Tuesday Feb.23, 2021

🖼 LinkedIn does freelance

_Ready for the Royal Tire Wedding_

Hey Snackers,

Yesterday, the US hit a grim milestone: 500K Covid deaths, out of nearly 2.5M worldwide. Our hearts go out to anyone who has lost a loved one during the pandemic.

Markets dropped yesterday, dragged down by Big Tech stocks. With stimulus round #3 coming up and vaccines rolling out, investors boosted "reopening stocks" like Delta, Marriott, and Carnival.

Connection

LinkedIn is reportedly launching a gig-work marketplace (it’s so mature)

The LinkedIn of gig work... might actually be LinkedIn? Microsoft-owned LinkedIn is launching a gig marketplace called "Marketplaces" (#creative), according to The Information's PFWTM. "Gig" elicits thoughts of delivery drivers, but Marketplaces is targeted to white-collar pros (like: app developers, marketers, and designers). Users will be able to book freelancers straight through LinkedIn.

Marketplaces is slated to launch this fall, and is expected to replace LinkedIn's $60/month ProFinder service (a skeletal version of Marketplaces).

"I just came across your profile"... The pickup line of professional networking. It's a good time for LinkedIn to beef up its gig offering: ~10M Americans are unemployed, and many are WFH freelancers looking for gigs. Part-time is the new full-time: the number of gig/contract/freelance workers is expected to triple to 42M this year from 2017.

With its massive network of ~740M users, LinkedIn has a leg up over freelance sites like Upwork and Fiverr, which generated a combined ~$550M in sales last year. They take a cut when people get hired. BTW: both stocks plunged yesterday on the Microsoft report.
Marketplaces could be a triple whammy sales puppy: More ad sales + more subscription sales + a cut of hiring transactions. LinkedIn's huge reach poises it to capitalize on the hot gig market.

LinkedIn is the most mature social network... because it's the most diversified. Facebook, Snapchat, Twitter, and Pinterest each make more than 90% of their sales from pure ads. LinkedIn makes $$$ from business subscription services (like Sales Navigator), ads for job postings, and LinkedIn Premium (for shameless stalking in private mode). In 2020, it made ~$8.8B in revenue. For reference: that's more than double Twitter's yearly sales, but it's a small fraction of Microsoft's $143B 2020 total. Marketplaces could help it level up.

Tired

The Royal Tire Wedding: America’s largest tire companies tie the rubber knot

Blimp-worthy news... Yesterday, investors received an invite to the biggest tire wedding in America: Goodyear Tire & Rubber has agreed to buy Cooper Tire & Rubber for $2.8B (conveniently, they have the same last name). It's like the Royal Wedding, but for tires: Goodyear is the largest tire manufacturer in the US, and Cooper is #2. Investors celebrated the power couple:

Cooper stock soared 29%, since Goodyear will pay Cooper shareholders a cash and stock premium (worth 24% more than Cooper's closing stock price on February 19th).
Goodyear stock jumped 21%, since investors think the merger will boost sales and cut costs (#synergy). The deal also strengthens Goodyear's position as #1 in the US, and nearly doubles its presence in China (where car sales are surging again).

Strength in unity... and in cost synergy. The happy couple will shave spend by combining corporate functions, R&D, and procurement. Goodyear expects to save $165M over two years from the merger. No manufacturing jobs or plants are being scrapped... for now. But the couple sees an opportunity to combine production in the future. If approved by Cooper shareholders and regulators, the marriage will be finalized later this year.

Scale is key... to succeed in a commodities-heavy business. Tires are basic products made of basic commodities: rubber and steel. While you might have a preference between iPhone 12 and Samsung Galaxy S21, tires don't have as many differentiating features/components. So companies compete on price. With this marriage, Cooper and Goodyear can join forces to scale production — instead of trying to beat each other. But we don't yet know how/if this will affect prices for consumers.

What else we’re Snackin’

Fancy: Louis Vuitton and Moët owner LVMH is buying 50% of Jay-Z's luxury champagne brand as a bet on the post-pandemic ultra luxury market.
Sank: Royal Caribbean lost ~$1.4B last quarter while most of its cruises were suspended, but the stock jumped on upbeat future bookings.
Vax: Pfizer's vaccine is 85% effective after the first shot, according to a study from Israel, which has vaccinated nearly half its population.
Oh: Dozens of Boeing's 777 jets were grounded after a terrifying emergency engine failure on a United flight.
Popcorn: Movie theaters in NYC will be allowed to reopen in March at 25% capacity, after nearly a year of closures.
Cryptout: Crypto exchange Coinbase has reportedly been valued at $100B+ ahead of its direct listing on the Nasdaq.

