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Hey Snackers,
You know we've hit peak pandemic when a black market for gyms emerges. Secret "speakeasy gyms" are like speakeasy bars during Prohibition (but more sweat, less Svedka).
The S&P 500 nearly hit its all-time high last week. Consumers returned to their pre-COVID spending levels in July — But economists expect belt-tightening now that enhanced unemployment benefits have dried up.
On our pod: Chili's is known for ribs, not delivery. But its parent just launched a ghost kitchen called "It's Just Wings" — our 15-minute podcast looks at how that virtual restaurant is already worth almost $150M.
Fight
Fortnite leads an epic movement against Apple and Google's 30% App Tax
So meta... Fortnite-maker Epic Games started a Battle Royale on Thursday by adding its own in-app payment system to bypass the "App Tax." The privately-owned video game maker, worth over $17B after a fresh fundraise this month, knowingly defied the App Store Empire:
- Apple and Google take a 30% cut of in-app purchases, downloads, and subscriptions from non-Apple/Google apps.
- Fortnite hates that. So it added its own in-app payment option, offering a 20% discount to players who used that instead of Apple/Google's. In response...
- Apple and Google expelled Fortnite from their app stores for violating rules by bypassing the 30% fee. Then, Epic promptly filed War and Peace-sized lawsuits against both tech giants. It also dropped a Pixar-worthy video to troll Apple: "Nineteen-Eighty Fortnite."
Don't hate the player... hate the platform-player. Epic's lawsuits try to establish the App and Play stores as competition-crushing monopolies. This isn't a revolutionary call-out: for years, Apple has been getting heat for being a player in a marketplace it also controls. The Fruit has been accused of playing favorites with its own apps.
- Epic's bold PR campaign is drawing more scrutiny than ever on Apple and Google's app store dominance. Facebook, Spotify, and Tinder-owner Match have come out in support of Epic against the “App Store tax.”
- If Epic wins, Apple and Google might have to reduce or remove their fees. Apple made ~$15B in sales from the App Store last year (around 5% of its total sales).
The App Store isn’t just a marketplace — it’s more like a public utility... We use apps to communicate, travel, shop, and eat. Google's Android controls 85% of the global operating system market, while Apple's iOS has 15% — every mobile app goes through their stores. These stores have created an explosion of opportunity for developers, but with caveats: Developers have to swallow Apple/Google's 30% sales tax on the mobile economy. Even Apple TV takes a 30% cut of $30 digital rentals for Disney's Mulan. All that could change with Epic's movement.
Highs
Who's up...
The tide is high but I'm holdin' on... Royal Caribbean stock surged 18% over the week on word of "remarkable" demand for 2021 cruises. Royal has been anchored since March, when COVID outbreaks suspended its global cruise operations. Now execs say pent-up demand led to impressive 2021 bookings, despite "literally no marketing efforts" (and a few PR nightmares). Royal lost $1.6B last quarter, but just snagged a fresh $700M loan to float until 2021.
Grab the pizza cutter, Elon... Tesla soared 14% after announcing its 1st-ever stock split. On August 28th, each Tesla share will split into 5: if you own 1 share trading at $1.5K, you'll suddenly have 5 worth $300. Companies split stock to make it cheaper for regular investors (like us) to buy shares — but splits don't change a company's overall value. The Tesla pizza pie will be cut into smaller slices, but it’ll still be the same amount of pizza. Splits aren't as impactful now that more brokerages offer fractional shares, making Tesla's stock boost after the news puzzling (classic Tesla).
Lows
...and who's down
Change the name... Concert giant Live Nation saw a 98% drop in sales because there's nothing live about this nation at the moment. The quarter ending in June is usually Live Nation's biggest thanks to #FestivalSzn and huge summer tours. But since Coachella was Nochella, ticketing sales actually came in negative (lots of refunds). Experimental drive-in concerts haven't matched packed arena revenues. Still, 86% of fans decided to keep tickets for rescheduled shows, saving Live Nation serious musical money.
No more "pass the AUX cord"... Uber and Lyft will likely shut down in California after a judge ordered them to treat drivers as employees instead of gig contractors starting August 20th. The ride-hailers would have to provide benefits like overtime, making employees and rides more expensive. They say this threatens to kill their ever-unprofitable companies during a time when rides have plunged. Now they're urging California riders to vote on Prop 22 in November, which guarantees drivers some benefits (like healthcare) while keeping their status as independent contractors.
What else we’re Snackin’
Focus: How Warren's Buffet "20-slot" investment rule can be applied to life in general.
Wonder: The best 'Dark Sky' parks in the US, because star-gazing is the new bread-baking.
Think: How boosting "metacognition" (your ability to think about your own thinking) can help you achieve goals more quickly.
Chill: Play around with ambient sounds to achieve your perfect white noise mix — ours: half Rain, a quarter Fire, and a dash of Coffee Shop.
Quiz: How financially literate are you? This famous 6-question quiz tells you how you stack up.
Work: When productivity becomes an addiction — there are 3 types of work addicts (but 1,000 types of procrastinators).
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This Week
- Monday: The Democratic National Convention begins
- Tuesday: Earnings expected from Walmart and Home Depot
- Wednesday: Earnings expected from Target and NVIDIA
- Thursday: Weekly jobless claims. Earnings expected from Alibaba, Ross, and Estee Lauder
- Friday: Earnings expected from Foot Locker and John Deere
Disclosure: Authors of this Snacks own shares of Apple, Google, Alibaba, Match, Spotify, and Uber
ID: 1304489
