🛻 Rivian’s rocky recall
Hey Snackers,
Global markets sagged yesterday after Russia launched its biggest air strikes on Ukraine since its invasion in February. At least 14 people were killed, and swaths of the country are without electricity, water, and heat.
The techy Nasdaq led yesterday’s slump, closing down 1% after hitting a two-year low as chip stocks sagged. The VIX (aka: Wall Street’s “fear gauge” index) spiked to over 32.
Rivian recalls nearly all its electric trucks over safety concerns, denting its newly minted rep
Rare Rivian sighting on I-90… had to snap a pic. Rivian’s e-pickups look like something out of the future, but the Amazon-backed EV maker has built only 15.3K vehicles since starting production last fall. That’s partly why this news hit investors hard: on Friday, Rivian said it was recalling 12K vehicles to double-check that a fastener in the steering assembly was safely tightened. Rivian estimates just 1% of vehicles have the defect, and plans to complete the checks and repairs within 30 days.
- Bad news: Rivian stock plunged 7% yesterday and is down 69% this year. Since IPO’ing in November, Rivian has fallen short of production targets and disappointed on forecasts.
- Good news: Last week Rivian reported its best quarter yet with 7.3K EVs built from July to September and said it was on track to make 25K vehicles this year (as targeted).
Save a horse… drive an e-truck. Rivian became the first to bring e-pickups to customers’ driveways, but the competition’s heating up. In December GM’s Hummer EV rolled out, and customers began receiving Ford’s F-150 e-pickup in May. This month, Lordstown Motors said it has (slowly) started production of its Endurance e-truck. We’re still waiting on Tesla’s Cybertruck…
Reputation matters more than money… especially when competition is hot. The recall isn’t likely to make a dent in Rivian’s coffers: it had an impressive $15.5B in cash on hand as of last quarter (way more than most of its rivals). But the scale of this recall — plus the fact that Rivian said the fastener issue could, in rare instances, lead to a loss of steering control — has already dented its rep.
A crypto bridge was hit with a $570M hack, which led to a paused blockchain and centralization concerns
Blockchain bridges… are showing cracks. Crypto bridges let people move coins between different blockchains (think: bitcoin to ethereum) and are a crucial pillar of decentralized finance (DeFi). On Thursday hackers got their hands on $570M in crypto by exploiting a cross-chain bridge between the Binance-affiliated BNB Beacon Chain and BNB Smart Chain.
A crypto cure… worse than the DeFi disease. Binance tried to calm hack-weary investors with a statement saying that a majority of the illicit coins had been frozen — hackers did successfully move $100M out of the Binance ecosystem (still nothing to sneeze at). Good news, though, right? Maybe not. The centralized devil is in the details:
- Hotchain: Blockchains brag about being decentralized and censorship-resistant. It's a big selling point.
- Lockchain: To thwart last week's hackers, 19 of BNB Smart Chain's 26 validators agreed to pause the entire chain, a rare move that temporarily prevented withdrawals and deposits.
- Notchain: Freezing solved one problem (think: hackers making off with the full $570M), but it raised another: is a chain truly decentralized if a small group of people can suspend it?
Bridges are crypto’s Achilles’ heel… Crypto-bridge hackers have snatched over $2B, including $625M from Ronin and $325M from Wormhole earlier this year. But it's not just $$ at stake: hacked cross-chain bridges show that vital DeFi infrastructure remains vulnerable to thieves. And if a fix isn't found, fears of even larger losses could lead to increasingly drastic responses, which threaten to undermine crypto's core premise: decentralization.
What else we’re Snackin’
- MetaVRse: Meta’s expected to unveil a new VR headset today. But even though it’s spent billions on its meta-ambitions, its flagship metaverse (Horizon Worlds) remains buggy and has just 300K users.
- Robo: Uber announced a 10-year partnership with robotaxi maker Motional to offer driverless rides later this year. It could gain an edge: Uber says driverless rides = shorter wait times and lower fares.
- ChiChip: US regulators announced rules that limit the sale of certain high-tech semiconductors to China, sending Chinese chip stocks tumbling. The goal: limit Beijing’s advanced military systems.
- Inflated: Desperate times call for desperate measures? A startup says it’s developed a technique that lets builders inflate a home and pump in concrete walls in under an hour for one-fifth the price of a traditional build.
- Nobel: Former Fed chief Ben Bernanke won a share of the Nobel Prize in economics. Bernanke and his coauthors’ research redefined monetary policy during financial crises (think: rock-bottom interest rates and loans to banks).
Tuesday
- Earnings expected from Pepsi
Authors of this Snacks own: bitcoin and ethereum and shares of Amazon, GM, Tesla, and Uber
ID: 2468321