Post-Posh Party
Hey Snackers,
On Monday, stock markets are closed to celebrate the life of civil rights icon Dr. Martin Luther King Jr. There couldn't be a better time to honor his devotion to nonviolence, unity, and equality in America.
Yesterday, Biden unveiled the details of a $1.9T coronavirus stimulus proposal that includes $1.4K checks and boosted unemployment benefits.
PS: We'll be back in your inbox on Tuesday after MLK Day.
Not a Spice Girl... But Posh Spice would be proud. Poshmark is an online marketplace famous for used clothes, from $6 H&M tanks to $1K Louis bags. Yesterday, Poshmark stock made a splashy debut on the Nasdaq — we're getting DoorDash/Airbnb flashbacks.
Thrifty is the new trendy... Like Etsy, Poshmark benefited from the pandemic e-thrifting surge. Sales jumped 28% to $193M in the first nine months of 2020 — and it even managed to turn a profit. From ThredUp, to The RealReal, there's no shortage of places to buy used clothes online. So what makes Poshmark different?
Social commerce's secret power = ad targeting... "Social commerce" sites are prime real estate for marketers because: 1) your engagement reveals your tastes, and 2) you're there to shop. That's partly why Facebook intro'd "Shops" on Insta. The more a company knows about your splurging habits, the more it can personalize ads. If Poshmark started selling ads, it could make significant $$$ from companies looking to target its 32M (mostly Millennial/Gen Z female) users.
Hire more fry cooks... Chip demand is extra hot right now. Ford literally had to shut down a plant this week because it can't find enough computer chips for its cars. Semiconductors are the backbone of electronics, powering everything from your smartphone to your washing mashing. Only problem? We've got a global semiconductor shortage on our hands.
Why so cyclical?... The semiconductor industry is driven by innovation cycles. In order to survive, companies have to constantly churn out new products as they race for the fanciest chip. By the time they've scaled production of the hottest new chip, there's a hotter new chip on the market... and then they have overstock. Meanwhile: chip size has shrunk to less than a nail clipping, while the costs of production have surged.
The industry is consolidating to prep for the next lull... between chip innovations. Chip companies are merging to cut costs, scale faster, and stay profitable (#synergy). In September, Nvidia said it was buying chip designer Arm for a whopping $40B. Then in October, AMD agreed to buy chip maker Xilinx for $35B. And Qualcomm just announced a $1.4B acquisition of a 5G chip startup. In this super high-volume, high-tech industry... you need to stay huge to stay competitive.
Authors of this Snacks own shares of: Delta
ID: 1481425