclear who was estimating 700,000-800,000 Vision Pros in the first place, but it appears that it was Ming-Chi Kuo himself?

Apple reportedly cuts Vision Pro production due to low demand

Seriously, relax

Economy keeps on humming along

Meta exhaustingly tries to merge the metaverse and AI

Gonna have to rename the company... again

Rani Molla4h

Chris Black

Black’s Gold

Can you justify a $335 trashcan? Yes.

Here’s how.

Biden signs a bill that could ban TikTok — but the #ForYou fight is far from over

Jamie Wilde

Read

Gucci’s parent braces for sliding sales, as luxury demand unravels over high prices

Nia Warfield

Read

Matt Phillips

20h

Chipotle continues to go on a tear, hitting a sales record

Hey it might not be the kind of AI stock investors are all hot and bothered over, but don’t sleep on the burrito business.

Chipotle posted much better-than-expected results on Wednesday, with sales rising 14% to a record $2.70B in the first quarter, which is like a billion additions of guac.

Profits jumped 23% to $359M.

Chipotle has quietly cruised higher over the last year. It’s up 63%, compared to the 24.5% gain for the S&P 500 over the 12 months through Wednesday’s close. Not bad for a rice-and-beans based business model.

Rani Molla

20h

Facebook had great earnings, the market hates it

Facebook reported impressive earnings. Record first-quarter revenue thanks to AI! Profit up 117% compared to a year earlier! But at the same time, its capital expenditures are going up and it’s expecting second quarter revenue potentially lower than analyst estimates. So in other words, the future doesn’t look as bright as the present.

All in all the stock is down more than 10%. (Basically the opposite of what happened with Tesla yesterday).

Net net

23h

Earnings can’t stop, won’t stop

Rani Molla

4/24/24

Why Tesla investors are holding on to hope for a cheap car

Despite terrible earnings numbers last night — declining vehicle sales, disappointing revenue and profit, enormous spending — Tesla stock is up more than 10% as of midday. That’s a welcome move for the car company, that’s been among the worst performers this year in the S&P 500.

Why the about face?

While Reuters reported earlier this month that Tesla is no longer making its long-awaited $25,000 mass-market car — news sent the stock, already suffering from headwinds across the EV industry, down even further— Tesla reported during its earnings that it’s going to make cheaper cars than it currently has.

Before the second half of next year, Tesla said it will release “more affordable models” that “will utilize aspects of the next generation platform as well as aspects of our current platforms, and will be able to be produced on the same manufacturing lines as our current vehicle line-up.”

So rather than release the $25,000 Model 2, Tesla is incorporating some of that technology into its existing models. UBS called it the Franken-3Y2.

Spotify’s finally turning its user growth into serious cash flow

Tom Jones, David Crowther4/24/24

The FTC is banning non-compete clauses

Why that might make job switching even more lucrative

Millie Giles, David Crowther4/24/24

Matt Phillips

4/24/24

Hasbro pretty much entirely depends on Magic: The Gathering to make a profit

William Coulman, David Crowther

4/24/24

Thousands of bank branches have closed across America

America has lost thousands of bank branches. The latest closure? JPMorgan’s iconic 45 Wall St. address.

4/24/24

TikTok versus the United States

Casey Newton

Senate Takes Up Foreign Aid Package Passed By House

William Coulman & David Crowther

4/24/24

Not so Gucci

French luxury fashion conglomerate Kering has seen its shares fall ~10% in the last 24 hours after reporting that sales at its flagship brand Gucci had dropped 21% in its latest quarter.

Kering’s other brands, which include Yves Saint Laurent, Bottega Veneta, and Balenciaga, fared slightly better — but the only real bright spot was the company’s eyewear division, where sales rose 24% (9% on a comparable basis).

With Gucci responsible for roughly two-thirds of the company’s profit, the ongoing struggles of the brand are weighing heavily on the bottom line: the company expects recurring operating profit to drop 40-45% in the first six months of the year.

Gucci execs will be hoping that new designer Sabato de Sarno can turn the iconic brand’s fortunes around, particularly in China where demand has dropped precipitously. His designs only started hitting stores in February.