Christmas shopping just delayed iTariffs

Wednesday, August 14, 2019 by Robinhood Snacks | Disclosures

Markets weren't expecting this, but kind of love it

Dow Jones
26,275 (+1.42%)
S&P 500
2,925 (+1.44%)
8,016 (+1.95%)
$10,902 (-4.82%)
10-Yr US Treasury

Hey Snackers,

Simone Biles just pulled off the 1st ever triple-double (twists on twists on twists).

Give US trade policy a gold for its own flips — fresh after planning tariffs to hit China within a few weeks, the US is now backing down hostilities. That performance was enough to jack the Dow up 373 points Tuesday.

1. Snap tries (again) with hardware: Spectacles 3

Forward to your 1 friend who will actually get these... For a cool $380, they too can strut around in a pair of Snap's Spectacles 3. A limited number go on sale here in November, featuring a new HD camera to create depth perception as you semi-creepily record everyone around you. We consider the design pseudo-Coachella-geek-hipster chic.

If at first you don't succeed... spend a lot of company resources to try 2 more times. Here's the social network's timeline/quest to add hardware to its app success:

  • Spectacles 1 (2017): A $130-per-pair costly mistake — Snap sold them via pop-up vending machine, but made way more glasses than the 150K that were actually sold, costing it $40M.
  • Spectacles 2 (2018): A $150 thinner mistake — Snap made the glasses narrower and waterproof, but they didn't catch on, either.
  • Spectacles 3 (Now): A $380 potential mistake obsessed with augmented reality — It definitely prices out most of Snap's teen userbase, but 3D filters make your walk to work look actually interesting.

Friction is the problem... There's nothing wrong with a tech company testing out a wearable device like Spectacles — but Snapchat still hasn't fixed problems that make them hard to use. Example: Footage taken on Spectacles doesn't automatically transfer to your Snapchat account. (Friction). That's why over half of Spectacles 1 & 2 users quit after a month.


iTariffs... President Trump announced them just 2 weeks ago. With everything else already tariff'd, the US planned to tax the remaining $300B worth of consumer products made in China starting September 1st — including the iPhone. Yesterday, he said nevermind: waiting until December 15th for most new tariffs so American shoppers can have a Merry Christmas.

Teachers hate procrastination... Markets don't. The tariffs were essentially a 10% tax that would hurt profits for companies manufacturing in China, while raising prices by 10% for everybody. Here's who wins with Tuesday's sudden flip:

  • Apple: Shares popped 4% because iPhones and MacBooks won't get 10% more expensive until after most holiday shopping is done. Made in China AirPods, the Watch, and HomePod still get hit on September 1st, though.
  • Mattel & Best Buy: The stocks rose 5% and 6% as Made in China action figures and speakers will remain tariff-free through the holidays.
  • Nike: Sneakers were also on the exemption list, so the swoosh jumped up 2%.

This sends a message to China... If the trade war has political or stock market costs, America might cave. Credibility is important in negotiations, and Trump's credibility takes a hit with this one.

  1. Political cost: Since American buyers pay US tariffs, not Chinese exporters, this latest round would have grinched Christmas for American households.
  2. Stock market cost: If tariffs caused poor holiday sales, stock markets likely would've suffered.

Distance makes the heart grow fonder... Or something like that. Take CBS and MTV/Nickelodeon-owner Viacom. The two media legends split 13 years ago — and then, like Ross and Rachel, they spent the past 3 years (slowly) flirting over whether to get back together. Now the deal has officially been reached, and these are the primetime numbers:

  • $28B: The combined revenue of the Brangelina-esque new "ViacomCBS."
  • 140K & 3.6K: The combined number of TV episodes and movies the new company will own.
  • 4.3B: The incredibly massive global reach of TV subscribers ViacomCBS claims to have.
  • 61% vs. 39%: When the deal likely closes at the end of the year, CBS shareholders get 61% of the new company, Viacom shareholders get 39%.

Family Matters... The Redstone family ran Viacom until 2006, when it made sense to split off CBS as a separate company. But now that YouTube, Netflix, and social networks are eating into both companies' profits, a re-merger seems prudent. Media heiress Shari Redstone wanted to reunite, but former CBS CEO Les Moonves was against it — now that he's been pushed out for alleged sexual assault, Shari gets her family reunion.


This all comes down to one word: streaming... CBS All Access was actually one of the 1st streaming networks, but never really took off. Consolidating Viacom and CBS' original content from Spongebob to Star Trek is respectable enough to entice cord-cutters — but Netflix and Amazon are already way bigger, and Disney just acquired Fox. Content remains king, and ViacomCBS is a smaller kingdom.

What else we’re Snackin’
  • Fresh: Domino's decides to embrace e-bike pizza delivery all by itself (no 3rd-party delivery apps) — and it's hiring
  • Chilled: Coca-Cola is releasing aluminum Dasani water bottles over the next year (but it's still making the plastic ones too)
  • Unveiled: Allbirds pioneered direct-to-consumer sneakers — now its first non-shoe product is...socks (with an entirely new material: "Trino")
  • Overheard: Spotify is kicking its podcasting fix up a notch: it officially released "Spotify for Podcasters" to give creators valuable audio data
  • Hungry: Tilray, the Canadian pot company, dropped after its earnings, but acquiring a hemp food company helped pump sales up 371%
Snacks Daily Podcast

Your Snacks Daily team is off the pod mics for a few more days — back in your ears next week


Disclosure: Authors of this Snacks own shares of Luckin Coffee and Amazon


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