Tuesday Aug.31, 2021

🤸🏾‍♀️ Simone Biles NFTs

_Can't funge it [Westend61 via GettyImages]_

Hey Snackers,

Finally, a pink frosted for each vaccine shot: Krispy Kreme is sweetening its free doughnut incentive. Customers with vax cards will receive not one, but two free doughnuts through September 5. The glazed legend has given away 2.5M doughnuts this year.

US stocks closed at fresh records yesterday, as tech companies lifted the broader market.

Token

Sports stars and influencers embrace NFTs to unlock the next opportunity in the fan economy

Grab a Sharpie and some blockchain... NFT autographs have arrived. NFTs (non-fungible tokens) are like one-of-a-kind trading cards, but digital. Instead of living in a glass case, they live on a crypto blockchain. Today, star gymnast Simone Biles released an NFT collection with Autograph, which makes NFTs signed by athletes like Tom Brady, Derek Jeter, and Tony Hawk. Buyers can trade the tokens in DraftKings' NFT marketplace — where a Naomi Osaka Autograph NFT is currently selling for $63K.

From Taco Bell-themed art... to the internet's original source code, NFTs can be tied to any digital asset. The first NFT hit the blockchain in 2014. Since then, people have sold NFTs of tweets, songs, and even Nobel Prize patents. Over the past year:

NFT sales soared from $13.7M in the first half of 2020 to more than $2.5B in the first half of this year — a 200X increase.
Celebrities like Snoop Dogg, Paris Hilton, and even Edward Snowden, have all launched NFTs.
Big brands aren't missing out on the non-fungible frenzy: Charmin rolled out a virtual toilet paper called “NFTP” (lol), Taco Bell's NFTacos sold out in 30 minutes, and Pringles sold virtual "CryptoCrisps" for $2 each — they're now selling for about $8K/tube.

NFTs may be the new merch... of the fan economy. Sports and entertainment stars mostly rely on brand sponsorships, events, and merch sales to monetize their millions of fans. NFTs give fan-favorites from Shawn Mendes to Naomi Osaka a new tool to monetize their followers with digital product sales. OpenSea, the largest NFT marketplace, takes a 2.5% cut of NFT sales — a good deal compared to YouTube’s 45% cut, OnlyFans’ 20% cut, or even Substack’s 10% cut.

Muted

Zoom's growth is slowing, so it's getting crafty to help keep the Zoom Boom alive

You're on mute... Now repeat the 30-second spiel. Zoom has become a verb, a meme, and a lifestyle — but its latest earnings show the glory days may be fading. Last year, Zoom’s revenue more than quadrupled from the previous year as it led the WFH boom. Zoom's sales are still growing – but more slowly.

Zoom's quarterly sales grew 54% from last year — down from nearly 200% growth in the previous quarter. Next quarter, it's expecting even slower growth.
Zoom stock dropped 10% after earnings. This year, it’s down 4%, while the market-tracking S&P 500 is up 22%.

Zoom, zoom, zoom, zoom… I want you in my conference room. Zoom's growth is slowing as people return to offices and IRL events. It's also experiencing the "DPF Effect," aka: demand pulled forward. Growth that should've happened last quarter happened all at once last year. Now, Zoom's getting creative to help keep the boom going:

Zoom-as-a-service: In March, Zoom said it would start licensing its video conferencing tech to other apps as an unbranded service. Think: dating apps and telehealth providers.
Live events: In October, Zoom launched "OnZoom" for people to find and host paid virtual events, from live performances to yoga classes. In July, it launched "Zoom Events," for companies to host external and internal interactive events (think: large workshops).
Customer service: In July, Zoom announced plans to buy cloud-based customer-service platform Five9 for a whopping $14.7B. Zoom sees it as a way to attract more big enterprise customers.

Zoom doesn't need to change its product... to keep growing post-pandemic. It just needs to keep expanding beyond work meetings. That’s why it’s putting its tech to work through live events and whitelabel licensing. Even with the Delta variant surging, the fully remote office life likely won’t last forever. But Zoom could thrive in a hybrid IRL-virtual future — if it offers the tools to support it.

What else we’re Snackin’

TBD: Pfizer, BioNTech, and Moderna shares slipped while Wall Street waits for the CDC to weigh in on whether Americans should get Covid vax booster shots.
Surge: Gas prices are rising as Hurricane Ida pummels Louisiana, shutting down a critical swath of US oil production and leaving 1M+ without power.
BNPL: Shares of "buy now, pay later" company Affirm popped 47% after it announced a partnership with Amazon, which'll allow 'Zon shoppers to pay in installments.
Sporty: Disney's ESPN is reportedly looking to license its brand to major sports-betting companies for at least $3B.
McClose: McDonald's reversed its plan to reopen indoor dining at 100% of locations by Labor Day, and advised franchisees in Covid hotspots to re-close.
Data: Shares of satellite company Globalstar soared 60% on rumors that the unreleased iPhone 13 may use satellites when out of network range.

