__Binged “Anatomy of a Scandal”...__ Netflix knows we can devour a limited series as if we had unlimited time. The streaming leader revealed yesterday that it [*lost*](https://www.wsj.com/articles/netflix-earnings-q1-2022-11650325682) 200K subscribers last quarter (it was expected to add 2.5M). Even worse: it expects to lose 2M global subs this quarter. Flix shares plunged 25% after hours and are down over 40% this year.

- __Old plot:__ Netflix saw explosive growth in 2020 as Emily in sweats binged “Emily in Paris.”
- __Current plot:__ The pandemic boom led to subscription saturation (#subscripturation) and slowing growth. Netflix added 18M paid subs last year, versus 37M in 2020. Now it’s *losing* subs. 
- __New plot:__ To spur growth, Netflix has expanded beyond content. Last year it [launched](https://snacks.robinhood.com/newsletters/7Kx3ILkPTkUU1EpjaVEiu7/articles/44NJYUat1m1imvGSWMklvL/) a show-themed merch shop (think: “Ultimatum” [tees](https://www.netflix.shop/collections/the-ultimatum)) and five in-app [games](https://www.cnbc.com/2021/11/02/netflix-launches-its-first-mobile-games.html). It’s also expanded into “[experiences](https://techcrunch.com/2022/04/11/stranger-things-fans-can-explore-the-upside-down-in-new-nyc-experience/)” like a “Stranger Things” Upside Down world in NYC.

__Netflix’s ultimatum...__ Unlike Hulu, HBO Max, and other ad-supported streamers, Netflix has rejected commercials, relying instead on subscription $$. In 2019, CEO Reed Hastings said he’d never do ads, “period.” But high prices (#flation) + subscription overload (#subscripuration) have made it harder for consumers to afford multiple streamers. Fast-forward to now:

- __Netflix__ CFO Spencer Neumann recently cracked the door open to ads, saying "never say never" to an ad-supported tier. 
- __Even [Disney+](https://robinhood.com/stocks/DIS)__ is [launching](https://www.nytimes.com/2022/04/19/business/media/netflix-amazon-disney-ads.html) a lower-priced ad tier to hit its subscription goals.

From “never ads” to “never say never” to ads (Ethan Miller/Getty Images)

Ultimatum

__It’s the price-cutting paradox…__ Lowering prices can boost revenue — but only if customers who were paying “premium” prices don’t downgrade. Netflix’s $15.50/month standard plan may be out of reach for many budget-conscious households, so adding a cheaper plan supported by commercials could help it grab a new market. The risk: subscribers who are paying for pricier ad-free plans might downgrade (that [*hasn’t*](https://www.nytimes.com/2022/04/19/business/media/netflix-amazon-disney-ads.html) happened to HBO Max yet). As streaming competition intensifies, it may be worth the risk for the Flix.

Netflix lost 200K subs last quarter and expects to lose millions more. Now ads could be its saving grace

__Slow burn…__ Today is 4/20, the unofficial holiday of cannabis connoisseurs. It’s been a decade since recreational pot was first legalized in the US, in Washington and Colorado. Since then, 16 more states and DC have followed. While national legalization remains an open question, the industry has found ways to [advance](https://fortune.com/2022/04/11/legal-marijuana-sales-33-billion-2022/): 

- __Legal cannabis sales__ are expected to total $33B in 2022, a 32% jump from last year.
- __Three quarters__ of Americans now live in states with some form of legalized weed.
- __520K workers__ are now employed in the US cannabis industry.

