Hey Snackers,
On Friday, you tried to open Spotify for a weekend playlist. When that didn't work, you went to Pinterest for quarantini inspo. When that didn't work, you turned to Tinder as a final resort, but that crashed too. Turns out, it was all because of... a Facebook glitch (it's all connected).
In markets: The tech-heavy Nasdaq surged 4% as the US set record high COVID cases — because social media, ecommerce, and cloud computing are all lockdown-friendly.
On our pod: The “SoulCycle of fertility” just raised $32M to make egg freezing happen cheaper. Tune into our highly snackable pod to hear how Kindbody is using the fresh cash for its "Little Sister" expansion strategy.
"How to become YouTube vlogstar"... Every TikTok stars' Google search last week after millions of like/view counts suddenly went to zero. TikTokers thought it was the first sign that their precious app had been banned. It was a glitch, but their fears are far from unfounded. The viral video app is owned by China-based Bytedance, the most valuable private startup in the world (~$100B). Before we dig into TikTok's possible demise, let's recap the impressive rise:
Clock's TikToking... Security concerns around TikTok's ties to China are heating up. The US already bans employees of many government agencies (like the Army) from having TikTok on work phones. Last week, Wells Fargo told employees to remove it from company devices. Amazon did the same, then weirdly backtracked. Also:
TikTok has big US market influence... despite being a non-public, non-US company. Its explosive growth has major implications for American media. It's the biggest threat for disrupting social giants like Facebook, Snap, and Twitter. It contributed to Quibi's flop. And recently, it's been trying to appeal to the American gov: it brought on a former Disney exec as CEO and is considering adding a non-China HQ. But more TikTok bans could be coming — that would significantly reduce competition for US media companies.
Turn me on with your electric wheel... Electric vehicle startup Rivian raised an astounding $2.5B in its latest funding round — without ever having released a single product. Rivian wants to be the 1st to bring all-electric pickup trucks to roads and it's developing 100K electric delivery vans for Amazon (ETA 2021). Producing all these EVs is capital-intensive — so investors have poured in $5.3B since 2019 (about 1/2 the value of Lyft).
Bezos sweating over $21... Walmart stock jumped 7% on a report that it's shipping a $98/year rival to Amazon Prime this month. Creatively-named Walmart+ perks include: same-day and 2-hour grocery delivery, product deals, and gas discounts. Walmart is the US grocery leader, but half its top-spending families now have Prime memberships. Walmart doesn't want to lose them to Amazon — it's hoping this perk-filled subscription will secure long-term grocery loyalty.
More turbulence ahead... United shares plunged on news it may have to furlough almost half its US workforce, despite the billions of federal funds it received. Airlines that took $25B in federal payroll support aren't allowed to furlough, lay off, or cut pay until Oct 1 — United's holding off until then. But it's now burning through $40M a day on high costs and near-zero sales (American and Delta feel the pain, too). October layoffs could be on the horizon.
Blame the $2 hand sanitizer... Walgreens lost $1.7B last quarter — bummer, since it made $1B during the same quarter last year. The shift to sales of less-profitable items (like TP vs. prescription meds) and higher labor costs (like extra sanitizing) contributed to the huge profit decline. Now Walgreens is cutting 4K jobs. But it's also making a $1B investment on a big bet: in-store doctors offices. Walgreens is splurging on a 30% stake in a medical startup to get you in for checkups (even when you're just trying to grab Doritos).
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Disclosure: Authors of this Snacks own shares of Amazon and Spotify
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