Ford & VW: The new self-driving power couple
Hey Snackers,
It's official. Worst BBQ season in years (blame record rain and higher cattle costs) — meat-producers are feeling it.
Markets meanwhile enjoyed fresh record highs after the Fed chairman spoke to Congress — he's "seriously concerned" with Facebook's cryptocurrency, and seriously interested in keeping the economy strong by probably cutting interest rates this summer. Now 3rd quarter earnings season kicks off this week.
Who's up...
$5B breaks records — not destinies... Facebook is about to be smacked with a $5B fine by the FTC for years of being casual with users' privacy. Even though that would be a record-high fine, investors were (wait for it) happy with the news. Back in April, Facebook warned it was expecting a penalty close to that amount. Besides, Facebook can pay off that fine with just 30 days of revenue (we did the math).
Live your best life, Snap... Shares have more than tripled since December, thanks to Snap flexing the two biceps of tech: growth and engagement. Its gender-swapping filter in May more than doubled the number of daily app downloads from 600K to over 1.5M, and the new Bitmoji-focused games (including Tennis, launched last week), keep more of those users in the app longer. Investment banks want to friend it.
Namastay right here on the 2nd floor... of Lululemon's new everything-store for sweaty people. The 25K-square-foot flagship in Chicago has 1 boring level of merch, but the rest is an anti-ecommerce playland: 3 studios (yoga, HIIT, and meditation), a chef-designed, influencer-influenced restaurant, and WeWork-worthy work space. Lulu wants 10% of its stores to look like this one by 2023.
...and who's down
Stick it back in the fridge... Freaky fact: Budweiser-owner AB InBev makes 1 of every 4 beers worldwide. It also just canceled the biggest IPO of 2019. The brew-glomerate was planning to spin off its Asia business into a separate publicly traded company — the IPO for Bud Asia would've raised $10B cash that AB InBev could have used to pay off some debt. But Bud wasn't happy with the amount investors were willing to pay for shares, so it pulled out Friday, dropping Bud's stock 3%.
There's a work-life imbalance... Turns out the email crushing office messenger Slack has aggressive competition. For the first time, Microsoft revealed how many people are using its work communicating rival "Teams": 13M. And that's just two years after it launched (Slack is at 10M). The next battle between the two is over integrations: Which will connect you to a Zoom conference call most seamlessly?
The best prescription: not lying... Johnson & Johnson fell 4% Friday on word the Department of Justice is investigating whether it's been truthful about cancer risks in its baby powder. The pharma legend denies it's done anything wrong, but investors are thinking about the 13K+ lawsuits it's facing over the talcum-based product. Plus, the 124-year-old icon is already losing Millennial moms to drama-free babycare startups with 'gram-worthy brands and packaging.
VW and Ford are the newest self-driving and electric power couple
If you can't beat 'em... spend an absurd amount of money with them. Ford and VW just agreed to "collaborate" globally on both autonomous vehicles ("AVs") and electric ones ("EVs"). VW is investing a hefty $2.6B into self-driving startup Argo AI — the Pittsburgh-based tech company Ford already has a stake in. Now German VW and American Ford will use a bunch of Google translate to work in the Steel City together.
Ford = VW... They go together like Big Gulps and cupholders. The pair of car giants share similar histories, but the present is different for both — and that could make this AV and EV pact work:
- History: A car for the people. Henry Ford created that with the Model T. And it's the literal English translation of "Volkswagen."
- Present: One's got trucks, the other's got cars. Ford makes virtually all its money on trucks and SUVs. VW is busy in sedans, coupes, wagons... und Audis... und Porsche.
You need 2 drivers to get to 0 drivers... Since neither plays on the other's turf, they'll be ok sharing secrets in pursuit of the common goal — racing to self-driving tech.
- Alphabet leads the pack with Waymo, which is developing driving brains for cars and is believed to have a value over $100B.
- General Motors owns most of Cruise Automation, which is worth $19B and has investments from Honda and Softbank.
- Volvo & Uber, and BMW & Daimler are the other tag teams.
- Keep in mind: Valuations don't matter as much as results, which nobody's producing as quickly as hoped.
What else we’re Snackin’
- Work: Follow this 1 chart to decide if you actually need to actually schedule that meeting
- Life: How to pack a suitcase
- Money: What a "stock split" is, why it happened, and how it works
- Venture: 3 platforms that help you find a co-founder
- Crypto: What really happened with West Virginia's blockchain voting experiment
- Do: We're hiring a Snacks News Writer — Apply to join us and make financial news digestible
This Week
- Monday: The start of 2 days of Amazon Prime Day. Earnings from Citigroup, Charles Schwab
- Tuesday: Facebook's head of Crypto starts 2 days of congressional grilling in Washington. Earnings from Domino's, JPMorgan, Goldman Sachs, Johnson & Johnson.
- Wednesday: Earnings from Bank of America, eBay
- Thursday: Earnings from Chewy, Microsoft, Morgan Stanley
- Friday: Consumer sentiment report. Earnings from American Express
Disclosure: Authors of this Snacks own shares of Amazon, Lululemon, and Volkswagen
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