Apple (casually) just bought 20+ startups

Tuesday, May 7, 2019 by Snacks
_When you have a 12-digit bank account balance_

When you have a 12-digit bank account balance

Yesterday’s Market Moves
Dow Jones
26,438 (-0.25%)
S&P 500
2,932 (-0.45%)
Nasdaq
8,123 (-0.50%)
Bitcoin
$5,693 (-0.56%)
10-Yr US Treasury
2.473%

Hey Snackers,

$250,000.

That's the estimated product placement value Starbucks got for the Westerosian venti cup that (accidentally) landed 3 seconds in a scene from Game of Thrones. Warning: potentially spoiler-ish image from Sunday night's episode in this story.

Markets dropped big on trade war worries Monday morning — Then they recovered on hopes this week's tariff talks between the US and China are still on.

Splurge

1. Apple bought over 20 companies in the last 6 months

nbd... In a weekend CNBC interview, Apple CEO Tim Cook casually dropped this: "So we acquire a company on average, every two to three weeks." He went ahead and connected the mathematical dots for us — Apple has bought 20-25 companies since November by Cook's estimation. And only about 6 of them have been reported on.

With great cheddar comes great responsibility ... Apple is only required to announce acquisitions that have a material impact on its business. None of these smaller ones apparently have. But investors aren't worried about the price, since Apple boasts $225B in cash as of last quarter's finish — There's pressure to spend it on things that will grow the business, or return it to investors as dividends.

THE TAKEAWAY

Apple's using acquisitions to play catch up... Its iPod and iTunes changed music, but Apple fell behind in streaming — So it bought Beats in 2014 ($3B) and Shazam in 2018 ($400M) to catch up. The latest buying spree of tiny companies looks like subtle moves to beef up Siri (she trails Alexa and Google Home in some digital assistant rankings). These 3 specific recent acquisitions sound like Siri-enhancers:

  1. Laserlike: Machine learning — Teach Siri to understand humans better
  2. Silk Labs: AI software — Improve Siri's brain
  3. PullString Voice applications — Improve Siri's hearing
Ads

2. Google might kill "tracking cookies," which could kill its competition

You guys want some cookies?... Google is expected to use today's developers conference to reveal its latest move: Strengthen its online ad dominance. That involves Chrome (its dominant web-browser) and a new button that lets users super-easily block tracking cookies.

  • Cookies (noun): Little bits of code that track what web pages you view and things you click/tap.

They're why that sweater you clicked once follows you everywhere... Digital ad firms use cookie-delivered data to convince companies to buy online ads. Without cookies, these Google rivals could die...making Google's ad sales biz even stronger. Google is expected to frame the move as a user privacy thing, but it could also earn it more of the market.

THE TAKEAWAY

Beware the algorithm tweak... Like those little fish sucking on a shark's belly, some businesses depend completely on a bigger one. Google, Facebook, and Amazon have corporate habitats built around them. The big risk for minnows is that a flick of a switch cuts off their access to customers.

  • Facebook did it with games and for online publishers.
  • Amazon could do it with Sonos' Alexa-powered speakers.
  • Google just might do it with cookies and the ad companies that live off them.
Auction

3. The $38B bidding war for Anadarko's West Texas oil jackpot

It's a rare oil love triangle... Lust, greed, love, and drama included. The oil industry is watching the drawn-out romantic fight between Chevron and Occidental over Anadarko to acquire its "strategic real estate" (more on that to come). Here's the quick play-by-play of the bids and counter-bids to acquire Anadarko Petroleum ("APC") so far:

  • April 12: Chevron offered $65/share ($33B total) to buy Anadarko. APC shares jumped from $46 to $64.
  • April 24: A new suitor, Occidental Petroleum, offered $76/share ($38B) to win APC's on-shore drilling assets, so APC stock popped from $64 to $72 on the sweeter deal.
  • Yesterday: To seal the thing, Occidental upped its offer to include more cash and fewer Occidental shares (same price though overall). APC shares rose to $75 on expectations this one's happening.

It looks like Chevron will lose... But its thirst for more oil still isn't satiated. Investors speculate that one of the other, smaller Texas oil companies could get snatched as the consolation prize, so shares of Pioneer, Concho, and Diamondback have all risen.

THE TAKEAWAY

The prize is a bunch of West Texas land... that's fortunately got an ocean of oil beneath it. Natural resource extraction is a fascinating industry — Who has the sharpest ax, deepest drills, or pumpiest pumps? Anadarko has drilling rights to land in the 75K square mile "Permian Basin" where it's easiest/cheapest to produce oil. And Anadarko's oil straws can suck out millions of barrels of oil worth billions of dollars.

What else we’re Snackin’

  • Retry: Kraft Heinz is re-doing its financial statements since employees made parts of them up
  • Canned: Amazon sued for allegedly firing 7 pregnant women (because they were pregnant)
  • Sprouting: Tyson Foods is Earth's 2nd biggest meat producer (and former Beyond Meat investor) — And it's launching its own plant-based protein this summer
  • PowerPoint: Microsoft's developer conference happened. Here's what it revealed.
  • Sale: Hudson's Bay is sticking the "for sale" sign on retail chain Lord & Taylor
  • Venture: Carta is the software powering VC investments — Now it's a unicorn

Tuesday

Disclosure: Authors of this Snacks own shares of Beyond Meat and Amazon

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