👤 LinkedIn leaves China

Thanks for connecting... Or not. Microsoft's LinkedIn is removing itself from China's network. The software giant is shutting down LinkedIn in China, citing the country's intensifying pressure to censor. FYI: China was LinkedIn’s third-largest market, with 50M+ users. Microsoft plans to launch a new China-specific version of LinkedIn this year, which won't include social features: no ability to share opinions, news articles, or "some personal news."

• LinkedIn was the last major American social network still running in China, and it’s the biggest tech departure from China in years.
• The networking site launched in China in 2014 with limited features in order to comply with China's strict internet laws. (Refresher: Microsoft bought LinkedIn for $26B in 2016.)
• Last year, LinkedIn received 42 requests from Chinese authorities to take down content, and acted on 38. Then last month LinkedIn blocked the profiles of several US journalists in China.

Great walls of fire... China’s “Great Firewall” monitors and censors online. Facebook and Twitter have been blocked in China since 2009, and Google left in 2010 after declining to censor search results. This year China blocked the social audio app Clubhouse and the encrypted chat app Signal. Some savvy internet users can access Western sites through VPNs, but many don’t.

• American tech companies aren't thrilled about being blocked from billions of potential users in China — even Zuck’s Mandarin couldn’t get FB unbanned.
• But they also face criticism in the West if they censor content to appease the communist government. Cue: LinkedIn’s departure. A few other examples...
• Google dropped the China-compliant search engine it was building, and Zoom faced backlash for shutting down a human-rights account to comply with Chinese law.

Espresso machine delivery ETA… 124 days. Three (related) themes are defining earnings season for companies, from airlines to pizza chains. First, supply-chain snarls are curbing sales of retailers like Nike, which had to close some factories despite booming demand. Second, rising materials costs have led companies like Clorox to lower yearly profit forecasts. Third, labor shortages are compounding both those problems, with companies like FedEx blaming worker shortages for lower-than-expected sales. Expect these issues to continue into the holidays.

Catered bagels for the branch… Big banks reported tasty quarterly profits. Profits at consumer-focused Bank of America, Wells Fargo, and Citi boomed after the banks released billions in loan loss reserves set aside for defaults that never happened. A jump in credit-card spending helped Citi’s profits soar 48% from last year, while IPO and merger-palooza boosted profits at investment banking giants JPMorgan Chase and Morgan Stanley. Trading activity is expected to slow, so we’ll see if investment banks can keep profits pumping.

Cracked the dalgona candy... Whoops. Netflix gained a whopping 36M subscribers last year while you binged “Tiger King.” But that led to subscription saturation (#subscripturation), and slowing growth this year as non-couch activities return. Last quarter Netflix lost 400K subscribers in North America, which now makes up just 35% of customers. Investors want to know if Netflix’s new focus on foreign shows boosted subscribers when the Flix drops earnings on Thursday. FYI: Korean thriller "Squid Game" is Netflix’s best-performing show ever.

Self-driving PR... Tesla hit another delivery record last quarter, with 240K cars. In the previous quarter, Tesla raked in $12B in sales, nearly double from a year ago. For reference, Chinese EV-competitor Nio generated over $1B in Q2. Tesla recently launched full self-driving (think: reading stop signs and auto lane change) for select drivers, even though its Autopilot feature is in the hot seat with regulators. We’ll see if Tesla can keep up the record pace and manage its self-driving woes when it rolls up with earnings on Wednesday.

• Puff: Vuse’s tobacco-flavored e-cig became the first FDA-approved vape. Vuse Solo got the green light by doing what Juul didn’t.
• Pill: Pharma giant Merck filed for FDA approval of its Covid pill. If approved, the first swallowable antiviral Covid drug could help cut hospitalization and death rates.
• Brew: Starbucks turned 50. We’re looking at Starbs’ transformation from a small bean seller to a $131B giant that accounts for nearly half of US coffeehouses.

• ENTJ: Personality type could affect income level in a big way — on average, humble INFPs make $34K a year, while power-hungry ENTJs make $60K.
• Sneaky: Club #Flation has a new member: shadowflation. To mask rising prices, businesses are quietly reducing services like bathroom cleaning.
• Scream: As workers process pandemic anxieties, return-to-work stress dreams are on the rise. Think: presenting in your old conference room in your PJs.

• Monday: Earnings expected from Albertsons
• Tuesday: Earnings expected from Johnson & Johnson, Procter & Gamble, Netflix, Philip Morris, Ericsson, Halliburton, and United Airlines
• Wednesday: Earnings expected from IBM, Tesla, Verizon, Abbott Labs, NextEra Energy, Anthem, and Biogen
• Thursday: Jobless claims. Earnings expected from Intel, AT&T, Snap, Chipotle, Southwest Airlines, Tractor Supply, Quest Diagnostics, and Barclays
• Friday: Earnings expected from Whirlpool, Honeywell, and American Express

Authors of this Snacks own shares of: Microsoft, Netflix, Snap, Starbucks, Tesla, Snap, Google, and Chase

ID: 1879644