Hey Snackers,
We've been using our SnackFacts this week to highlight racial injustices in the economy. Check out today's fact on redlining below and keep sharing yours @RobinhoodSnacks.
Markets barely budged Thursday as investors took a breather from the energetic rally. Over 1.8M people filed for unemployment last week (about 100K more than expected). Today we get hit with May's unemployment rate — it's expected to be around 20%, up from 14.7% in April.
Airlines help explain the market rally — and their stocks are soaring to post-COVID altitudes
Warren Buffett just spat out his Coke... Exactly a month ago, the investment legend sold Berkshire Hathaway's entire airline stake (at a $3.5B loss). Air travel was down 95% compared to 2019, and even long-term obsessed Warren gave airlines a vote of no confidence. But airline stocks have rebounded big since then:
- Since May 5th, American Airlines stock is up 76%, Delta is up 59%, Southwest is up 45%, and United is up 62% — those are America's 4 largest airlines (and also the ones Berkshire sold).
- As the economy slowly reopens, airline stocks (along with other corona-conomy losers) have been some of the biggest gainers.
- The hype for homebound stocks like Zoom and Slack has chilled — shares of both companies actually fell after they reported high-growth earnings (when success becomes boring).
But it all flies back to the data... Investors are focused on a fresh uptick in air travel, a trend that airlines believe will continue as summer approaches.
- On April 16th, TSA checkpoint data revealed that passenger volume was just 3.6% of last year's. On June 3 (aka 2 days ago), that number rose to 13.6%.
- Airlines are adding more flights as demand picks up: American plans to fly 55% of its domestic schedule in July, up from 20% in May.
Stocks rally because investors focus on the future... And the latest airline data suggests a slow (but steady) return to normalcy. COVID-19 still has no tangible solution. Trade tensions with China are bubbling. Civil unrest is breaking out nationwide. But the Nasdaq 100 just hit a record high and the S&P 500 is down only 8% from its February peak — all because investors are focused on a more blue-skied financial future.
Biggest tech IPO of the year: ZoomInfo's data-crawling biz valued at $13.4B
When you have the same name as a famous person... restaurant reservations come easier. ZoomInfo (not Zoom) is a subscription-based data service that companies buy for their sales teams. ZoomInfo's AI-powered database "crawls" the interwebs to retrieve the juicy deets that employees need to stalk their prey. And it takes a no-BS approach: the slogan is basically "Hit Your Sales Number."
- Biggest tech IPO of the year: ZoomInfo shares soared over 60% in its Nasdaq debut yesterday — it's also the 1st tech IPO of the corona-conomy.
Business reach relies on customer reach... And customer reach relies on the quantity and quality of info you have on your customers. ZoomInfo — which was formed out of DiscoverOrg — is trying to provide that:
- 15K customers use ZoomInfo's data fetching service to build out and reach their sales network — that automates things like building out org charts and collecting emails/digits of potential leads.
- Tech giants like Salesforce, Oracle, and Microsoft have integrated ZoomInfo with their own sales tools. Fun fact: 90% of the Zoom Video sales team ironically uses the ZoomInfo platform to prospect (#meta).
ZoomInfo is the dairy farmer... But it doesn’t control the milk (aka, the data). It highlighted a key risk in its IPO filing: “We rely heavily on internet search engines.” ZoomInfo's core subscription product depends on Google to reel in its customer-stalking info — but search engine algorithms can change, putting it at risk of losing its sales milk.
What else we’re Snackin’
- Ping: Slack shares plunged after the workday regular reported 50% sales growth (basically the same as last quarter).
- Served: Simon Property, America's biggest mall owner, sues Gap over $66M in skipped rent payments (expect more of these suits).
- OG: eBay shares hit an all time high on the corona-conomy ecommerce sales surge — the online OG raised its profit forecast.
- Concede: China will allow foreign airlines to restore some flights to the country, after the Trump admin threatened to bar Chinese airlines from the US.
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Friday
- The May jobs report reveals the latest unemployment rate
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