Tuesday

Earnings expected from NetEase and Crowdstrike

Authors of this Snacks own shares of: Moderna, Google, Amazon, Disney, and Apple

ID: 1820932

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Do you want to run the State Department of McDonald’s?

A couple of days ago, a tweet making fun at McDonald’s hiring a “Manager for Diplomatic Relations” went viral.

At first glance, the idea that McDonald’s, a burger franchise known for its double quarter pounders and perfectly salted fries, is expanding its diplomatic influence with policy makers in Foggy Bottom and the world at large sounds comical. But it’s actually crucial.

There are more than 40,000 McDonald’s locations spread across 115 countries around the world, and 90% of these stores are independently owned and operated franchises that pay royalties to the parent organization to operate. Tens of thousands of franchises operated by different owners with different beliefs, priorities, and values can get complicated, fast.

As we noted in Snacks in February, McDonald’s received heavy backlash from franchisees in countries including Saudi Arabia, Oman, Jordan, Kuwait, and Pakistan after McDonald’s Israel donated thousands of free meals to IDF personnel. But it wasn’t McDonald’s, as an entity, that made the donations. It was the owner of the company’s Israel franchises, who was acting under his own volition.

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Nuke stocks up on AI excitement

For most of humanity, the thought of “nuclear-powered AI” sends a shiver down the spine. But the stock market is all for it! Just check out the list of top performing S&P 500 stocks this year. Just behind established AI plays — Super Micro Computer and Nvidia, you’ll find Constellation Energy, the largest operator of nuclear plants in the U.S. NRG Energy, which also operates nuclear plants, isn’t far behind. Bloomberg reports that CEO of power distributor Exelon — which spun off Constellation in 2022 — says in the Chicago area alone, AI could drive a 900% jump in demand for energy from data centers.

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China makes Apple remove WhatsApp, Threads, Signal and Telegram from app store

In its latest move to restrict foreign tech, Beijing has ordered Apple to remove a number of popular messaging apps from its app store there, including WhatsApp, Threads, Signal and Telegram.

These apps had only been available through VPNs but were popular nonetheless, according to the Wall Street Journal.

Apple said the Chinese government asked them to remove the apps in the iPhone maker’s second biggest market over “national security concerns.” Last week, China told its state-owned telecoms to phase out the use of US chips by 2027.

Exclusive | China Orders Apple to Remove Popular Messaging Apps

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Tesla's recall reveals just how bad Cybertruck delivery numbers have been

Thanks to a recall of Tesla’s Cybertrucks, we now know how many of them have actually been delivered: 3,878 since the EV company began releasing them to customers in November.

In its third and fourth quarter earnings report, Tesla said that its current Cybertruck production capacity was greater than 125,000 a year. Musk had previously said he expected to produce 250,000 Cybertrucks a year by 2025.

Either way, that’s a lot more than the roughly 775 it’s delivered each month so far.

The recall is over an issue with the gas pedal pad that, the National Highway Traffic Safety Administration says when pressed, “may dislodge, which may cause the pedal to become trapped in the interior trim above the pedal.” The cause of the issue: “unapproved” soap that the manufacturer used to aid in getting the pad on the pedal.

A Cybertruck customer this week posted a TikTok about a terrifying incident in which this happened and “held the accelerator down 100%” in his 6,000+ pound vehicle. Thanks to some quick thinking where he held down the brake and put it in park, he wasn’t injured.

This is the long-awaited Cybertruck’s second recall since it came out five months ago.

Tesla recalls the Cybertruck for faulty accelerator pedals that can get stuck | TechCrunch

Either way, that’s a lot more than the roughly 775 it’s delivered each month so far.

This is the long-awaited Cybertruck’s second recall since it came out five months ago.

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Cocoa hits $11,000

Cocoa prices are breaking records on an almost daily basis — with cocoa futures closing at (another) all-time high of $11,020 per metric ton yesterday.

That’s up 158% since the start of the year, and over 4x on the typical prices seen in 2022 — as crop production continues to fall short of demand.

Major cocoa-producing nations like the Ivory Coast and Ghana, which between them grow about two-thirds of the world’s cocoa, have seen excessive tree failure due to disease, changing weather patterns, and hot, dry conditions causing devastating droughts.

As such, consumers are starting to see the effects of the largest cocoa supply deficit in over 60 years: “shrinkflation” and reduced-cocoa recipes might soon hit your favorite chocolate bars, and Hershey stock was recently downgraded. Unfortunately, the worst may still be yet to come: the International Cocoa Organization expects production to lag behind demand by 374,000 tons for the 2023-24 season.

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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

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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.

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