Hey Snackers,
MySpace had just launched. Britney dropped "Baby One More Time." And Y2K became a thing.
Stocks are officially off to their best 4-month start to a year since 1999. Happy May.
Facebook rolls out dating and one big redesign
Welcome to Zuckapalooza. Now please update your FB app... Mark began Facebook's F8 developer conference with a preview/tour of the redesigned Facebook: aka "FB5" (it's rolling out to users starting today). Facebook Dating is also expanding to the US later this year and 14 more countries right now — Swipe right on any friend or indicate a friend-of-a-friend "Secret Crush."
Operation FB5-star is a Group team effort... Go look at Facebook's app in the App Store — it has about as many 1-star as 5-star ratings. It's polarizing. This redesign is intended to improve that by focusing on Groups:
- Better privacy: Worried those embarrassing freshmen year pics may go viral? Facebook's concerned, too. So it's emphasizing Groups and Messaging, which keep posts more contained.
- Admins = Policemen: It doesn't have enough humans or AI to stop extreme content from reaching innocent eyes. So it's de-emphasizing the newsfeed, and letting your Group's Admin take down bad stuff.
- Potentially worse isolation: Limiting chats to Group life means conspiracy theories, hate, and misinformation could potentially thrive even more.
This could hurt profits. It doesn't matter... It's not clear how this privacy focus will affect the Book's ad-tastic business model. But 18-29-year-olds are ditching Facebook fastest (usually for Insta, which Facebook also owns) because FB posting is too public. So it's disrupting itself with a more private version before a competitor does.
Bacon and Donut Sticks power McDonald's to a record high
Pop the top-shelf McFlurry... McDonald's just notched its 15th-straight quarter of sales growth, jumping 5.4% globally. But McD's suffered two menu casualties: Its fancy burgers (the "Signature Crafted Recipes" lineup) is 86'd and its late-night menu is getting trimmed.
Ronald has settled into a 2-carb diet... And it's working. McDonald's credited a pair of promotional foods for the strong 2019 start:
- Donut Sticks: Added to the menu in February, the 280-calorie balanced breakfast headlined McD's new 2-for-$5 "Mix and Match" deal.
- Bacon Day: The one-day event in January let you toss bacon on the side of any order. That delivered a single-day sales pop and an opportunity for diners to experience new menu options.
The Breakfast Wars just got kicked up a notch... Fast food sales were flat last year overall, but breakfast sales rose 1%. Breakfast is now the last quick-serve food frontier because it's the meal you most likely prepare at home. Donut Sticks were McD's latest Breakfast War attack — Here are the other recent battle moves:
- Burger King introduced a $5-a-month coffee subscription in March.
- Panera redesigned its morning menu in April.
- Dunkin' launched two new sausage & egg-white breakfast bowls this week.
Apple about to hit $1T valuation (again) as iPhone era fades
When a realtor brags about the house's plumbing... walk right out the door. Now Apple's boasting in the first paragraph of its earnings about iPad and Watch sales — But they're just a sliver of company revenues. Overall, Apple's profits fell 16% because fewer people are upgrading to $1K iPhones (your $750 iBrick is still solid).
Cash hookups are rising... as sales are falling. Apple's got a case of "lack-of-iPhone-growth," so it distracted shareholders with goodies:
- The dividend is growing by 5% — Each quarter, Apple will wire almost $4B worth of company cash to stockholders based on the # of shares they own ($0.77 per share, to be exact).
- It'll spend $75B to buy back some Apple shares — That increases the value of all the other shares out there by removing some from the market.
- The result: Apple stock rose 5% Tuesday because investors will get cash hookups.
Apple's become a giant ATM... Even though business is shrinking, Apple has so much past and future profit that it's expected to surpass Microsoft today to become the #1 most valuable company again.
- The past: $225B in the bank from the good ol' iPhone days that it'll continue dishing out to shareholders as dividends + share buybacks.
- The future: 900M people use iPhones right now. And Apple will make more money by mooching services off them like Apple TV+, Apple News+, Apple Music, Apple Pay.
What else we’re Snackin’
- Streaming: Netflix reveals the seven projects the Obamas are working on
- Lift: General Motors profits benefitted from its investment in Lyft
- Frapp'd: Starbucks unveils its summer drink lineup (S'Mores, Mocha Cookie Crumble, and Insta-worthy Dragon Drink included)
- Sold: Altice drops $200M to buy streaming network Cheddar
- Out: Alphabet's Eric Schmidt (long-time Google CEO) is stepping down from the board
- Side-Effect: GE warns the halted Boeing 737 sales are a risk to its profits because it makes the engines
Wednesday
- Earnings from Molson Coors, Fitbit, Zynga, Square, and Estée Lauder
- May Day (aka International Workers Day), markets still open in the US