Hey Snackers,
Our hearts go out to the eight victims who were killed in the Atlanta spa shootings on Tuesday, and their loved ones. We don't yet know the motive for the attacks — but they follow a sharp rise in violence and racism against Asian-Americans during the pandemic.
The Dow closed above 33K for the first time yesterday, after the Fed pledged to continue its easy-money policies while the US economy recovers. TLDR: interest rates will stay near zero, and the Fed will keep buying bonds to pump $$$ into the system and keep borrowing cheap.
Uber reclassifies UK gig drivers as "workers" — now it could have a precedent problem
Don't know what a Nissan Sentra looks like... Didn't see it coming: Uber lost a major labor battle last month, when the UK's Supreme Court ruled that its drivers are entitled to a minimum wage and other worker benefits. This week, Uber made the worker reclassification official.
- Fresh status: Uber granted its 70K UK drivers a new (less gig-y) employment status that includes vacation pay, pensions, and a minimum wage.
- Fresh costs: The UK is one of Uber's largest markets, making up ~6% of gross ride bookings at the end of 2020. So the shift could be pricey...
But not as pricey as you'd think... Uber usually doesn't pay its drivers wages — it just connects them to riders, then keeps ~25% of the fare. While the new UK benefits sound costly, they're not as expansive as they sound.
- What disappointed labor activists: Drivers are guaranteed minimum wage only after they've accepted a trip (not if they’re just in the app looking for work). Also: Uber Eats delivery drivers aren't included in the change.
- Uber says the average driver already makes more than the UK minimum wage of ~$12/hour. And that it would be illogical to pay them while they're potentially working on another app (like Lyft) at the same time.
The real story isn’t the details... It's the precedent. In November, Uber scored a major victory when CA voters said "Yes" to Prop 22. Uber had threatened to leave CA if it was forced to reclassify gig drivers as employees. But now that Uber has given UK drivers a new status, it could inspire more labor activists to push for change globally (and more lawsuits). That precedent is likely why Uber stock sank 4% yesterday.
Website builder Squarespace hits a $10B valuation (but we need to look at Wix)
This video is sponsored by... Squarespace has helped millions of non-coders build their own websites. It just raised $300M at an impressive $10B valuation — and though it was founded in 2003, its valuation has 5X’d in just the past three years. That's probably how it paid for its Dolly Parton Super Bowl commercial. In addition to hosting your sizzle reel website, Squarespace has also expanded to hosting online stores (great timing).
Double SUMO... Squarespace is still private, so regular investors are straight up missing out on its growth (it's a SUMO stock). But investors are SUMO'ing on its financials, too: Squarespace filed confidentially to go public in January, staying secretive with its numbers. Case in point: a one-paragraph post was all we got about the latest fundraise. While we barely know anything about Squarespace’s $$$, we do know about its publicly-traded rival Wix (also a website builder with ecommerce hosting):
- $17B: Wix's market value. The stock has more than 3X’d in the past year as the world economy moved further online.
- +30%: Wix's sales growth accelerated from 2019 to 2020, and it expects that momentum will carry through this year.
- +107%: Wix's subscribers (who pay for monthly hosting) more than doubled from the end of 2019 to the end of 2020. But its yearly loss also doubled.
Lookout for the comp... to understand the private. With public companies, the market decides value. With private companies, it's a comparison game. To determine private company valuations, investors look at their publicly-traded competitors. They find similar companies in the same industry to gauge the private company's growth potential and value. As businesses moved online and people took on more side-gigs during the pandemic, Wix had its "most successful year in history." This gives us a hint as to what Squarespace might've experienced (despite its invisible numbers).
What else we’re Snackin’
- Magical: Disneyland is back. Disney says its two California theme parks will reopen on April 30 (at 15% capacity).
- Unplug: Plug Power shares plunged after the fuel cell company said it'll restate its financial results because of accounting errors.
- BTC: Morgan Stanley becomes the first big US bank to offer wealthy clients access to bitcoin funds.
- Basics: Amazon becomes the #1 clothing retailer in the US, unseating Walmart. We're talking $41B+ worth of apparel sold in 2020.
- Chippy: Toyota and Honda will halt production at North American factories because of supply chain shortages (#ChipPocalypse).
Thursday
- Weekly jobless claims
- Earnings expected from Nike, FedEx, and Dollar General
Authors of this Snacks own shares of: Uber, Amazon, Walmart, and Disney
ID: 1568943