🐦 The Twitter rabbit hole intensifies

Thursday, February 11, 2021 by Robinhood Snacks | Disclosures

Elon flaunting his chip

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Hey Snackers,

The people have spoken, and the people want the orange drink. The Hi-C drink is returning to McDonald's soda fountains, after four long years of customer complaints.

The Dow index set another record high yesterday. Investors are hyped about progress on President Biden's $1.9T stimulus.

Fleet
1. Twitter just dropped earnings, but we're more interested in its recent shopping spree

As thick as Jack Dorsey's beard... Twitter's earnings. The little blue bird (apparently named Larry) just delivered 2020 results. It was a news-packed year, to say the least. As usual, Twitter served as the hub for current events convos.

  • Last year: Twitter posted a $1.1B loss, compared to a $1.5B profit in 2019. Its yearly sales growth pales in comparison to Snap and Facebook's.
  • Last quarter: Sales jumped 28%, and profit nearly doubled from 2019, suggesting a recovery from the early pandemic ad dip.
  • Post-Trump: Twitter banned Trump's account a week after its most recent quarter ended. But its January usage was above average compared to recent years, and is expected to remain strong this quarter.

Larry flying high... Twitter stock soared to a record high yesterday. The positive outlook soothed concerns that engagement would drop post-Trump-era. But investors might also be eyeing Twitter's 60-day shopping spree:

  • In December, Twitter bought screen-sharing social app Squad. The tech could allow users to host live video chats on Twitter, a la Zoom.
  • In January, Twitter snatched up the team behind social podcasting app Breaker to help with its new audio-based social "Spaces" (Clubhouse vibes).
  • Also in January, Twitter acquired email newsletter startup Revue. Twitter plans to use it to allow people to sign up for content directly on Twitter.
THE TAKEAWAY

Twitter is focused on destroying friction... and bringing everything a creator needs into one app. Right now: you follow Bill Gates on Twitter, but get his Gates Notes newsletter on Gmail. You follow Elon Musk on Twitter, but attend his live chat on Clubhouse. You follow T Swift on Twitter, but watch her Live stream on Facebook. From newsletters, to live podcasts, and hosted video chats: Twitter wants to make sure that Twitter is the final destination for users and creators — instead of an app that redirects you to other platforms.

Crunchy

Get in the e-Hummer, we're going shopping... GM stock has been cruising around all-time highs, thanks to its ambitious plans for an all-electric future (phase out gas-guzzlers by 2035). It also just posted strong quarterly earnings and an upbeat profit outlook for 2021. But GM has a big (tiny) problem: chips.

  • The Great Chip Shortage... is unrelated to Lay's, but makes auto makers hungry. The average car contains 50 to 150 chips. Problem: there's a global chip shortage.
  • All the WFH'ing we've been doing devoured the chips. When US car sales rebounded quicker than expected, car companies realized they hadn't stocked enough chips to meet demand. Ford had to shut down a plant last month because it was chip-outta-luck.

Seeing the chip bowl half-empty... Despite all the positive news surrounding GM, investors got hung up on its semiconductor problems. Yesterday, GM said it expects lost production from the chip shortage to erode $1.5B to $2B of its 2021 profit. That's about the same L that Ford is expecting to take. GM also plans to extend shutdowns at several of its American factories.

  • Meanwhile... Tesla has been using its own self-driving computer chip in some car models since 2019. Elon claimed that the Tesla-designed chip is "the best in the world." Whoa.
  • But that doesn't mean it's immune (yet)... to the chip drama. Last month, Tesla said it's working hard to manage through the shortage, which may have a temporary impact.
THE TAKEAWAY

Car companies will have to become more like tech companies... to be successful in the future of electric, autonomous mobility. The competition is steep: GM's Cruise, Google's Waymo, Tesla, and even Apple, are all working on fully self-driving vehicles. The winner will likely be the car with the best self-driving brain. AI chips are critical to that. That's why Tesla, GM, and others, have joined the race for the best autonomous chip. Not only could it make them self-sufficient — but it also could give them the edge they need to stand out.

What else we’re Snackin’
  • RiRi: Rihanna’s Savage x Fenty just raised a fresh $115M, bringing the lingerie line’s valuation to a sultry $1B+.
  • Ride: Uber's quarterly loss shrank 20% from 2019, as delivery growth continues to outpace a drop in rides.
  • TokOn: The Biden admin has (reportedly) indefinitely shelved the sale of TikTok’s US operations to Oracle and Walmart.
  • Vax: The FDA approved Eli Lilly’s Covid antibody drug cocktail to treat recently diagnosed Covid patients.
  • Protect: Under Armour shares jumped 7% on a surprise profit for the holiday quarter and expectation-beating sales.
  • EPO: Amazon-backed electric vehicle startup Rivian is reportedly looking to go public as soon as September (at a $50B+ valuation).
Snacks Daily Podcast

Barbie had her best year since 2014... but Mattel’s more interested in the TV version.

The toy maker had its best sales year since 2017 thanks to Barbs and Hot Wheels, beating out competitors like Hasbro.

The key to Mattel's long-term success: cashing out its franchises in every way possible. We're thinking UNO: The Movie.

Thursday
  • Weekly jobless claims
  • Earnings expected from Disney, AstraZeneca, and Kraft Heinz

Authors of this Snacks own shares of: Walmart, Uber, and Amazon

ID: 1521360