Tuesday

Earnings expected from Square and Home Depot

Authors of this Snacks own shares of: Microsoft and Delta

ID: 1535855

Latest Stories

Pop Quiz!

Sales of what are up 136% since 2019?

Don't be a sucka

$70B

Alphabet shares are soaring in the after-market session, with a initial jump of more than 10% implying a gain of upwards of about $200B in market value when the stock opens tomorrow morning.

Google’s parent company crushed earnings expectations, initiated a cash dividend for the first time, and authorized a fresh $70B in share repurchases for good measure. The market likes it very much.

What’s up doc?

HOP TO IT

Joshua Topolsky

We get results!

This earnings season is fully operational

Balancing Act

Acrobatic Accounting

So, you want to join the circus?

Megan DeMatteo

No, Apple hasn’t cut its Vision Pro production estimates in half

Quite a few news outlets are reporting that Apple thinks it’s only going to sell 400,000 to 450,000 Vision Pros in 2024, compared a “market consensus” of 700,000 to 800,000. They’re all citing a note from Apple analyst Ming-Chi Kuo.

Obviously there’s no question that Apple’s $3,500 face computer will have a limited audience and could be a huge flop, but this also doesn’t seem like accurate news.

The issue is that 1) this 400,000 number isn’t new. Back in July of 2023, the Financial Times reported that Apple planned to make fewer than 400,000 units in 2024, reducing its initial projections of 1M units, citing two people close to Apple and, the Chinese contract manufacturer assembling the device. 2) It's unclear who was estimating 700,000-800,000 Vision Pros in the first place, but it appears that it was Ming-Chi Kuo himself?

Apple reportedly cuts Vision Pro production due to low demand

Seriously, relax

Economy keeps on humming along

Meta exhaustingly tries to merge the metaverse and AI

Gonna have to rename the company... again

Rani Molla10h

Chris Black

Black’s Gold

11h

Can you justify a $335 trashcan? Yes.

Here’s how.

15h

Biden signs a bill that could ban TikTok — but the #ForYou fight is far from over

Jamie Wilde

Read

15h

Gucci’s parent braces for sliding sales, as luxury demand unravels over high prices

Nia Warfield

Read

Matt Phillips

4/24/24

Chipotle continues to go on a tear, hitting a sales record

Hey it might not be the kind of AI stock investors are all hot and bothered over, but don’t sleep on the burrito business.

Chipotle posted much better-than-expected results on Wednesday, with sales rising 14% to a record $2.70B in the first quarter, which is like a billion additions of guac.

Profits jumped 23% to $359M.

Chipotle has quietly cruised higher over the last year. It’s up 63%, compared to the 24.5% gain for the S&P 500 over the 12 months through Wednesday’s close. Not bad for a rice-and-beans based business model.

Rani Molla

4/24/24

Facebook had great earnings, the market hates it

Facebook reported impressive earnings. Record first-quarter revenue thanks to AI! Profit up 117% compared to a year earlier! But at the same time, its capital expenditures are going up and it’s expecting second quarter revenue potentially lower than analyst estimates. So in other words, the future doesn’t look as bright as the present.

All in all the stock is down more than 10%. (Basically the opposite of what happened with Tesla yesterday).

Net net

4/24/24

Earnings can’t stop, won’t stop

Rani Molla

4/24/24

Why Tesla investors are holding on to hope for a cheap car

Despite terrible earnings numbers last night — declining vehicle sales, disappointing revenue and profit, enormous spending — Tesla stock is up more than 10% as of midday. That’s a welcome move for the car company, that’s been among the worst performers this year in the S&P 500.

Why the about face?

While Reuters reported earlier this month that Tesla is no longer making its long-awaited $25,000 mass-market car — news sent the stock, already suffering from headwinds across the EV industry, down even further— Tesla reported during its earnings that it’s going to make cheaper cars than it currently has.

Before the second half of next year, Tesla said it will release “more affordable models” that “will utilize aspects of the next generation platform as well as aspects of our current platforms, and will be able to be produced on the same manufacturing lines as our current vehicle line-up.”

So rather than release the $25,000 Model 2, Tesla is incorporating some of that technology into its existing models. UBS called it the Franken-3Y2.