🚲 Peloton’s subscription sprint
Hey Snackers,
Serious case of déjà vu: Tom Brady announced his retirement from the NFL again, saying it’s “for good” this time. We’ll believe it when we see it (again).
Stocks popped yesterday after the Fed hiked its benchmark rate by 25 basis points, as expected. Investors were heartened by comments from J. Powell, who acknowledged that inflation’s cooling. After the bell, Meta stock spiked 17% after it reported expectation-topping revenue and announced a $40B share buyback.
Peloton’s subscription pivot helped spin down losses — and spin up its struggling stock
Came for the workout… stayed for instructor Cody. Peloton shares surged 22% yesterday after the spin icon revealed healthy growth for its subscription biz — which, FYI, makes more $$ than its hardware biz ($2K spin bikes, fancy treadmills). Last quarter Peloton’s losses narrowed as cash burn fell to $94M, down from $547M a year ago. While Peloton’s hardware sales plunged 52%, subscription revenue from on-demand fitness classes grew 22%.
- Speed up: Peloton gave a better-than-expected forecast for the year and is aiming to have 1M people sign up for app subscription trials over the next year.
- Slow down: It’s Peloton’s eighth straight quarterly loss, and the stock’s down 43% in the past year. But shrinking losses and subscription growth could signal a comeback.
Just keep spinning… Peloton thrived during lockdown, but as people hopped off their couches and headed back to the gym, unsold equipment piled up. To cut its losses, Peloton outsourced manufacturing, canceled plans for a $400M Ohio plant, and laid off over a tenth of staff. Last fall Peloton pivoted from its direct-to-consumer model by striking distribution deals with Amazon and Dick’s Sporting Goods to energize demand. It also got itself into thousands of Hilton gyms, hoping to lure new customers.
The road less traveled can be smoother… Instead of giving up when its core spin-bike biz faltered, Peloton leaned into subscriptions, which are less cost-intensive than hardware. Now it’s trying to return to growth by leveraging its charismatic instructors and mobile-friendly classes. By promoting subs to non-Peloton owners, it could ride the fitness-for-all strategy to a gradual recovery.
Crypto hackers set a looting record last year, casting a shadow on DeFi's bright promise
When all-time highs = industry lows… Crypto hackers had a banner year, stealing a record $3.8B last year, Chainalysis reported. It tops the previous year's record of $3.3B. DeFi (aka decentralized finance) represented 82%+ of those losses:
- DeFined: DeFi protocols (like: Uniswap and Tornado Cash) are permissionless. They let people trade crypto directly without go-betweens like centralized exchanges.
- CeFined: Centralized finance (CeFi) is more akin to traditional finance (meet: TradFi) because activity runs through a centralized entity like a crypto exchange.
- Bridged: DeFi protocols like cross-chain bridges — which let people move assets between blockchains — were like catnip to attackers, accounting for 64% of DeFi's losses.
Not so CeFine… As numerous CeFi crypto lenders went bankrupt last year (think: BlockFi, Celsius, Genesis) and crypto exchange FTX blew up, some crypto enthusiasts pointed to DeFi as a path forward. The argument: a CEO like Sam Bankman-Fried couldn't be accused of stealing your crypto if they never touched it in the first place. But as last year’s head-turning crime #s show, DeFi’s not immune either. Case in point: last year North Korea-linked hackers stole $1.1B from DeFi protocols.
You need a solid foundation to BUIDL… crypto speak for "build." As CeFi stumbled, some crypto fans believed it could be DeFi’s time to shine. But two straight record-setting years of crypto crime suggest DeFi still has work to do if it wants to provide a path out of CeFi's rubble. One hope: DeFi's public-facing nature means investigators can follow looted crypto across blockchains — suggesting that while hackers can run, they may have trouble hiding.
What else we’re Snackin’
- GPT: ChatGPT creator OpenAI wants to help you spot the bots with a tool that detects AI-generated text — but said it fails 75% of the time. There's growing concern over the use of AI for cheating, spamming, and plagiarism.
- Unmatch: Tinder and Hinge owner Match Group said it’ll cut 8% of staff to cut costs. On Tuesday the dating titan reported a revenue drop and underwhelming guidance, though it swung to a profit.
- Bitla: Remember when Tesla invested $1.5B in bitcoin while crypto was booming and became the second-largest corporate crypto holder? The EV icon lost $140M on that investment last year, an SEC filing showed.
- OhChip: AMD stock rose after the chip giant beat revenue expectations. The bad news: quarterly profit plunged 98% as PC-related sales fell by half and expenses soared. Rival Intel disappointed earlier this week.
- Swiped: The White House announced plans to reduce credit-card late fees, proposing a rule that would lower penalties to $8 from as much as $41. It’s also taking aim at Apple’s and Google’s app-store charges.
Thursday
- Earnings expected from Apple, Amazon, Google, ConocoPhillips, GoPro, Ferrari, Harley-Davidson, Merck, Honeywell, Estée Lauder, Starbucks, Shell, Canada Goose, Atlassian, Eli Lilly, and Hershey
Authors of this Snacks own Uniswap and shares of: Apple, Amazon, Google, Match, Tesla, and Starbucks
ID: 2716006