Tuesday Mar.16, 2021

🦄 America's most valuable unicorn

_When Stripe takes off the invisibility cloak_
_When Stripe takes off the invisibility cloak_

Hey Snackers,

CEOs are soo 2020: Elon Musk is officially the "Technoking" of Tesla. His CFO Zach Kirkhorn is now "Master of Coin." Will Facebook be next with Zuck as "Grand Duke of Zucking"? Or GM's Mary Barra as "Chair of Chassis"? Tweet us your most creative CEO titles @RobinhoodSnacks.

Stocks hit new records yesterday, thanks to vaccine optimism and incoming stimulus cash.

95icorn

Stripe becomes America's most valuable startup thanks to its high "stoxygen" factor

Move over, Technoking... Stripe has officially surpassed Elon's SpaceX to become the most valuable private startup (ironically, Elon is a Stripe investor... so he wins anyway). The digital payments unicorn now has 95 horns, after raising $600M in fresh funding at a chunky $95B valuation. That's nearly 3X its last reported valuation from April 2020. For reference: Facebook's last valuation before going public was ~$83B.

95 (invisible) horns... You don't see Stripe, but you've probably used it while paying for something online. Stripe allows companies to quickly transfer credit card payments directly into their biz bank accounts.

  • Millions of companies of all sizes use Stripe's software to accept payments and manage their financials. Stripe makes money by charging fees for each transaction. Competitors include: Adyen, PayPal, and Square.
  • 89%: The probability that your credit card has been used on Stripe's network. Amazon, DoorDash, Uber, Spotify, Zoom, and Glossier are all Stripe customers.
  • Stripe's mission is "to increase the GDP of the internet" (read: get more people to pay for stuff online). It wants to be the backbone of ecommerce growth.

Stripe is a "stoxygen" company... Stoxygen factor = how necessary a company is to other companies, and how invisible it is to customers. Like oxygen, Stripe's payments software is crucial and invisible — and it's everywhere in the online economy. Other business-to-business stoxygen companies: Amazon's AWS (cloud computing), Shopify (ecommerce payments), and Salesforce (customer support). The wild thing: all those "invisible" companies use Stripe's stoxygen, too. As the online economy continues to grow, Stripe is poised to grow with it.

Book

The “Revenge Economy" begins, and pandemic travel hits a record high

Best feeling in Economy... When they give you water and a soda from the cart. Millions were feeling the carbonated love this weekend, as US air travel hit a pandemic high: TSA screened 1M+ passengers each day from Thursday to Sunday, the best streak in a year (they were prob all going to Miami).

  • On April 15 last year, just 90K people passed through TSA — 96% fewer passengers than in April 2019. In August, we hit a daily high of 863K passengers (still ~70% fewer than in 2019).
  • On Sunday, more than 1.3M people handed their IDs to TSA. That’s still 41% below 2019 levels... but it’s a serious improvement.

Return of the Biscoff cookies... Airline shares surged yesterday. United stock popped 8% after the company said it expects to stop burning cash in March (earlier than projected). Driving the travel record: rising vaccine optimism, and falling Covid cases. 15% of American adults have been fully vaxed so far. Airlines aren't the only ones showing signs of recovery...

  • Urban Outfitters is seeing fresh interest in "going-out" clothes. In the last week of February, seven of Anthropologie’s top 10 selling items online were dresses (up from zero mid-pandemic).
  • Carnival already has more cruise bookings for 2022 than it had in 2019, and Royal Caribbean saw a 30% increase in future bookings since the start of the year (compared to Nov/Dec).
  • Ulta's makeup sales increased from January to February, while skincare declined as a percentage of sales.

The “Revenge Economy" could be next... For a year, sweats have replaced shopping sprees and screens have replaced travel — and Americans have socked away $1.5T in excess savings. After Stimulus #1, Americans saved a record 33% of their disposable income in April 2020. While the pandemic is still inflicting pain, things are looking up. Now that people feel more secure in their savings, we're seeing leading indicators of the revenge spending economy. With a fresh round of $1.4K checks going out, we can expect more revenge spending in April.

