⚾️ DraftKings' Major League Bust

Tuesday, July 28, 2020 by Robinhood Snacks | Disclosures

Guess it's back to Russian ping pong

Dow Jones
26,585 (+0.43%)
S&P 500
3,239 (+0.74%)
Nasdaq
10,536 (+1.67%)
Bitcoin
$10,828 (+8.10%)
10-Yr US Treasury
0.609%

Hey Snackers,

Experian is now letting you add monthly Netflix payments to help raise your credit score. Little does Experian know, the password moochers are everywhere. Could this be an elaborate ploy to see if you're still on your ex-boyfriend's cousin's account?

The Nasdaq led the market uptick with some Big Tech gains. In non-stock news: gold prices soared to a record high, and Bitcoin inexplicably surged to break $10K for the 1st time in two months.

Sports
1. DraftKings soars on live sports re-starting, then falls on MLB cancellations

Guess we're back to Spelling Bee re-runs... Or Russian ping pong. DraftKings took its fantasy sports app public back in April via SPAC merger (ICYMI: yesterday's SPAC rundown). In May, the sports betting company said it would live-stream sports events through its app. While live sports seemed as far away as an Arby's in a desert, DraftKings stock soared on the hope. Then it soared more when:

  • Sports were coming back: (minus the fans). The NBA is restarting play at the Disney bubble, the NHL is set to hit the ice in August, and the MLB took the field on July 23.
  • Bets were coming back: DraftKings had its 2nd-best day since March thanks to the MLB return. It was the #1 sport in its sportsbook this weekend (shocker).
  • Then COVID struck back: DraftKings stock plunged 8% after the MLB's announcement that two games were being postponed Monday because 12 players and 2 coaches tested positive for coronavirus.

What happens in one MLB team... probably doesn't stay in one MLB team. The MLB cancellations made investors realize just how fragile the whole live events situation is... and how quickly it can go south. Investors got hyped on reopenings, then plunged the stock when foreseeable setbacks emerged.

THE TAKEAWAY

DraftKings occupies a weird spot in the corona-conomy... because its biz is so closely tied to external events. While lockdown couch-boredom would have people flocking to the app for entertainment, the lack of live sports leaves DraftKings powerless. Streamers like Netflix, HBO Max and Hulu will be in the same awkward position if TV/film production doesn't resume soon (although apparently Netflix has content hoarded for years).

Raise

Like Viagra in Allbirds packaging... 3-year-old telehealth startup Ro (adorable) just raised a fresh $200M in funding, bringing its valuation to $1.5B (baby Unicorn). Ro started off selling men's hair loss supplements and erectile dysfunction meds. In typical startup fashion, Ro managed to make those things sexy by incorporating three major trends:

  • Direct-to-consumer: Everything delivered, so you don't have to pick up those Viagra or STD pills in person — they pounced on Pfizer's patents once they expired.
  • Trendy packaging: Sleek colors and minimalist Millennial typeset make excessive-sweat medication look like a Kylie lipkit. It's discrete, so you can proudly leave out that eczema cream on the nightstand.
  • Tele-everything: Get prescriptions via online doctor consultation and follow-up with your M.D. via in-app text.

Build the brand model, then explode it... Just like Amazon started with books, Ro started with 1 product — now it wants to conquer the digital health industry. Ro's big selling point: it doesn't want your health insurance info in exchange for prescription meds (direct payments only). Since launching men's meds, Ro evolved into a telehealth biz with 4 main verticals:

  • Roman: The flagship men's offering — from prostate health powder to hair loss drops.
  • Rory: The female version of Roman — from eyelash care to menopause meds.
  • Zero: Nicotine replacement treatments to quit smoking.
  • Ro Pharmacy: Delivers 500+ generic medications for a $5 flat fee.
THE TAKEAWAY

But can it differentiate enough to disrupt?... Ro has big competition in the "new-age" healthcare space: Walgreens just dropped $1B to add easy-access doctors clinics in-store — it also offers prescription delivery and OTC delivery with Postmates. CVS is opening 1.5K HealthHUB clinics and doing OTC med delivery with DoorDash. TBD whether the 3 major trends Ro latched onto are enough to differentiate. If it's not enough to go mainstream, Ro will have to stay niche.

What else we’re Snackin’
  • Whoa: Google extends its coronavirus WFH order until July 2021 for almost all of its 200K employees.
  • Vax: Moderna shares jump on word it's getting an extra $472M in COVID vaccine funding from the US government.
  • Stimulate: The GOP unveils a new coronavirus relief proposal, including $1.2K checks and $200/week extra in unemployment benefits (down from $600/week, which expires this week).
  • Bro: Toy-maker Hasbro's sales fell 29% on store closures and product shortages — action figure sales dropped on no-new Marvel films.
  • Again: Warner Bros. will release Chris Nolan’s much-hyped thriller “Tenet” to international theaters on August 26 (but America has to wait).

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Snacks Daily Podcast

Jamf is a software firm with one mission: “Help organizations succeed with Apple.” Jamf is so obsessed with Apple that it mentions it 533 times in its IPO filing.

Its whole biz revolves around getting employees set up with Apple products. And Jamf's Stage 5-clinginess to Apple helped its shares double when it went public last week.

Tune into our extra digestible 15-minute pod to hear why Jamf wants you to WFH longer.

Tuesday

Disclosure: Authors of this Snacks own shares of Apple

ID: 1270788

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