Hey Mealers,
In case you haven't heard, we're changing our name from Robinhood Snacks to Robinhood Meals — we'll begin covering long stories stuffed with so many negligible details, you'll feel like you just downed an entire Thanksgiving feast (plus a side of jargon) once you're done. Join us on this journey to a more calorie-dense course. Estimated read time: 6 hours, 23 minutes.
Just kidding, happy April Fools' Day. Now back to reality: the market wrapped up a brutal quarter yesterday — highlights include the fastest fall into a bear market ever, the S&P's most volatile month on record, and the Dow's worst 1st quarter in history. In other news...
Amazon's ultimate stress test causes cracks from both sides: workers and customers
This is not a drill... Amazon is going through an ultimate, real-life stress test right now. The delivery giant is coming in especially clutch during these stuck-at-home months (feels like an era). And it's feeling the stress from from both sides:
- Overwhelming demand from customers is straining its supply chain and getting Prime subscribers riled up on delayed orders + unavailable products (try ordering Lysol wipes). Amazon's site traffic was up 32% from last year with almost 640M weekly visits. From Feb 20-Mar 23, Home/Kitchen sales alone surged 1,861%.
- Worker unrest is exacerbating the stress, as workers demand better pay and health protections for dangerous conditions. As many as 1/2 of workers haven't shown up to jobs at some warehouses because of lacking masks/sanitizers. On Monday, warehouse workers on Staten Island staged a walk out (and Amazon fired the lead organizer). Yesterday, some of Amazon's Whole Foods employees staged a "sick out," demanding hazard pay.
Safety vs. demand... The more demand there is from customers, the more Amazon really needs its workers to be ready, able and willing to work.
- But this overwhelming demand comes with stressful situations for workers, like reports of working overtime in close contact without adequate health protections.
- "Essential" workplaces are all struggling with some form of this, as they juggle supplying essentials to the stuck-at-home masses with ensuring worker safety.
Amazon can get through this — little guys might not... Despite the strain, Amazon's main businesses are thriving right now — AWS cloud computing is booming on WFH demand and orders on Amazon.com are matching holiday season levels. So it can swing making changes to adapt:
- It's hiring 100K new workers (even Lyft told its workers to go work at Amazon), offering paid sick leave to possibly infected workers, giving paid time off to part-time workers, and raising hourly wages for all its delivery/fulfillment workers by $2 through April.
- These costs add up, but Amazon can stomach them to save its biz — smaller companies might not be so lucky.
Zoom is more popular than ever — but now it's got some major privacy issues
With great power, comes great responsibility... Video conferencing service Zoom has skyrocketed in popularity, riding the wave of the virus-induced mass WFH situation. But even the most popular video conferencing app in the school has issues (and more than a few bullies) — we'll get to those later:
- Zoom added more users in the first 2 months of this year than in all of 2019, racking up 2.2M new monthly users by the end of February.
- Now it's taken the Homecoming crown for the world's most popular iPhone and Android app.
- Zoom stock is also making friends — its share price has more than doubled since late January while the rest of the market has dropped over 20%.
But Zoom has some (not so hidden) vulnerabilities... And Zoom's privacy fails are getting more heat now that it's really relevant:
- Last year: Zoom had a security flaw that let hackers hijack your webcam.
- Last week: Vice reported that Zoom was sending users' data to Facebook, without really telling them about it, even if they didn't have a Facebook account (sketch).
- Now: "Zoombombing" incidents — professional Zoom meetings get crashed by, say, a naked person shouting profanities. They're surging.
- So: NY's Attorney General just sent Zoom a letter saying her office was "concerned" about this seemingly lax security.
Zoom should've overreacted to privacy concerns... but it didn't. Privacy is Big Tech's #1 threat right now — Zoom is sort of newly initiated to the Big Tech Club, so it doesn't seem to be as sensitive to this. Privacy ambiguities don't fly for big services used by millions of people (Mark Zuckerberg can tell you all about this). Zoom didn't show investors a real effort to hunker down on privacy — its stock is down 8% over the week.
What else we’re Snackin’
- Wanted: Video-chat app Houseparty offers a $1M bounty to whoever finds the individual(s) who started a "smear campaign" that alleges the app was hacked.
- Augment: Facebook strikes a deal with UK display-maker Plessey to co-produce new Augmented Reality tech (like AR glasses).
- Build: President Trump says he wants to leverage low interest rates to pass a long-awaited infrastructure bill, suggesting up to $2T for the building of roads, bridges, etc.
- Protect: Under Armour says it will manufacture and donate 500K facemasks for medical workers at the front lines of the COVID-19 outbreak.
- Closed: Simon Property, the largest US mall owner, furloughs 30% of its employees — they'll have to take an unpaid leave of absence.
- Drop: Xerox drops its bid for a hostile takeover of HP, according to #PFWTM (people familiar with the matter).
Wednesday
- Earnings expected from Lamb Weston and Dave & Buster's
Disclosure: Authors of this Snacks own shares of Amazon
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