What else we’re Snackin’

  • Popcorn: AMC stock soared 26% yesterday as it reopened two key theaters in LA. It's gearing up to open the rest of its CA locations starting on March 19.
  • SPACman: VIP investor Bill Ackman donates his $1B+ stake in newly-public Coupang to charity.
  • R-back: Toys R Us has a new owner (again). WHP Global is planning to reopen Toys R Us stores in the US ahead of the holiday season.
  • Unvax: Germany, France, Spain, and Italy suspend the use of AstraZeneca's Covid vaccine over blood clot fears.
  • Auto: GM's self-driving car startup Cruise is buying Voyage, another self-driving startup focused on operating in retirement communities.

Tuesday

Authors of this Snacks own shares of: Amazon, Shopify, Square, and Tesla

ID: 1565238

Get Your News

Subscribe and thrive

Snacks provides fresh takes on the financial news you need to start your day. Chartr provides data visualizations on business, entertainment, and society. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Latest Stories

2h

Governments and companies tackle the climate crisis as damage intensifies

Jack Morse
Read
2h

Bookkeeping the climate crisis: the monetary cost of extreme weather

Max Knoblauch
Read
2h

The cost of waste: e-junk and emerging tech add to America’s pollution prob

Nia Warfield
Read
Sponsored by
Go Deeper with Market Depth

Nasdaq TotalView powers the need-to-know data serious investors rely on.

Read more
Scuba Diving in the Wild Blue Yonder in French Polynesia
2h

The biz of electric vehicles: the EV transition hits speed bumps

Jamie Wilde
Read
Jack Morse
$10B blow
2h
Bitcoin business will lose billions in the halving

Investors and miners have spent months prepping for the crypto-shattering event lying in bitcoin’s code. It’s finally arrived.

Silhouette of a bitcoin miner pulling a bitcoin logo from a hole
World
Friday, April 19th
3h
What’s happening
Casey Newton
Platformer
9h
Meta’s new AI paves the way for social networks where nothing is what it seems

Five ways of thinking about Llama 3, its latest large language model

Screenshot of Meta’s AI image generator, frog in a bathrobe
Power
Matt Phillips
12h

World out of balance: It costs the US 3¢ to make 1 penny

The cost of producing the US penny rose 13% in fiscal 2023 to 3.07 cents. Yes, that means that Uncle Sam loses more than two cents for every cent it produces. (And no, you can’t make it up on volume.)

For the record, that’s the 18th-straight year the penny’s face value has been below production costs, fueling calls for abolishing the lowest value denomination coin. Canada started to phase out the penny in 2013, joining Australia, Brazil, Finland, New Zealand, Norway, and Israel, according to Smithsonian Magazine.

3.07¢

Pop Quiz!

What’s the world’s busiest airport?
Don't be a sucka

Your inbox is ready

Subscribe and thrive

Snacks provides fresh takes on the financial news you need to start your day. Chartr provides data visualizations on business, entertainment, and society. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Business
Rani Molla
14h

Netflix is going to stop sharing subscriber numbers

After posting subscriber numbers that beat expectations today, Netflix says it’s no longer going to share those numbers starting in the first quarter of 2025. That’s a big deal since subscriber numbers have long been one of the main metrics that investors have looked at.

“In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential,” its shareholders letter read. “But now we’re generating very substantial profit and free cash flow.” The company said that it will focus on revenue and operating margin as its main financial metrics, while it will look at time spent on the platform to gauge customer satisfaction.

Another way to read this? They’ve hit market saturation and just aren’t going to be growing that much anymore, and they thought they’d end on a good note. Going forward they’re focusing on how to get more money out of the customers they do have.

They’re doing so by cracking down on password sharing and charging for extra members. They’re also pushing people to ad tiers, which are more profitable than non-ad tiers.

“Scaling ads to become a more meaningful contributor to our business in ‘25 and beyond,” Netflix said.

Netflix’s ads membership grew another 65% in Q1 over the previous one, after rising 70% the quarter before, and 40% of signups in ad markets continue to be for those ad plans.