__Put that in your pipe and vote on it…__ This month the House [passed](https://www.nbcnews.com/politics/congress/house-vote-bill-legalize-marijuana-rcna22527) legislation to legalize cannabis nationwide. But the bill’s stuck in the Senate, where it’s unlikely to pass because of partisan gridlock — even though it has [support](https://news.gallup.com/poll/356939/support-legal-marijuana-holds-record-high.aspx) from nearly 70% of voters. The absence of a federal law has been a buzzkill for cannabis companies as they try to expand nationally:

- __Green stocks turn red:__ Shares of billion-dollar cannabis giants __[Tilray](https://robinhood.com/stocks/TLRY)__ and __[Canopy Growth](https://robinhood.com/stocks/CGC)__ have fallen to five-year lows as legalization efforts have stalled. Many canna-businesses have chosen to sell in only one state to avoid complex interstate commerce laws.
- __Nowhere to put the green:__ Banks like __[Chase](https://robinhood.com/stocks/JPM)__ and __[Citi](https://robinhood.com/stocks/C)__ and payment processors like __[Visa](https://robinhood.com/stocks/V)__ won’t handle cannabis $$ for liability reasons — even where it's legal. But small banks and credit unions are [embracing](https://www.bloomberg.com/news/newsletters/2022-01-18/marijuana-banking-is-moving-forward-despite-federal-uncertainty) the industry and could open the door to “cannabis banking.”

__High demand doesn’t always assure fast growth…__ Sometimes it’s in the hands of politicians. President Biden hasn’t pushed for pot legalization, which makes it unlikely the Dem-controlled Senate approves the current bill. But analysts think lawmakers may greenlight canna-banking this year, which could help cannabis companies expand to multiple states even without full legalization.

A decade after the first legal toke, a lack of federal laws still weighs on cannabis companies

Netflix lost subscribers for the first time in a decade. Ads could be its saving grace

Dow Jones

S&P 500

Nasdaq

Bitcoin

The term “4/20” was apparently coined by a group of California teenagers in 1971.

🍿 Netflix + ads?

__Bitter medicine…__ __[Twitter’s](https://robinhood.com/stocks/TWTR)__ taking drastic measures to get rid of its Elon headache — a sign it *really* doesn’t want to be under the Technoking’s tweet-happy thumb. Quick recap: two weeks ago Elon Musk [revealed](https://snacks.robinhood.com/newsletters/5lepo7UAINWNcn90JfK6HE/articles/68N6hnLpsgBLa7R4OZx8YF/) a 9.2% stake in Twitter. He then made a $43B offer to buy the company (after declining a seat on its board). Twitter responded by creating a “poison pill” — a tried-and-true way for companies to avoid a hostile takeover. 

- __How it works:__ If Elon tries to buy 15% of Twitter’s shares, the pill kicks in and lets every shareholder *except* Elon buy shares at half price — making a buyout way costlier for him (and diluting Twitter’s stock in the process). Twitter’s board voted unanimously to adopt the plan for one year. 

__The opposite of shareholder activism…__ is board *react-ivism*. Poison pills were invented in the 1980s to stop “corporate raiders” from taking over public companies. To date, no buyer has [ever](https://qz.com/2155991/what-is-a-poison-pill-inside-twitters-plan-to-block-elon-musk/) swallowed a poison pill and forced a takeover at an inflated price (they usually back down). 

- __Taking their pills:__ __[Netflix](https://robinhood.com/stocks/NFLX)__ [used](https://money.cnn.com/2012/11/05/technology/netflix-poison-pill/) a poison pill to stop activist investor Carl Icahn from taking over in 2012, and __[Papa John’s](https://robinhood.com/stocks/PZZA)__ adopted one to [prevent](https://www.nytimes.com/2018/07/23/business/papa-johns-john-schnatter-poison-pill.html) disgraced founder John Schnatter — Papa John himself — from regaining control in 2018.

Case of Elon-itis? Take one and call us in the morning (Peter Dazeley/Getty Images)

Swallow

__But poison pills aren’t 100% effective…__ and if anyone’s willing to swallow one, it might be Elon. With enough money and influence, it’s possible to avoid a poison pill. Theoretically, Elon could persuade 51% of shareholders to replace Twitter’s board — and then buy Twitter anyway, thereby circumventing the pill. But that would take a while, and Twitter’s board could choose another buyer in the meantime. Already, private-equity giants __Thoma Bravo__ and __Apollo__ are [reportedly](https://www.reuters.com/technology/apollo-global-considers-participating-bid-twitter-wsj-2022-04-18/) considering bids.

