🏋️‍♀️ Planet Fitness' fruit fly strategy
Hey Snackers,
"$49 for 5 minutes" — Zoom Santas are cashing in this holiday season (brilliant side-gig). WiFi must be pricey in the North Pole.
Stocks jumped yesterday as stimulus negotiations showed signs of progress — investors are hungry for another economy-boosting relief package.
Planet Fitness is still running in the corona-conomy — behold, the fruit fly strategy
Do you even lift?... Planet Fitness makes money from your ~$10/month gym membership, and from selling equipment to its franchisee-owned gyms — same idea as McDonald's franchise model, except PF sells purple ellipticals instead of McFlurry machines.
- Flex #1: While competitors like 24 Hour Fitness, Gold’s Gym, and Town Sports have filed for bankruptcy during the pandemic, Planet Fitness is in its own (non-bankrupt) orbit.
- Flex #2: PF stock is down less than 3% this year, despite the pandemic's crushing effect on all things public sweating-related. Town Sports plunged 93% before getting delisted.
Shoo fly... PF's monthly fees are generally small enough to live with, even if you're not using the membership. Like a fruit fly, they're annoying... but bearable. The fruit fly membership strategy: keep it cheap, but make it hard to get rid of. Even when PF gyms were closed, cancellations had to be in person or by letter.
- PF's best customers: Those who barely ever show up but keep paying.
- PF's second best customers: Those who didn't bother trying to cancel during lockdowns.
The 10-Q doesn't lie... That's the quarterly financial report public companies have to file with the SEC. While the fruit fly strategy may have helped pad third-quarter results, PF's overall sales still fell 37% — and equipment sales alone plunged 71%. Membership dropped from 15.5M people in March to 14M at the end of October. Even as gyms reopened, people probably got fed up with the brutal cancellation policy (fly = swatted).
Blade, the Uber Black of helicopters, is going public at an $825M valuation
It's a bird, it's a plane, it's a... SPAC? NY-based helicopter taxi service Blade is going public by merging with a SPAC, aka: "blank-check company." A SPAC is a company without a company, that goes public for the sole purpose of one day buying a real company (in this case, Blade). The deal values the helitaxi company at $825M, up from its $140M 2018 valuation.
Channeling Blair Waldorf... Blade is like an aerial Uber for Manhattan's Elite (XOXO, Gossip Blade). The seven-year-old startup caters to wealthy city dwellers looking for a faster escape to Nantucket and the Hamptons (40-minute flight to East Hampton = $795/seat). It also offers seaplanes and private jets.
- The biz model: Like Uber, Blade doesn't actually own any of its choppers or planes — it connects passengers with charter operators.
- The app model: Also like Uber, Blade has an app that lets you book flights in seconds and receive live updates on your Aspen-bound jet.
- The perk model: Not like Uber, Blade offers luxury lounges to chill in pre-flight (free appetizers always justify lofty prices).
Blade could fly downmarket... Tesla's first strategy was entering at the high end of the market — offering a pricey premium product for wealthy consumers — and then moving down (see: Elon's Master Plan). Similarly, Uber originally only allowed customers to hail a black luxury car that cost more than a cab. While these products still aren't cheap, they've become much more accessible over time. Blade could also end up cutting its costs in exchange for volume and scale.
What else we’re Snackin’
- Schrute: The Office leaves Netflix on January 1st, but NBCUniversal's new streamer Peacock will offer the first two seasons for free (then you pay).
- Vax: The FDA said Moderna's Covid-19 vaccine is "highly effective," setting it up for emergency use authorization this week.
- Euregulated: The EU announced sweeping new rules that could force breakups and hefty fines for American Big Tech companies.
- Um: Amazon launches "Made for You," a service that makes custom fit T-shirts based on photos of your torso.
- Fluffy: Chewy plans to expand its pet product offerings, and is exploring ways to monetize its free virtual vet service.
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Wednesday
- Fed announcement, Jerome Powell press conference
Authors of this Snacks own shares of: Moderna, Uber, and Amazon
ID: 1450908