Wednesday Sep.18, 2019

GM will lose up to $100M today

_GM workers making their voices heard_

Hey Snackers,

Big day for the lactose-tolerant. First Chipotle revealed plans for a queso blanco. Then Pizza Hut kicked things up a notch with a Kellogg collab: Cheez-It Pizza is happening...

Markets rebounded up as oil prices rebounded down. Saudi Arabia assured investors it plans to have all its oil production back online by the end of this month after the weekend drone strikes.

Hired

LinkedIn unveils "Skills Assessments" so you can prove that you're actually skillful

CTRL + Shift + F1... If you get it, you're officially "proficient" in Excel. LinkedIn just launched "Skills Assessments" (feedback: work on the name) to evaluate you on 75 skills your resumé softly implies, then knight your profile with a "verified" badge. LinkedIn quietly acquired a quiz startup last year to make Skills Assessments happen:

You'll notice a prompt under your profile's "Skills & Endorsements" to validate the "Financial Modeling" capabilities claim.
Pass the test? Get a badge.
Fail the test? Wait 3 months to retake — or enjoy the conveniently placed LinkedIn training on the topic.
Fyi, come back in a year — that's when you've got to retake the exam to keep the creds.

We endorse LinkedIn for "Smart Move"... The pro social network has a credibility problem — 650M users and a mess of unsubstantiated and embellished talents. Skills Assessments can fix that — and differentiate it from rivals ZipRecruiter and Indeed. That could earn LinkedIn more revenue from job recruiters searching for Excel's verified finest.

But has LinkedIn been a good acquisition by Microsoft?... It was acquired in 2016 to bring the "vibrant network" of LinkedIn to Microsoft's un-vibrant products (sorry, Outlook). Since then, we think Skills Assessments is the most relevant feature yet:

For LinkedIn: It deepens engagement by gamifying your FOMO-desire to show you can actually do statistics.
For Microsoft: It highlights Microsoft products by creating a hierarchy around using them.
For the bottomline: Skills Assessments becomes its own revenue-generating feature head-hunters crave.

Organize

Strike Day #3: General Motors is losing up to $100M/day

30 US factories
46K workers
0 cars produced in 2 days

We haven't seen production that low since Tebow... General Motors' unionized workers are practicing their right to assembly with a nationwide strike. 14K vehicles could've been produced in its American plants Monday & Tuesday, but weren't — the United Auto Workers wants better pay, fewer factory closures, and more job protection first.

This goes back to the financial crisis... That's when GM went bankrupt. It was reborn thanks to a government bailout and workers agreeing to sacrifice pay and job guarantees for the greater good. 9 years later, GM issued a press release titled "GM Accelerates Transformation" in which it "unallocated" 5 plants.

Translation: GM's laying off 14K American workers.
Salt in the wound: GM also announced it'll produce its new Chevy Blazer in Mexico.

Companies don't love organized labor... Negotiating a pay raise is tough 1:1 with your manager. It's easier when you're represented 46K-strong in awesome union T's. But we rarely see labor strikes in America because of the long, steady decline of unions. Here's how much the percentage of US workers who are union members has fallen:

30% in the 1950s
20% in the 1980s
10% from the 2000s through today

What else we’re Snackin’

Named: Comcast's NBC enters the Streaming Wars with a creatively non-made-up name: Peacock
Sharp: Facebook is stealthily working with the maker of Ray-Bans on secret "Orion" smart glasses
Over: Juul's e-cigarette sales just launched in China — and China just shut that down on fresh health worries
Beached: Sandals Resorts is trying to sell itself for $4.5B
Swipe: Corning probably makes the glass covering whatever smartphone you're using right now — so Apple just invested $250M

Wednesday

Fed Chairman Jay Powell is expected to cut interest rates (again).
Earnings from General Mills and Olive Garden-owner Darden Restaurants.

20190918-956072-2880958

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NASA is considering expanding its Wallops Island, Virginia, facilities to support three times as many rocket launches, TechCrunch reports. Why does it need space for that many rockets? Mostly Elon Musk’s SpaceX. Launches by SpaceX and other private space exploration companies have been taking off in recent years.

Currently the Wallops Flight Facility authorizes 18 launches a year. The proposed additions could bring that number up to 52. Given that the U.S. had 116 launch attempts in all of last year, an additional 34 launches adds a lot more capacity in an increasingly lucrative space.

The space economy was already worth $564 billion in 2022 and is expected to grow another 41% in five years.

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Carvana’s stock is sometimes up, sometimes down, always volatile

Shares in online car seller Carvana surged some 34% yesterday, continuing their recent resurgence. That rebound has made the father-son duo behind the company some $11B since late 2022 — a period when the stock was dropping as much as 40% in a single day, and was teetering on the verge of insolvency as creditors explored options to restructure its debt.

Since then the company, famous for its “car vending machines”, has seen its fortunes reverse, as the used-car market has stabilized and sales have returned to growth (up 17% in Q1 2024). Most importantly, however, Carvana seems to have gotten a handle on its massive $5B+ debt load — which was a major factor in why the equity in the company was so volatile — after swinging into profitable territory in Q1.

Yesterday’s move leaves the stock up more than 16x in the last 12 months.

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Pop Quiz!

Whose market cap is bigger than the economy of the country it’s HQ’d in?

Don't be a sucka

$110B

Apple announced a massive $110B boost in share buybacks — the biggest of all time. That’s even higher than the $90 billion analysts expected. For context in the last 12 years Apple spent a total of $650 billion buying back its own stock. The entire S&P 500 did $795 billion last year. That certainly softens the blow from a 4% decrease in revenue.

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Ozempic, Wegovy drive Novo Nordisk profits up

Shares of Danish drugmaker Novo Nordisk fell on Thursday, as investors digested the latest hard numbers from the maker of heavily-hyped drugs Ozempic and Wegovy.

For the record, sales of both continue to explode, though sales of Wegovy, which more than doubled to kr. 9.8B, came in about 10% below analyst expectations. Ozempic sales, which slowed, actually were better than expectations.

In Danish currency terms, Q1 profit jumped 28% for the company, which is based in suburban Copenhagen. Novo Nordisk’s market value of roughly $570 billion is now larger than the entire Danish economy.

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The most popular gym in the US doesn't actually have enough gym space for all of its members to get fit.

2021 Times Square New Year's Eve Celebration planet fitness

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Short sellers are getting squeezed on Carvana, Wayfair, and Enovix

Shares of Carvana, Wayfair, and Enovix were ripping Thursday morning.

These companies don’t have too much in common from a business operations standpoint — one makes batteries, another needs batteries, and one sells furniture and rugs that really tie the room together.

What they do have in common right now though: traders were betting on their shares to fall, and each released quarterly earnings reports either after the market closed on Wednesday or on Thursday morning that weren’t as bad as feared, in one way or another.

As of mid-April, short interest as a percentage of equity float for these stocks ranged from 26% (Wayfair) to 31% (Enovix), according to exchange data.

Betting against two of these companies had paid off so far this year, with Carvana being the exception. Shares of the used-car retailer were up 78% heading into Thursday’s session versus Wayfair (-14%), and Enovix (-47%). For comparison, the S&P 500 Index is up 5.8 percent year-to-date.

Hat tip to Tom Hearden, senior trader at Skylands Capital, for bringing this to our attention.