14h

Frozen Dead Guys

The audacious and expensive world of cryogenics

Jamie Wilde
US-NORWAY-TRADITION-DEATH-FESTIVAL-OFFBEAT
Jack Raines
Adios, ERP
17h
By one measure, stocks haven't looked this bad in decades

Earnings are important, but they aren't everything in the stock market.

Dow Jones Industrials Average Closes Day 477 Points Up
Tech
Rani Molla
17h

Meta’s not telling where it got its AI training data

Today Meta unleashed its ChatGPT competitor, Meta AI, across its apps and as a standalone. The company boasts that it is running on its latest, greatest AI model, Llama 3, which was trained on “data of the highest quality”! A dataset seven times larger than Llama2! And includes 4 times more code!

What is that training data? There the company is less loquacious.

Meta said the 15 trillion tokens on which its trained came from “publicly available sources.” Which sources? Meta told The Verge’s Alex Heath that it didn’t include Meta user data, but didn’t give much more in the way of specifics.

It did mention that it includes AI-generated data, or synthetic data: “we used Llama 2 to generate the training data for the text-quality classifiers that are powering Llama 3.” There are plenty of known issues with synthetic or AI-created data, foremost of which is that it can exacerbate existing issues with AI, because it’s liable to spit out a more concentrated version of any garbage it is ingesting.

AI companies are turning to such data because there’s not enough good, public data on the entire internet to train their increasingly greedy AI models. (Meta had reportedly floated buying a publisher like Simon & Schuster to satisfy its insatiable data needs.)

Meta, of course, isn’t the only company that’s tight-lipped about where its AI data is coming from. In a now infamous interview with WSJ’s Johanna Stern, OpenAI’s chief technology officer Mira Murati was unable to answer questions about what Sora, OpenAI’s video generating app, was trained on. YouTube? Facebook? Instagram — she said she wasn’t sure.

Meta’s battle with ChatGPT begins now

Meta’s battle with ChatGPT begins now

What is that training data? There the company is less loquacious.

Meta said the 15 trillion tokens on which its trained came from “publicly available sources.” Which sources? Meta told The Verge’s Alex Heath that it didn’t include Meta user data, but didn’t give much more in the way of specifics.

It did mention that it includes AI-generated data, or synthetic data: “we used Llama 2 to generate the training data for the text-quality classifiers that are powering Llama 3.” There are plenty of known issues with synthetic or AI-created data, foremost of which is that it can exacerbate existing issues with AI, because it’s liable to spit out a more concentrated version of any garbage it is ingesting.

AI companies are turning to such data because there’s not enough good, public data on the entire internet to train their increasingly greedy AI models. (Meta had reportedly floated buying a publisher like Simon & Schuster to satisfy its insatiable data needs.)

Meta, of course, isn’t the only company that’s tight-lipped about where its AI data is coming from. In a now infamous interview with WSJ’s Johanna Stern, OpenAI’s chief technology officer Mira Murati was unable to answer questions about what Sora, OpenAI’s video generating app, was trained on. YouTube? Facebook? Instagram — she said she wasn’t sure.

Matt Phillips
17h

Today’s earnings: Who’s making money edition

Here are some some notable numbers out this morning, as earnings season gathers steam. Thursday’s main event will be Netflix after the close of trading. (Keep an eye on its advertising business.) But until then...

7.13%

The 30-year fixed rate mortgage is back above 7%, according to weekly numbers from the Mortgage Bankers Association, the highest level in four months. High borrowing costs are creating havoc for would-be buyers, as affordability lingers at the low levels not seen consistently since the late 1980s.

Business
Rani Molla
22h

Amazon’s spy ops on rivals: shell companies, printed docs, and a fake Japanese streetwear brand

Some companies check out rivals’ websites, stores and public filings to stay abreast of the competition. Amazon made its own fake shell company and brands, transacted hundreds of thousands of dollars per year undercover on competitors’ platforms, and kept its intel operation a secret for nearly a decade even from others at Amazon, according to a fascinating investigation by the Wall Street Journal.