Twitter pops a “poison pill” to block Elon’s buyout. One possible side effect: selling to someone else.

__The sound of Pop2K...__ a road-trip playlist must. __[SiriusXM](https://robinhood.com/stocks/SIRI)__, the home of Howard Stern and all-day Bruce Springsteen radio, was once a struggling player in a dying industry. It has since turned its fortunes around by focusing on cars… and drivers who’d rather flip on their fave station than fiddle with an aux cord. But Sirius shares fell nearly 3% yesterday after an analyst said the car industry’s ongoing chip shortage could turn into a profit prob. 

- __Last quarter Sirius’ free-trial subscribers__ fell 19% from 2020, partly because of declining car sales. FYI: Sirius relies on converting its trial members into full-time subscribers to make $$. 

__Capitalizing on the commute...__ Sirius’ market cap is nearly the same as __[Spotify’s](https://robinhood.com/stocks/SPOT)__ (about [$26B](https://robinhood.com/stocks/SPOT)), thanks to its 32M+ monthly subscribers. Over the years, automakers from __[GM](https://robinhood.com/stocks/GM)__ to __[BMW](https://robinhood.com/stocks/BMWYY)__ have teamed up with Sirius to integrate its satellite-radio software into their newest models. Now over 80% of new cars sold are Sirius-equipped. But global supply shortages that’ve made car inventory so tight have also put the squeeze on Sirius to diversify:

- __Sirius is focused on creating [content](https://investor.siriusxm.com/investor-overview/press-releases/press-release-details/2022/SiriusXM-Reports-Fourth-Quarter-and-Full-Year-2021-Results/#:~:text=SiriusXM%20Revenue%20Increased%204%25%20to,the%20full%20year%20of%202020.)__ for on and off the dashboard, like hosting exclusive virtual concerts and building up its slate of podcasters.

Tunes

__Low churn is the key to profits…__ Till now, Sirius has largely dodged its car troubles by providing a wide variety of curated programming for road warriors, whether they want Top 40, podcasts, or Howard. And they’re still tuning in: Sirius’ churn rate (aka the # of subscribers who opt-out each year) is less than 2%. That’s better than traditional streamers like __[Disney+](https://robinhood.com/stocks/DIS)__, Spotify, and even Netflix. Yet its long-term success is still tied to the health of the car market.

SiriusXM could be the next company hit hard by the chip shortage, but “sticky” subscribers are helping cushion the blow

Twitter prescribed a “poison pill” to stop Elon’s buyout, but it’s not 100% effective

People born in early 1980s — aka elder millennials — held 8.6 jobs, on average, before they turned 35

💊 Twitter’s “poison pill”

__Open-mic night in the metaverse...__ where the drinks are virtual and the comedians can only roast your avatar. But if the comedy club wants to sell merch or tickets, they'll have to give __[Meta](https://robinhood.com/stocks/META)__ a huge cut. Last week Meta became the largest company to unveil its metaverse-monetization plans. Facebook’s parent [will charge](https://www.reuters.com/technology/meta-take-nearly-half-sales-made-by-its-metaverse-creators-fees-2022-04-13/) creators a 47.5% fee on sales of digital goodies and experiences sold through its VR platform, Horizon Worlds. Some background:

- __Horizon Worlds__ is *kind of* like the App Store, but in 3D (because we're not removed from reality enough already). You need its $300 Oculus VR headset to access it.
- __Instead of apps__ made by programmers, there are “worlds” created by everyday users (think: building a Sims house). And you can hop between worlds.
- __Avatars play and socialize__ in VR. Imagine: Latin dance clubs and games where all players can hear each other (feat. [screaming kids](https://youtu.be/zVWC1tnClSw?t=157)). 
- __Meta released Horizon Worlds__ in December after years of positioning it as a metaverse building block and says it has 300K users so far. 

