Hey Snackers,
Groceries, pharmacies, and... chokeslams? Florida's governor deemed World Wrestling Entertainment an "essential service" in the state, allowing WWE to resume airing live matches. These essential wrestling matches will essentially be closed to the general public.
Markets gained on more coronavirus optimism, fueled by news that the rate of infection is leveling off. And Amazon stock hit a record high, driving up the Nasdaq.
And today's Great 8 matchup in Snacks Madness is Costco's annual membership vs. Nike's Air Jordan Brand. Vote for your favorite product @RobinhoodSnacks on twitter.
Like that $50 you spotted Tracy for dinner... you know you'll never get it back. JPMorgan is in the same spot — except its loans are in the billions. America's largest bank saw its profit fall a stunning 70% in the quarter, as it set aside an extra $6.8B to cover looming losses from defaulted loans. Wells Fargo also evaporated $3B of its profits to cover expected loan fails.
Enter "Loan Loss Provisions"... That's money set aside by companies in advance to cover expected future losses. Most earnings reports are backward-looking, but the 1st two big banks to report had more forward-looking reports to share:
Planning for losses is crucial (so is hedging them)... While the banks' consumer units are being pummeled by the economic crisis, it wasn't all bad news. The volatile stock market boosted JPM's trading revenues by 32%, while interest-earning deposits jumped 23% as people stashed cash in checking accounts. While these gains offset some losses, planning ahead for worst-case default scenarios is crucial to the banks' survival.
Like that excited friend who can't keep a secret... streaming player Roku is so giddy with its recent success that it couldn't help but share a little sneak-preview into its earnings ahead of their May 7 release.
Roku is kind of like the People's Streaming Device... It accounts for 44% of all streaming hours in the US. Its dongles start at $29.99/month, compared to Apple TV's $140+ shiny black boxes. It's not as sleek as Apple TV or as Alexa-integrated as Amazon Fire Stick — but it's cheap, it works, and is compatible with most TVs. Most Americans can swing that.
Tailwinds are great for business... When economic trends align with your biz model, it's like a strong wind pushing you further in your desired direction. Roku's got 3 at its back:
Not a heavy metal band or a violent rash... Thrasio is an unfortunately-named (yet profitable) startup that just got a little closer to becoming a unicorn. It raised a fresh $110M, bumping it to a $780M valuation. And its whole business revolves around being Amazon's most aggro customer — its slogan is literally "We Buy Amazon Businesses:"
Fast times at Thrasio High... Thrasio has been profitable since Day 1 of its founding in mid-2018, according to its founders. Now it's the fastest-growing acquirer of Amazon-trepreneurs, with some impressive stats to boot:
Sometimes, you really can buy success... That's exactly what Thrasio is doing: it's buying up already hot, successful businesses that are clearly in demand, adding them in a pile with other successful businesses, and coming out with an even bigger, fatter pile of success. With the investment cash and operational scalability that Thrasio brings to the table, it can do what successful Amazon sellers do on a much larger scale.
Disclosure: Authors of this Snacks own shares of JPMorgan, Roku, and Amazon
ID: 1152044