🛍️ BNPL + subscriptions
Hey Snackers,
To find real love, some are going artificial: an AI dating app lets humans use chatbots to screen romantic candidates with bot-to-bot virtual dates. In one instance, a bot asked this as an icebreaker: “if you own any pet, and it accidentally launched a nuke, how would it have done it?”
The S&P 500 notched its fifth-straight record close yesterday. US GDP growth came in stronger than expected, boosting optimism that the economy is in soft-landing territory.Â
🧠Quiz whiz: Test your biz news know-how with the Snacks Seven Weekly Quiz. Try the first Q here:
Police recently arrested a woman in connection with the theft of $2.5K worth of… what? (Check your answer here.)
Klarna launches an $8/mo subscription as BNPL giants swipe up a fresh revenue stream
Buy & subscribe… Klarna’s rolling out a subscription service to lock in monthly $$ from loyal BNPL (buy now, pay later) users. Refresher: the Swedish fintech titan lets folks pay in four installments when they check out from 200K+ retailers, including Instacart, Wayfair, and Sephora. Soon, Klarna Plus subscribers who pay $8/mo will get service fees waived and earn double rewards points. Other perks include members-only discounts from big brands like Nike.
Unicorn w/ fewer horns: Klarna’s valuation sank to $6.7B last year from $45B as the pandemic-ecomm boom cooled and recession jitters rose. Now it’s looking for ways to boost revenue ahead of its anticipated US IPO.
BNPL goes PNPL… pay now and pay later. One-fifth of Americans under the age of 40 use a BNPL service, and subscription models could help companies boost usage and earn recurring revenue. Klarna’s not the only one taking the plus route: Afterpay launched a $10/mo sub last year (Afterpay Plus, natch), letting shoppers check out wherever mobile payments are accepted. Affirm is also said to be looking to launch a subscription plan (...Affirm Plus) that would offer a 0% annual percentage rate on purchases up to $2.5K.
The flip side: Financial experts worry that the BNPL boom could create more money troubles for US consumers grappling with a record $1T+ in credit card debt.
Recurring is alluring… BNPL businesses already have slim profit margins, and higher interest rates have made funding consumer shopping sprees even pricier. By offering monthly plans, companies hope to generate a steady flow of revenue with recurring payments. But subscription fatigue may be peaking: according to one survey, 76% of consumers say financial strain is causing subscription burnout.
Go beyond the surface with market depth
Following orders… Professional traders need to know more than just current price info: they want depth-of-book data, which allows them to see open orders at all available prices. Analyzing depth-of-book can offer clues into existing supply and demand, areas of support and resistance, and help traders identify optimal prices for their orders.
Nasdaq TotalView powers the need-to-know data the pros rely on, but it’s also available to many retail investors within their brokerage app.
The takeaway: If you’re looking for an edge, analyzing market depth can potentially help you understand what lies beneath a stock’s price. You can get access to TotalView via Robinhood Financial Gold and other retail broker offerings.
Americans’ good vibes soar as stocks hit record highs and US GDP impresses
Hitting the VIP and tippin’ 30%... Peeps are feelin’ good. According to a Morning Consult poll, this month US consumer sentiment (aka: how people feel about the economy and their finances) jumped across all income groups — but especially among those earning $100K+. That comes on the heels of the University of Michigan’s report, which found that in January consumer sentiment popped 13% to its highest level in more than two years. The past two months mark the biggest 180 in consumer sentiment since 1991. Notably, those warm fuzzies are being felt across the board:
All inclusive: Soaring sentiment was seen in consumers of different ages, income levels, and locations.
Both parties party: Democrats and Republicans both had their highest consumer sentiment readings since the summer of ’21.
Ridin’ high… It’s not just the #vibes that are popping. Yesterday, GDP data showed that last quarter the US economy grew at a 3.3% annualized rate— demolishing expectations of slower growth. What’s more, the S&P 500 has been cruising at record highs. FYI: among high earners, consumer sentiment is highly correlated to the stock market. And while wealthier Americans have more stock market wealth, as of 2022, a record 58% of US households owned stock. Also: job insecurity fears fell at the end of last year, though layoffs have been making headlines this month.
Economic mood swings take time… and often are lagging indicators. For much of last year, economic signals ranging from cooling inflation to resilient spending flashed green. And yet, that wasn’t reflected in consumer sentiment. Now, possibly tipping the scales: after nearly two years of real wage declines, last quarter wages rose even when adjusted for inflation — and consumer sentiment has risen with them.
The Crypto Catch-Up…
⚖️ Judgy… Terraform Labs, the biz whose 2022 algo-stablecoin implosion vaporized $40B in investor value and helped kick off crypto winter, filed for bankruptcy. The move comes as VCs once again dip their toes into stables and the total stablecoin market cap climbs.
🤹‍♀️ Quirky… A crypto developer put a playable version of the ’90s smash-hit computer game “Doom” on the dogecoin blockchain. An adaption of bitcoin’s ordinals protocol, dubbed doginals (really), now lets users store large amounts of data on dogecoin.
🤔 Sus… Hackers stole $1.7B from crypto platforms last year, according to a new report from Chainalysis. That’s more than a 50% drop on the year as DeFi protocols battened down their hatches, though the total # of attacks actually increased.
What else we’re Snackin’
Query: The FTC said it’s launching an extensive inquiry into AI leaders including Microsoft, Alphabet, OpenAI, and Amazon. The competition regulator will be looking into cloud and AI partnerships.
Teslow: Tesla shares fell 12% yesterday, their biggest slump in over a year, after the company missed sales estimates and warned of a slowdown ahead. Broader US EV sales have plateaued recently.
Swipey: Visa reported stronger-than-expected 9% revenue growth, citing healthy consumer spending. Payment volumes and transactions swelled as folks spent big over the holidays.
MoreBlues: Alaska Airlines said that the grounding of its Boeing 737 Max 9s could lead to a $150M profit hit this year. United Airlines, the other US carrier that uses the jets, predicted a Q1 loss.
Open: Apple will allow downloads outside of its App Store in the EU in response to a new competition law. This month, the US App Store also said it will allow outside payments as antitrust pressure mounts.
Friday
Earnings expected from American Express, Norfolk Southern, and Volvo
Authors of this Snacks own bitcoin, dogecoin, and shares of: Alphabet, Amazon, Apple, Microsoft, and Tesla