Too political for Twitter

Thursday, October 31, 2019 by Robinhood Snacks | Disclosures

Sorry, your political ad is no longer accepted on Twitter

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Hey Snackers,

Aggressive Halloween move — Molson Coors went full-makeover, changing its name (now "Molson Coors Beverage") and moving its HQ to Chicago.

On Wednesday, Apple's earnings (slower iPhone sales couldn't stop record revenues) and Facebook's earnings ($6B in profits despite fresh scandals) didn't surprise. And the Fed cut interest rates again. So your Snacks team found 2 other stories worth digesting.

1. Twitter bans political ads — a short-term revenue hit for long-term trust

Twitter just banned one of its revenue streams (via tweet)... Bold move. Misinformation (aka lies, false info, and deceptive non-truths) has hit such a level that Twitter's CEO banned political ads on Twitter — his tweet-based announcement also casually trolled Facebook:

  • For instance, it‘s not credible for us to say: “We’re working hard to stop people from gaming our systems to spread misleading info, buuut if someone pays us to target and force people to see their political ad…well...they can say whatever they want! 😉” -- @Jack

Kill misinformation... (except when it comes to politicians). They're Facebook and Twitter's big exception. Both platforms let political leaders post without fact-checking. Plus, they won't remove/flag tweets/posts from politicians even if they're false.

  • Zuck's approach: He doesn't want to referee free speech — a politician lying is in-and-of-itself, news, that shouldn't be censored by Facebook.
  • Jack's approach: But getting paid to expand the reach of misinformation is where Twitter's drawing the line (Facebook isn't into line drawing).

This is straight-up #ShortTermCost cost for #LongTermGain... Jack's leadership on a divisive topic will probably hurt profits before it helps them:

  • Short-term = lost revenues: Twitter won't snag any of the advertising bonanza of 2020 election campaigns.
  • Long-term = gained trust/cred: Twitter can now say it's doing more than Facebook to limit the spread of misinformation, whether it's from a politician or not — and that may earn new users.

Long distance relationship... Europe's Peugeot and Fiat Chrysler are living it. The pair is reportedly merging for $48.8B to create the 4th biggest car company on Earth. Peugeot is French, Fiat is Italian, and Chrysler is American. The 3 surprises from studying this thing abroad:

  1. Peugeot (founded 1810) was the 1st to put solid rubber tires on a gas-powered car.
  2. Fiat (1899) owns a dozen brands, from Maserati to Dodge — but the profit puppies driving its $$$ are Jeep SUVs and Ram trucks, not adorable Italian mini-machines.
  3. Chrysler (1925) is one of Detroit's "Big 3" carmakers, but is now owned by Fiat, which snagged it post-Chrysler bailout/bankruptcy in 2009.

This fulfills a dream... Former CEO Sergio Marchionne’s dream. The godfather of modern automobile strategy passed away last year, but he called shotgun on merging whenever he could:

  • 2004: When Fiat's small cars were losing $1.1M a day, Sergio took over the company as CEO.
  • 2009: He got Fiat on its feet and then took over Chrysler.
  • 2015: He tried (but failed) to merge with GM.

If you ain’t merging, you’re dying... For years, Sergio called on the car industry to consolidate. He predicted and watched car companies go bankrupt in the '08-'09 Recession. He recognized that people stop buying cars mid-recession, so a merged "team" of car companies can better survive. Now Peugeot and Fiat Chrysler can own 1/4 of the European car market. Together.

What else we’re Snackin’
  • Frothed: Starbucks revenues rose 7%, powered by the nitro brews it whipped up over the summer
  • PG: Spotify launches a dedicated "Kids" app with parent-approved playlists
  • Played: Mattel stock rose 14% thanks to love for Barbie and a Korean pop toy
  • ETA: Lyft revenues jumped 63% and it (still) hopes to become profitable (early) in 2021
  • Work: Ford signs 4-year deal with the United Auto Workers union, avoiding GM-esque labor strike
  • Macro: GDP slowed to 1.9% growth the 3rd quarter (down from 2.0% in the 2nd quarter), but that beat analysts' low expectations
Snacks Daily Podcast

Your co-hosts Jack and Nick (we also write this here Snacks newsletter) noticed that fitness startup Mirror just raised $34M to take on Peloton...with a mirror...that teaches you HIIT workouts (for $1,495) — we think it's an acquisition target.


Disclosure: Authors of this Snacks own call options in Spotify.

ID: 999084

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