Friday Sep.09, 2022

⛏️ A White House crypto wish

A peek into crypto mining (Lars Hagberg/Getty Images)

Hey Snackers,

No milk, no problem: Kellogg's wants you to add water to its new "instabowls" of cereal (milk powder included). The $2 single-serve bowls are the ramen noodles of the inflation era.

Stocks ticked up yesterday after sliding on Fed Chair Jerome Powell’s hawkish stance at his Q&A (pain’s still the name of the game). Across the pond, the European Central Bank hiked interest rates by a historically large 0.75 bps to tame high ’flation.

Greenhouse

The big White House report on crypto's environmental impact puts executive action on the table

Cleaning up your act… can get messy. Yesterday the White House released a major report on the environmental impact of crypto mining, and the message was clear: shape up. The report, commissioned in March, calls out energy-intensive crypto (like: proof-of-work bitcoin) and says the industry should collab with environmental and energy regulators to develop clean standards. If that fails, the report says the admin should consider exec action. The dirty US crypto facts:

Ctrl+Altcoin+Del: Crypto's energy usage = all home computers.
Ethaust: Crypto emissions = railroad's diesel-fuel emissions.
Americoin: The US is home to 38% of global bitcoin mining, thanks in part to giants like Riot Blockchain and Marathon Digital. Both stocks popped 14% yesterday.

When you finish chores early… President Biden's crypto-climate report dropped just a week before the ethereum Merge (a shift from power-hungry proof of work to energy-efficient proof of stake) is set to overhaul the second-largest crypto, ethereum. But other proof-of-work cryptos like bitcoin still have a long list of chores to tackle to appease the current admin.

If the collab model fails, the report says Congress should “consider legislation to limit or eliminate the use of high energy intensity consensus mechanisms” for crypto mining.

Self-regulation could be the best regulation… for the crypto industry. The Biden admin's push for cleaner crypto operations suggests the status quo is a no-go. But its openness to collabing with industry titans also suggests that crypto might come out of this smiling. Meanwhile, the Merge could demonstrate that ethereum can change all on its own, without the force of regulation. Whether the rest of crypto follows suit could determine the admin’s next steps.

Plug

Chevy's $30K electric SUV could be one of the cheapest yet, as GM strives to make the “EV for everyone”

Rated E… for EVeryone. GM’s going all in on affordable electric vehicles with the launch of the Chevy Equinox EV. The Tron-esque SUV will go on sale in the US next fall, with the cheapest model starting at $30K ($10K less than Tesla's cheapest whip). The specs:

Road range: The Equinox will be powered by GM's in-house Ultium EV battery system. GM says it’ll reach up to 300 miles per charge.
The lineup: Chevy already has one of the largest e-fleets with the Silverado EV, Bolt E, and Blazer EV.

EV sticker shock… Tesla and Ford recently hiked their electric-car prices as rising metal and battery costs weigh on profits. With the average EV price tag just shy of $70K, GM is focusing on affordability to boost adoption — and speed past the competition.

GM slashed the price of its Chevy Bolt EV by as much as $6K in June after a massive recall and production pause led to just 26 EVs being sold in Q4 last year.
Ford’s EV sales tripled last month, and Volkswagen’s EVs are “basically sold out” for the year in the US and Europe.

Consumers are waiting till the price is right… EV demand is hot: registrations jumped 60% in the first three months of this year, and EVs could account for a quarter of all new-car sales by 2025. But they still make up just 5% of America’s cars. Affordable models from staples like GM, coupled with Biden’s EV tax incentives, could help make “EVs for everyone” a reality.

What else we’re Snackin’

Roburrito: Uber Eats sealed a 10-year deal with self-driving startup Nuro (looks like a microwave on wheels). Uber will use Nuro’s street-legal autonomous trucks to deliver food starting this year.
Plush: RH — the luxury furniture company known for its $3K cloud couches and outrageously nice stores — beat expectations but issued a weak outlook as high mortgage rates hurt housing splurges.
Kardash: Kim K launched a private-equity fund, becoming the latest celeb-preneur to enter the investment industry. Serena Williams and Leo DiCaprio have leveraged their fame to raise big $$.
Benzian: Mercedes-Benz and Rivian said they’re teaming up to build electric commercial vans (different designs for each brand) on a shared assembly line to cut costs.
Hancock: DocuSign shares popped 18% after the e-signature staple surprised investors with a solid earnings and a better-than-feared outlook as the sign-from-home life continues.

Friday

Earnings expected from Kroger

Authors of this Snacks own: bitcoin and ethereum and shares of GM, Tesla, Ford, and Uber

ID: 2417374

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Kering’s other brands, which include Yves Saint Laurent, Bottega Veneta, and Balenciaga, fared slightly better — but the only real bright spot was the company’s eyewear division, where sales rose 24% (9% on a comparable basis).

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The Federal Trade Commission has sued to block big tech, big grocery, big vacuum, and now, big… “affordable luxury handbag.”

Yesterday, the FTC sued to block Tapestry Inc’s $8.5B acquisition of Capri holdings. The agency is worried that a merger between Tapestry, which owns the Coach and Kate Spade brands, and Capri, which owns Michael Kors, would eliminate competition in the market.

The crux of the FTC's argument lies in the scope of the "accessible luxury" handbag market, where Tapestry competes with Michael Kors, with the FTC saying the following:

Where Tapestry and Capri most vigorously compete against one another – mainly between Tapestry’s Coach and Kate Spade brands against Capri’s Michael Kors brand – is in the “accessible luxury” handbag market. Today, Coach, Kate Spade and Michael Kors continuously monitor each other’s handbag brands to determine pricing and performance, and they each use that information to make strategic decisions, including whether to raise or lower handbag prices.
The deal would eliminate fierce head-to-head competition on many important attributes including on price, discounting, and design. Tens of millions of Americans that purchase Coach, Kade Spade, and Michael Kors products could face higher prices

While Capri and Tapestry are two of the largest players in this market, winning an antitrust case won't be so straightforward, as consumers have other options at similar price points, including Marc Jacobs (owned by competitor LVMH), Tory Burch, Cuyana, and Mansur.

FTC Moves to Block Tapestry’s Acquisition of Capri

The crux of the FTC's argument lies in the scope of the "accessible luxury" handbag market, where Tapestry competes with Michael Kors, with the FTC saying the following:

Where Tapestry and Capri most vigorously compete against one another – mainly between Tapestry’s Coach and Kate Spade brands against Capri’s Michael Kors brand – is in the “accessible luxury” handbag market. Today, Coach, Kate Spade and Michael Kors continuously monitor each other’s handbag brands to determine pricing and performance, and they each use that information to make strategic decisions, including whether to raise or lower handbag prices.
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On the other hand, Tesla shares are down nearly 60% since their all-time peak. The company has ceded ground in EVs, prompting a series of profit crushing price cuts to preserve market share. The cumulative loss in market value over that period is pushing $800 billion. Few corporate executives have presided over such a degree of value destruction.

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Microsoft says its smallest model, which can fit on a smartphone and wouldn’t need to be connected to the internet to work, is nearly as good as OpenAI’s GPT-3.5. A Microsoft exec suggested this less expensive model could be a good fit for online advertisers, if not doctors.

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$127

The average bitcoin-transaction fee hit an all-time high of $127 on Friday.

The temporary spike came as the halving cut miner rewards and traders forked over huge sums of BTC (skewing the average) to be included in the first post-halving block.

Adding fuel to the fee fire was the launch of Runes, a new protocol that lets developers create memecoins on top of the bitcoin blockchain. The debut was so popular that fees popped as traders fought for limited block space.

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