Hey Snackers,
We can't decide what's worse: spending $36M on painted rocks by accident, or $69M on a jpeg file on purpose.
The stock market notched new all-time highs last week. Investors were upbeat about recovery: President Biden said that every US adult will be eligible to get a vaccine by May 1st. Oh, and a $1.9T stimulus bill passed (NBD)...
Third time's the charm... After a months-long back and forth in Congress, Stimulus Round #3 is (officially) here. The $1.9T bill landed on President Biden's desk on Thursday, when it was signed into law. It’s nearly as big as the first stimulus we got when Covid hit last March — and more than 2X as big as the 2009 financial crisis package. Some highlights:
Charge it to the room... The US govt has passed a ginormous $5.3T worth of stimulus during the pandemic — that's $43K per household. And that $$$ isn't coming out of taxes. It's adding to the $28T national debt, which is now larger than the entire US economy. Some fear that the huge cash infusion could lead to higher interest rates and soaring prices. But the Fed says it won't raise rates any time soon. And inflation has stayed (relatively) low for a decade.
This could turn a "Nike recovery" into a V-shaped recovery... Even without this stimulus, the economy has been healing. ~13M jobs have returned since April 2020 — but the pace of recovery has slowed. Last year, many expected recovery would take the shape of a Nike swoosh: sharp drop, slow rise. Now, economists predict a much faster recovery: this year, the US economy is expected to grow 6%, the fastest annual growth since 1983 — and 3M jobs are expected to be added. The US could finish 2021 with even higher growth than was projected pre-pandemic, thanks to Stimulus #3.
Call your 10-year-old cousin... If you haven't heard of Roblox, you're probably old enough to drive. ~75% of Americans ages nine through 12 use the online gaming platform to play with friends. Roblox stock soared Wednesday after it direct-listed its shares on the NYSE (sorry, IPO). The tween favorite notched a $38B market cap, up from the $29.5B valuation it snagged in January. Roblox makes robucks by taking a cut of the money that players spend on user-generated game upgrades. It's growing fast, but hasn't turned a profit.
Let your Seoul glow... Coupang (aka: the Amazon of South Korea) raised $4.6B in the biggest US IPO of the year. Coupang shares soared 40% on Thursday after dropping on the NYSE. The ecommerce bigshot finished the week with an $83B market value (5% of an Amazon). But it's one-upping Prime with guaranteed same-day or next-day delivery. That's not surprising, when 70% of South Koreans live within seven miles of a Coupang warehouse. Sales nearly doubled last year from 2019, and Coupang's loss shrank to $475M (still huge).
Bad poshture... Poshmark shares sank 20% on Friday, after the app-based marketplace unboxed its first earnings as a public company. Like Etsy, Posh has been riding the pandemic e-thrifting surge: it sells everything from $8 Aerie tanks to $500 Coach bags (and takes a cut). Future-focused investors weren't feeling Posh's weak forecast for this quarter. Tighter Covid restrictions are still in place in some states, which could limit Posh's sales (outdoor dining = one jacket).
Blend it out... On Thursday, Ulta reported earnings and announced the exit of its CEO Mary Dillon — then the stock dropped 8%. As Zoom face replaced face-to-face, makeup sales plunged. Ulta's 2020 sales shrank 17%, slightly less than the overall US beauty industry. The makeup chain made up for some of those losses with skin care (moisturizer = the new highlighter). But one section of Ulta's earnings reflects the reopening economy: sales from makeup grew from January to February this year, while skincare made up less of total sales.
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