Working as a seller called Big River, a secret group of Amazon employees gained access to rival platforms, including Walmart, FedEx, and Alibaba. They used Big River email addresses and went to seller conferences as Big River employees. They even stayed hidden within Amazon itself. These employees would take screenshots of competitors’ systems that they would then show others at Amazon in person to avoid an email paper trail.

Perhaps most strange of all, the company created a fake Japanese streetwear brand called “Not So Ape” (clearly a play on A Bathing Ape) and continues to sell products from the brand on a Shopify store, presumably as an attempt to learn the inner workings of the shopping platform. Of course, copying is old hat for Amazon.

In meetings where they’d use this clandestine information to inform Amazon’s own business practices, the group resorted to literal paper. “[T]he team avoided distributing presentations electronically to Amazon executives. Instead, they printed the presentations and numbered the documents. Executives could look at the reports and take notes, but at the end of the meeting, team members collected the papers to ensure that they had all copies."

Exclusive | Inside Amazon’s Secret Operation to Gather Intel on Rivals

Exclusive | Inside Amazon’s Secret Operation to Gather Intel on Rivals

Working as a seller called Big River, a secret group of Amazon employees gained access to rival platforms, including Walmart, FedEx, and Alibaba. They used Big River email addresses and went to seller conferences as Big River employees. They even stayed hidden within Amazon itself. These employees would take screenshots of competitors’ systems that they would then show others at Amazon in person to avoid an email paper trail.

Perhaps most strange of all, the company created a fake Japanese streetwear brand called “Not So Ape” (clearly a play on A Bathing Ape) and continues to sell products from the brand on a Shopify store, presumably as an attempt to learn the inner workings of the shopping platform. Of course, copying is old hat for Amazon.

In meetings where they’d use this clandestine information to inform Amazon’s own business practices, the group resorted to literal paper. “[T]he team avoided distributing presentations electronically to Amazon executives. Instead, they printed the presentations and numbered the documents. Executives could look at the reports and take notes, but at the end of the meeting, team members collected the papers to ensure that they had all copies."

World
April 18th
24h
What’s happening
Tech
Time’s ticking
4/17/24
Big tech vs. big government
Jack Raines
More taxes, eh?
4/17/24
Capital gains taxes won’t fix Canada’s terrible housing market

Canada's proposed solution to its housing crisis may exacerbate the problem instead.

SWITZERLAND-DIPLOMACY-ECONOMY-SUMMIT-DAVOS
Crypto
Jack Morse
4/17/24

Worldcoin pivots to the blockchain… with a 'humans only' discount

Worldcoin, the “proof of personhood” crypto project launched by OpenAI’s Sam Altman, said it plans to launch its own ethereum layer-2 (L2) blockchain dubbed World Chain. The pitch: a blockchain where it’s both easier and cheaper for people to transact than bots.

Worldcoin has made waves for its iris-scanning metallic orb that promises a future where people can mathematically prove they’re real humans and not AI bots.

But it’s run into trouble: the orbs have been banned across Europe and Africa, and the associated WLD crypto token has plunged 50% over the past month.

For project insiders, who reportedly received a token allocation of 25% of supply, that could equal significant losses. 

Which is what may make World Chain attractive. Crypto exchange Coinbase launched its own L2, Base, last year. Base has since seen rapid user growth — activity that’s generated the exchange millions of dollars in weekly fees. 

Worldcoin could benefit from similar revenue if its L2 is adopted around the world.

Worldcoin, Sam Altman's Crypto Project, Is Building a Layer-2 Chain

Worldcoin, Sam Altman's Crypto Project, Is Building a Layer-2 Chain

But it’s run into trouble: the orbs have been banned across Europe and Africa, and the associated WLD crypto token has plunged 50% over the past month.

For project insiders, who reportedly received a token allocation of 25% of supply, that could equal significant losses. 

Which is what may make World Chain attractive. Crypto exchange Coinbase launched its own L2, Base, last year. Base has since seen rapid user growth — activity that’s generated the exchange millions of dollars in weekly fees. 

Worldcoin could benefit from similar revenue if its L2 is adopted around the world.