__Back to met-onetization…__ Meta’s decision to take nearly half of creators’ sales is raising eyebrows. It’s significantly more than __[Apple’s](https://robinhood.com/stocks/AAPL)__ infamous 30% “App Tax” on in-app purchases and downloads, which Zuck himself has criticized. It’s also more than NFT platforms like __Sandbox__, __Decentraland__, and __OpenSea__ get — they take between 2% and 5%. 

- __Horizon’s “creators”__ include regular people as well as corporations like Wendy’s and its “[Wendyverse](https://www.thedrum.com/news/2022/03/30/wendy-s-unveils-wendyverse-within-meta-s-horizon-worlds).” Meta [said](https://www.oculus.com/blog/testing-new-tools-for-horizon-worlds-creators-to-earn-money/) it’ll test new ways to sell digital accessories and access to exclusive spaces (like: influencer AMAs).

Brb, creating my metaverse (Miguel Candela/Anadolu Agency via Getty Images)

MetaMoney

__If you build it, they might *not* come…__ Meta’s putting the cart before the virtual horse. For years Facebook put off monetizing through ads, prioritizing growth over $$. As J. Timberlake [put it](https://youtu.be/k5fJmkv02is?t=100) in “The Social Network”: “You don’t even know what the thing is yet.” Meta’s trying to profit from Horizon before it takes off, and has already invested $10B in its meta-vision — but it’s still TBD whether consumers will spend $300 on bulky headsets to hang there.

Meta reveals its hefty metaverse-monetization plans, taking a bold risk that could alienate “creators”

__Crypto in the capitol(s)…__ While the federal government debates how to regulate cryptocurrencies, lobbyists are taking a state-by-state approach. Pro-crypto lawmakers in states like Florida have passed bills that make it easier for the industry to operate. Already this year 150+ crypto-related bills have been proposed in 40 states. But on the federal level, the Biden admin [thinks](https://www.wsj.com/articles/washington-debates-cryptocurrency-rules-with-sights-set-on-stablecoins-11649588581) stablecoins (pegged to currencies like the USD) could be the real jumping-off point for digital-currency regulation.

__The new silver and gold…__ are lithium and cobalt, the crown jewels of the electric-vehicle biz. The metals are essential to EV batteries, and their prices are soaring: In the past decade cobalt prices have 3X’d and lithium prices have *18X’d*. Now carmakers are securing supply. Last week, __[Ford](https://robinhood.com/stocks/F)__ reportedly [bagged](https://www.wsj.com/articles/gm-strikes-deal-to-secure-cobalt-for-electric-car-batteries-11649775349) a deal with extraction startup __Lake Resources__ to pull lithium from Argentina, while __[GM](https://robinhood.com/stocks/GM)__ teamed up with mining giant __[Glencore](https://robinhood.com/stocks/GLNCY)__ to nab cobalt from Australia. But supplies are still so low that __[Tesla’s](https://robinhood.com/stocks/TSLA)__ considering [mining](https://www.cnbc.com/2022/04/08/elon-musk-telsa-may-have-get-into-mining-refining-lithium-directly.html) its own metals.

Zoom Out

Stories we’re watching...

__The road to net zero...__ This Earth Day (Friday) high oil prices and the war in Ukraine have boosted global interest in energy independence and sustainability. One option gaining steam: nuclear energy. Last week South Korea (one of the largest fossil-fuel importers) [reversed](https://www.ft.com/content/6329e02a-d3e9-4812-9062-d5fda8ad7c61) plans to phase out its nuclear projects. In the US, President Biden has already committed $1B to nuclear investments and research. Shares of some uranium companies like __[NexGen](https://robinhood.com/stocks/NXE)__ and __[Uranium Energy](https://robinhood.com/stocks/UEC)__, which make the fuel for nuclear power plants, have more than doubled.

