🚁 GM's futuristic show

Thursday, January 14, 2021 by Robinhood Snacks |
_The electric plot thickens_

The electric plot thickens

Yesterday’s Market Moves
Dow Jones
31,060 (-0.27%)
S&P 500
3,810 (+0.23%)
13,129 (+0.43%)
$36,361 (+5.42%)

Hey Snackers,

This man is two failed password attempts away from losing $220M worth of bitcoin forever. And you were stressing over iCloud passwords.

Yesterday, Trump became the first president to be impeached by the House twice. Stocks didn't react. But this means a Senate trial is next – and Trump could be banned from holding office again.


1. GM shares hit a record high on a futuristic delivery vision

Straight outta CES... GM stock hit an all-time high after the Detroit OG unveiled some not-so-OG projects at the Consumer Electronics Show. The real bright spot was BrightDrop, a new unit focused on all things electric delivery — from EVs to route optimization software. GM is pitching it as a one-stop-shop for delivery fleets. Here's what BrightDrop's dropping in 2021:

  • "Electric pallet": The EP1 is basically a techy container with wheels. It moves packages over short distances (think: from delivery van to your door).
  • Electric van: The zero-emission EV600 gets 250 miles per charge, and is designed to load/unload EP1s. FedEx has dibs on the first 500.
  • Not for 2021... GM unveiled insane-looking designs for flying taxis and self-driving shuttles (feat. scissor doors).

If you’ve got the battery... you've literally got the power. GM's getting it from its next-gen battery system, Ultium. It's as intense as it sounds: GM says Ultium gets up to 450 miles per charge, at nearly 40% less cost than its current batteries. GM has spent billions to make Ultium the base for its future EVs, like the GMC Hummer EV pickup. This new BrightDrop van will be the first commercial vehicle using Ultium.


Investors want a story... and now they're buying GM's. Tesla's story — "accelerating the world's transition to sustainable energy" —  gets investors going (it's provocative). GM is a 113-year-old company known for trucks built "like a rock." But now that it's investing $27B in electric and autonomous vehicles, the story has transformed. The new narrative: an “all-electric vehicle future," complete with zero-emission delivery ecosystems. The record stock price = investors' seal of approval.


Sooo, what's a routing number again?... Plaid is the "financial bouncer" that you don't see, but you've probably used. It connects your old school Citi or Chase bank account to fintech apps like Venmo, Square, and Robinhood. Plaid grabs your bank account login info, verifies it, then links it — all without those pesky routing/account numbers.

Sounds cool... Visa thinks so, too. A year ago, Visa announced it would whip out its card to buy Plaid for $5.3B. Visa's strategy: keep your friends close, and your (potential) enemies acquired. The Department of Justice, which prides itself on crushing monopolies, wasn't feeling the vibe.

  • Two months ago, the DOJ filed an antitrust lawsuit saying the merger would limit competition in the payments industry.
  • Now, Visa and Plaid are canceling their merger plans because they don't want to deal with a lengthy lawsuit.

This could be a blessing in disguise for Plaid... Since Visa announced the acquisition plans, Plaid's customer base has soared 60% to 4K companies. Consumers have flocked to digital payments and online banking during the pandemic — and Plaid is the "plumbing" that connects them. It's possible Plaid's worth even more now than Visa was planning to pay. And it's likely that there's a lot more room for growth.


Build me up, build me up... buttercup KB. KB Home is kind of like the Chipotle of homebuilding — instead of build-your-own-bowl, KB lets you build-your-own-home (guac's still extra). From September to November, KB's signed purchase contracts soared 42% to the highest Q4 total in 15 years. And more than half of homes delivered went to first-time buyers.

Life-size Barbie Dreamhouse... and Jerome Powell is the Ken doll. The Fed has given us near-zero interest rates to stimulate the economy. Taking out a loan for a house is way cheaper than it was pre-pandemic: mortgage rates notched more than a dozen record lows in 2020. Also: remote work is allowing people to leave cities and flock to suburbs.

  • The number of homes for sale in the US fell to the lowest level on record in November. That's great for KB, who's buying land and building new homes to meet demand.
  • The median sale price of a home rose above $300K for the first time this past summer. That's also good for KB, whose average selling price jumped.

It's all about the backlog, baby... "Backlog homes" are houses that have been ordered, but not built yet. Basically, they represent future sales. KB had nearly 8K backlog homes last quarter, up by half from a year earlier. Even though KB's sales were actually down ~20% last quarter, its backlog sales value jumped ~60% to $3B. Since investors are future-focused, KB stock had its biggest daily gain since May yesterday — likely thanks to that sweet backlog.

What else we’re Snackin’

  • Consoled: GameStop stock soared ~60% after Chewy's founder joined its board. Shares have nearly 8X'd in six months as new consoles dropped.
  • Vax: Dollar General offers employees four extra hours worth of pay to get the Covid-19 vaccine. It could be the first of many.
  • Cropped: Urban Outfitters, which also owns Free People and Anthropologie, reported a disappointing 8% drop from last year in holiday sales.
  • Chipper: Chip giant Qualcomm will buy chip startup Nuvia for $1.4B to better compete with Apple and Intel.
  • Unhost: Airbnb is canceling and blocking D.C. reservations during Joe Biden's inauguration week.

Snacks Daily Podcast

"GM tossed off the tie, threw on some Allbirds, and did its best impression of Tesla."

Tune in to our snackable 15-minute pod to hear more on GM's transformation.

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Snack Fact of the Day

Global venture funding jumped 4% in 2020 to $300B


Authors of this Snacks own shares of: Apple and Tesla

ID: 1479298