đź’„ Makeup IPO, blockchain-style

Wednesday, April 27, 2022 by Robinhood Snacks |
Cateye goes crypto (Ilya S. Savenok/Getty Images)

Cateye goes crypto (Ilya S. Savenok/Getty Images)

Cateye goes crypto (Ilya S. Savenok/Getty Images)

Cateye goes crypto (Ilya S. Savenok/Getty Images)

Yesterday’s Market Moves
Dow Jones
33,240 (-2.38%)
S&P 500
4,175 (-2.81%)
Nasdaq
12,491 (-3.95%)
Bitcoin
$38,338 (-5.20%)

Hey Snackers,

TikTok is the new market research, and burgers are the new nuggets: ketchup icon Heinz just launched a “Dip & Crunch” sauce for hamburgers inspired by a dip-in-chips TikTok trend.

The S&P 500 fell nearly 3% yesterday, and the Nasdaq dropped even more as inflation + Russia + China’s corona crackdown weighed on the market mood. After the bell: Google dropped on news of slowing sales growth, while Microsoft beat earnings and sales expectations.

Contour

1. Techy makeup company Oddity links a digital token to its IPO, tying crypto to regulated markets

Crypto primer... the moisturizing kind. Oddity is the tech-focused parent company of TikTok-approved makeup brand Il Makiage. Think: AR shade-matching and algorithmic foundation quizzes. Its employees are mostly data engineers with zero background in beauty. Now Oddity has become one of the first non-crypto companies to tie a blockchain-based security directly to its equity ownership. Let’s de-jargon that:

  • Oddity tokens: The viral D2C makeup company launched a digital “security token” that runs on the ethereum blockchain. The tokens are digital contracts that can be tied to assets like stocks, commodities, and real estate.
  • Investors could get: The token will convert into regular shares when/if Oddity goes public, at a 20% discount to the IPO price. But it won’t be tradeable until an IPO.
  • Oddity gets: Fresh cash from “accredited investors,” not just VCs. Accredited = $200K+/year or $1M net worth.
  • Oddity was valued at $1.5B after raising $130M in January, and is rumored to be prepping its public debut.

Ethereal blush… on ethereum blockchain. Oddity’s token will be issued through an SEC-registered blockchain platform called Securitize, which has been developing the (still tiny) market for security tokens. Oddity says its token is a “trailblazing” financial innovation. It might be onto something:

  • Security tokens could unlock an opportunity for more people to invest pre-IPO, changing the way private companies fundraise.
THE TAKEAWAY

Security tokens could also be a gateway… to wider crypto acceptance. Unlike the stock market, the “Wild West” of crypto is still largely unregulated. Security tokens could be a bridge between the new world of digital assets and the old world of traditional markets. They’re created and traded on digital platforms, like cryptocurrencies. But they’re offered as regulated assets, like stocks and bonds. That could help set a standard for crypto regulation.

WTZ

Zelle-ing into the void… America’s biggest money-transfer app (hint: not Venmo) is in the hot seat. When payment apps like Zelle, Venmo, and Cash App boomed during the pandemic — as people ditched germy ATMs — scammers paid attention: 18M people in the US reportedly got swindled on payment apps in 2020 alone. Now lawmakers are accusing Zelle of not taking responsibility in cases of fraud — just as the app considers expanding into retail payments. The details:

  • What the Zelle: This week US senators accused Early Warning Services (EWS), the company that owns Zelle, of leaving users exposed to scams.
  • How the scams work: NYT reported that thieves accessed accounts by impersonating banks, and used Zelle to siphon cash. EWS reportedly doesn’t often reimburse customers because the customers technically do authorize the transfers.

Late to the payments party… but showing up with a bang. EWS is owned by Bank of America, Capital One, Chase, PNC, Truist, US Bank, and Wells Fargo. The banks launched Zelle in 2017 to compete with PayPal-owned Venmo and other fintech rivals. Zelle has grown quickly because — unlike Venmo — it doesn’t charge instant-transfer fees and is auto-included in many bank accounts.

  • Caught up: Last year Americans sent $490B with Zelle — and just $230B with runner-up Venmo.
  • Still growing: WSJ reported earlier this month that some banks want Zelle to compete directly with Visa and Mastercard by getting into point-of-sale payments.
THE TAKEAWAY

Moving money is making money… and banks don’t want to miss out. Ten fintech startups have scored $10B+ valuations in recent years by streamlining money movement for the digital era. But the big banks stayed competitive by joining forces to undercut payment apps like Venmo with fee-free Zelle. Now they may use that same fee-cutting strategy to take on credit-card giants — if Congress doesn’t punish them first over the fraud reports.

What else we’re Snackin’

  • 401: Fidelity will let savers put bitcoin in their 401(k) plans starting later this year. It’s the first retirement-plan provider to allow a crypto investment option, but employers will have to decide to offer it.
  • Pills: The Biden admin plans to double the number of pharmacies that carry Paxlovid, Pfizer’s highly effective Covid treatment. The pill has been slow to get into patients’ hands, despite being in plentiful supply.
  • Frugal: Warner Bros. Discovery's brand-new CEO said the media company wouldn’t “overspend” to get ahead in the streaming race. The comment follows WBD pulling the plug on CNN+ just weeks after it launched.
  • Brown: UPS said its package deliveries fell last quarter and expects the pandemic boom in e-commerce to keep cooling. The shipper made up for a drop in packages with — what else — higher prices.
  • Spin: Whirlpool warned that demand for appliances (like: dishwashers, fridges) may’ve peaked and that it no longer expects the market to grow this year. It’s a sign inflation is hitting consumers’ appetite for big purchases.

Snack Fact of the Day

TikTok was — once again — the world’s most downloaded app last quarter

Wednesday

  • Earnings expected from Meta, T-Mobile, PayPal, Sony, Boeing, Ford, Warner Bros. Discovery, Kraft Heinz, eBay, Spotify, Pinterest, Hertz, Mattel, and Harley-Davidson
  • Billboard Music Awards

Authors of this Snacks own: ethereum and bitcoin and shares of Google, Microsoft, Ford, Pfizer, and Block

ID: 2171865