Hey Snackers,
A little sweetness to start your weekend: tiny entrepreneurs are getting stimulus checks for their businesses — we're talking Lemonade Stand bailouts, courtesy of Kraft Heinz.
The market dipped as tech stocks struggled Thursday. Last week's 1.3M in jobless claims were disappointingly high, but retail sales surged 7.5% in June.
Twitter suffers a major celeb hack (that could have gone way worse)
What Elon, Kim K, and Biden have in common... All got Twitter-hacked on Wednesday. It started with an Elon tweet (doesn't it always?). But this Elon tweet was almost too strange: "doubling all payments sent to my Bitcoin address." Then the Bitcoin-scammy tweets started coming from Bill Gates. Then came a wave of Bitcoin-scammy tweets from: Barack Obama, Jeff Bezos, Kanye, Apple, and Uber (among others). Then, there was silence...
- For the 1st time ever, Twitter took the extreme step of blocking new tweets from all verified users on Twitter (aka, silencing the blue checkmarks).
- Twitter blamed social engineering. Employees had access to high-profile accounts and were tricked into sharing. But Vice reports that a Twitter employee knowingly helped hackers in exchange for payment. Truth still TBD.
- $120K: What the hackers got from this high-profile crypto scam.
Yet this could have been 100000X worse... Twitter is at the very heart of breaking news, government policy, and market-moving comms. President Trump's account wasn't hacked, but this breach makes you wonder if it could be. Imagine the market and political response if the hackers had sent...
- A tweet from Trump declaring war on a country
- A tweet from Elon saying he's quitting Tesla
- Tweets from Uber and Bezos saying Amazon is acquiring Uber
- Tweets from Biden and Kanye saying they're running together
The Twitter trust is bruised... However this hack was orchestrated, it reveals that Twitter was/is vulnerable. Now the world is questioning the security of its systems. Lawmakers are knocking down Twitter's door to get clarity on how this could happen and why it wasn't stopped sooner (it took hours to block compromised accounts). Some public figures/companies might even quit Twitter as their go-to platform for breaking announcements. All of that would hurt user metrics, ad sales, and profits.
UnitedHealth's most profitable quarter ever, courtesy of your canceled doc visit
More like UnitedWealth... Insurance giant UnitedHealth had its most profitable quarter ever. United took home $6.6B in profit, double the amount it made the same quarter last year. You didn't use the insurance benefits you pay United for monthly — so your canceled April doctor's visit went straight into United's pocket. That was for two reasons:
- You literally couldn't: Elective surgeries and routine visits were paused for months this spring as hospitals focused on COVID. Don't even think about a hip replacement.
- You were scared to: People stayed away from germy hotspots (hospitals and doctors offices) out of fear. Mole removal can wait if it means a lower corona-exposure.
Your health insurance policy might be complex, but your health insurers' business is simple: maximize premiums, minimize payouts. That's exactly what United did last quarter: The money it paid out for COVID care was way less than the money it saved on all the care you didn't use. One magic metric tells that story...
Medical Loss Ratio ("MLR"): The amount of money United pays out, divided by the amount it receives in premium payments.
70%: United's MLR last quarter, a historic low. United paid just 70 cents in claims for every dollar it received in premiums.
That's significantly less than it was paying a year ago, when MLR was 83%. Less payout = more profits.
This profit doesn’t look good on healthcare... Health insurers profited on customers paying for benefits that they couldn't use (because, pandemic). Also, devastating job losses had millions losing employer-sponsored coverage. Regulators have called for some of the industry's profits to be returned to customers. Some health insurers have offered premium credits and discounts. United says it paid out $1.5B in discounts — but it still took home $6.6B in just 3 months.
What else we’re Snackin’
- Flixin: Netflix added 10M new subscribers last quarter, beating the ~8M expected — shares dipped as CEO Reed Hastings promoted someone else to co-CEO.
- Dashing: DoorDash partners with Walgreens to deliver OTC drugs, just a month after partnering with CVS for same-day deliveries (#pharmaplayer).
- TikZuck: As a possible TikTok ban looms, Facebook tees up the launch of its TikTok competitor, "Instagram Reels" (Zuck's been waiting for this moment).
- AirBuds: JetBlue and American will share passengers to fend off competition — their new partnership allows them to sell seats on each other’s planes.
- Public: Uber acquires public transport software company Routematch, doubling down on its non-gig, public transit ambitions.
- Cheese: Domino's US sales soar 16% on lockdown pizza delivery/takeout (simple story, delicious moral).
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Friday
- Earnings expected from BlackRock
Disclosure: Authors of this Snacks own shares of Apple, Amazon, and one Bitcoin
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