🖼 LinkedIn does freelance

Tuesday, February 23, 2021 by Robinhood Snacks | Disclosures

Ready for the Royal Tire Wedding

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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
1. 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.
THE TAKEAWAY

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

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.

THE TAKEAWAY

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.
Snacks Daily Podcast

Spotify just proved its devotion to audio-everything at its "Stream On" virtual event.

Future hits include: HiFi audio, interactive polls, and new exclusive podcasts (feat. Barack Obama and Bruce Springsteen — on the same pod).

The Swedish streamer is also expanding to 80 new countries. Tune in to hear how Spotify is using the "Flywheel Effect" to grow.

Tuesday

Authors of this Snacks own shares of: Microsoft and Delta

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