__Up in the air...__ It’s a pesky paradox for US airlines: flight demand for everything from domestic beach weekends to European tours is soaring heading into the summer travel season. But so are airlines’ operating [costs](https://www.reuters.com/business/aerospace-defense/us-airline-demand-costs-soaring-earnings-kick-off-2022-04-12/), like labor and fuel, which spiked 30% over the past month. Airlines have [raised](https://www.wsj.com/articles/airfares-jumped-nearly-11-in-march-from-prior-month-11649803255) fares in a push for profitability, but so far, vacay-hungry fliers don’t seem deterred. __[Delta](https://robinhood.com/stocks/DAL)__ said last week that it became profitable again in March. We’ll see if __[United](https://robinhood.com/stocks/UAL)__, __[American](https://robinhood.com/stocks/AAL)__, and __[Spirit](https://robinhood.com/stocks/SAVE)__ follow suit when they report this week.

Events

Coming up this week...

- __[Throwback](https://snacks.robinhood.com/newsletters/jtHnqwq8xydDjbgiulBNB/articles/52RH4YD9VAEjyTWHTDlDNR/):__ Time to limber up: __[Nintendo](https://robinhood.com/stocks/NTDOY)__ is reviving its old “Wii Sports” game for its newer Switch console, banking on the appeal of lo-fi, motion-controlled nostalgia over ultra-immersive AR.
- __[Sneaky-flation](https://snacks.robinhood.com/newsletters/jtHnqwq8xydDjbgiulBNB/):__ Companies are getting creative in handling inflation: __[Pepsi’s](https://robinhood.com/stocks/PEP)__ shrinking packaging to mask price hikes, __[GM’s](https://robinhood.com/stocks/GM)__ ditching heated seats, and __[Hilton’s](https://robinhood.com/stocks/HLT)__ nixing daily housekeeping. 
- __[Upstream](https://snacks.robinhood.com/newsletters/aHxrhlzudIs7bopZbJSGR/articles/jw8WzXcTXZhgCC7cyV676/):__ __[Warner Bros. Discovery](https://robinhood.com/stocks/WBD)__ is Hollywood’s newest streaming heavyweight: after last week’s $43B media merger, HBO hits like “Euphoria” and Discovery classics like “Shark Week” are under the same roof.

ICYMI

Last week's highlights...

Meta reveals hefty metaverse-monetization plans, a bold risk that could alienate “creators”

The average tax refund is set to top $3,400 this year, nearly 14% higher than last year

👾 Metaverse money

__Plus isn’t always positive…__ CNN+ is off to a rough start. The network that invented cable news launched its $6/month subscription streaming service two weeks ago. It went live days before CNN’s parent [merged](https://snacks.robinhood.com/newsletters/aHxrhlzudIs7bopZbJSGR/articles/jw8WzXcTXZhgCC7cyV676/) with Discovery to form __[Warner Bros. Discovery](https://robinhood.com/stocks/WBD)__, and it raised [questions](https://www.axios.com/cnn-plus-cuts-warner-brothers-discovery-1be0ac3a-6952-4af0-b8e2-03dd6ae0839c.html) that the launch may’ve been rushed. Sure enough, early numbers don’t look good:

- __Tiny viewership:__ CNN+ is said to have fewer than 10K daily viewers, making its goal of 2M subscribers in its first year seem far-fetched. __[Disney+](https://robinhood.com/stocks/DIS)__ got 10M subs on its *first day*.
- __Limited programming:__ The app does *not* have live news (more on that in a sec). It *does* have a Jake Tapper-hosted book club and a show about Anderson Cooper navigating parenthood.
- __Big cuts:__ Execs are reportedly planning to slash hundreds of millions from the project’s budget, which was originally $1B.

