Thursday May.13, 2021

🦄 SoftBank's (Google-status) profit

_SoftBank's unicorns emerging from the valley [Helen Alderton/Moment via GettyImages]_
_SoftBank's unicorns emerging from the valley [Helen Alderton/Moment via GettyImages]_

Hey Snackers,

TikTok is reportedly testing a LinkedIn-esque job service for Gen Z. Core competencies include slaying the Renegade dance challenge.

Stocks posted their biggest three-day drops in nearly seven months, as investors continue to stress about inflation. Consumer prices jumped 4.2% in April, the biggest year-over-year increase since 2008.

Boom

SoftBank's profit hits a national record, thanks to IPO-Palooza (but it's not cashing in)

Started from the valley, now we here... SoftBank is the Japanese tech and telecom investment giant behind companies like Uber and Alibaba. A year ago, SoftBank posted a record-shattering $18B loss for its techy Vision Fund, as the value of its Uber and WeWork stakes plunged. SB's precious unicorns were (literally) falling into the "Valley of Coronavirus" (see: slide 50). Now...

  • Softbank posted a record $46B profit for its 2020 fiscal year, the highest ever for a Japanese company.
  • That's double the previous record set by Toyota — and $5B more than Google's 2020 profit. Whoa.

“Producer of Golden Eggs”... how SoftBank describes itself in its iconic decks. During IPO-Palooza, a few of SoftBank's biggest fund unicorns made splashy public debuts. As their valuations soared, so did SoftBank's investment gains (at least, on paper). As of March, its $100B Vision Fund had racked up $57B in gains — 84% of which were unrealized (SoftBank didn't sell its shares).

  • Coupang (aka: the Amazon of South Korea) had the biggest US IPO of the year in March. SoftBank gained $24B from its 40% stake in the ecomm giant, which just reported strong quarterly sales.
  • DoorDash, now SoftBank's third-largest Vision Fund winner, had a monster December debut. It started trading at nearly double its IPO price (but has fallen since).

SoftBank is going long... on tech (see: 300-year plan). Instead of selling shares, SoftBank is holding... and adding. Despite recent shakiness in the market, SoftBank is doubling down on tech investments — and shifting away from telecom. It tripled the amount of capital it has pledged to its second techy Vision Fund (which includes Cameo and Didi Grocery). Meanwhile, SoftBank has sold billions worth of T-Mobile and Sprint shares.

Partay

Party City stock soars as Zoom celebrations decline (and its balloon-obsession grows)

The Walmart of matching paper cups... and throw in some Baby Yoda napkins. Your #1 destination for birthdays, Mardi Gras parties, and last-minute Halloween costumes has survived the Zoom celebration era — and it's not just scraping by.

  • Party City stock has soared 20% this week on expectation-beating earnings. January to March sales jumped 3% from 2020, and it's even projecting a profit this quarter.
  • Revenge Celebrations: As the vax rollout continues and the economy reopens, more people are ready to "revenge" spend, travel, and celebrate... in person. Party City = epitome of the Revenge Economy.

Don't pop it... Party City has one important goal that's critical to its growth strategy: "win in balloons." After surviving the helium shortage of 2019, PC became obsessed with balloons "as a key driver of our differentiated brand experience."

  • Happy 30th: PC brought "innovation" to its balloon biz, launching online-ordering, curbside pickup, and delivery of "balloon bouquets." Think: Insta-worthy birthday creations (your age is floating).
  • Happy Anything: With reopenings picking up, Americans are eager to celebrate. And PC believes there's no shindig without helium-filled plastic.

Party City found a product to cure "seasonality"... For many companies, sales fluctuate predictably around the same time(s) each year. Think: boosted retail sales during Christmas (@CanadaGoose), and spiked seltzer sales in the summer. Party City is prioritizing balloons because they can be sold for all occasions (unlike Halloween costumes and July 4th decorations). Party is turning its stores into helium hubs because it wants to celebrate all year round — from the grad party, to the random reunion brunch.

What else we’re Snackin’

  • Vax: The CDC recommended Pfizer and BioNTech's Covid vaccine for 12- to 15-year-olds, expanding the rollout campaign.
  • Greenlon: Elon Musk said Tesla will stop accepting Bitcoin for car purchases, citing carbon emission concerns.
  • Gas: President Biden signed an exec order to strengthen US cybersecurity post-Colonial Pipeline hack (BTW: it restarted operations yesterday).
  • Success: Bumble crushed quarterly earnings expectations. Sales more than doubled, and it posted a profit (compared to a loss in 2020).
  • Again: Facebook is revamping its digital currency project "Diem" (FKA: Libra), to address regulators' money-laundering concerns.

Thursday

  • Earnings expected from Disney, Airbnb, DoorDash, Coinbase, Rakuten, and Alibaba
  • Weekly jobless claims

Authors of this Snacks own shares of: Tesla

ID: 1646968

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