__Stuck in the carriage…__ As more consumers ditch cable, media OGs have repackaged their content in apps to appeal to the cord-cutting crowd. Discovery+, Disney+, and HBO Max offer the programming those brands are known for — *plus* extra content (hence all the + signs). But CNN can’t include live news in its app because of “carriage contracts.”

- __Carriage contracts__ give cable giants like __[Comcast](https://robinhood.com/stocks/CMCSA)__ and __[AT&T](https://robinhood.com/stocks/T)__ exclusive rights to live news from outlets like CNN — and prevent simulcasts on apps.
- __Cable sold separately:__ If you subscribe to CNN+, you don’t actually get CNN. In contrast, HBO Max subscribers get *all* HBO shows and then some.

Can CNN’s A-Team get people to pay for streaming news? (Slaven Vlasic/Getty Images)

Nonplussed

__Streaming is fighting subscription fatigue…__ For news junkies who already pay for cable — or cord-cutters who pay for 12 different TV apps and don’t know Chris Wallace from Chris Hemsworth — CNN+ may feel unnecessary. One possible solution: bundling. Many analysts expect CNN+ to get bundled with other WBD apps like HBO Max and Discovery+ to attract subscribers.

CNN’s new streaming service is reportedly pulling in fewer than 10K daily viewers, and it’s raising concerns that cord-cutters won’t pay for news

__A DIY dilemma…__ [Millions](https://www.wsj.com/articles/etsy-sellers-strike-as-site-ramps-up-to-battle-amazon-11649681740) of small-biz merchants use [Etsy’s](https://robinhood.com/stocks/ETSY) ecommerce platform to sell everything from embroidered crewnecks to hand-sculpted vases. Now thousands of those vendors are on strike, closing up their shops for the week. They’re protesting transaction fees that are going from 5% to 6.5%. Just three years ago fees were half that. 

__Blinged-out face masks…__ circa: 2020. Etsy was the [go-to](https://www.wsj.com/articles/etsy-sellers-strike-as-site-ramps-up-to-battle-amazon-11649681740) marketplace in the early days of the pandemic, when mask scarcity at major retailers forced consumers to go the homemade route. As a result Etsy saw record profits and was the S&P’s [second-best-performing](https://snacks.robinhood.com/newsletters/1huKaRyrqLQlWLkXap0P29/) stock in 2020 (after __[Tesla](https://robinhood.com/stocks/TSLA)__). But like other pandemic thrivers, sales are starting to cool as shoppers return to their pre-Covid routines and shopping habits. Now Etsy’s execs want to __[Amazon](https://robinhood.com/stocks/AMZN)__-ify the biz by widening its appeal: 

- __Etsy's CEO said it’s competing__ against some of the biggest retailers and needs to hike fees to reinvest in elements of its core biz, such as speeding up response times to sellers. 
- __Etsy’s sellers have complained__ that the rapid growth has also attracted a flood of wholesale and mass-produced vendors — which is against company policy.

Crafty

__Etsy risks losing what made it special…__ its sellers. Etsy now aspires to be the first place you go to shop online. But those Amazon-esque ambitions conflict with its original mission of providing a platform for artists, arts-and-crafts folks, and their customers. The tension playing out between Etsy and its sellers suggests that as it aims for a bigger piece of the e-commerce pie, the mission may have to change.

Etsy sellers go on strike, protesting the Amazon-ification of the niche marketplace

CNN+ is struggling, raising doubts about demand for streaming news

Interns are much less sold on remote work than seasoned employees, with 70% viewing it negatively

📡 CNN’s streaming struggle

__It’s not easy being cheesy…__ especially when inflation is Flamin’ Hot. Thanks to rising prices, your next bag of Cheetos may be less satisfying: food giants are [shrinking](https://www.businessinsider.com/how-companies-charge-the-same-for-less-stuff-shrinkflation-doritos-2022-3) their snacks to mask price hikes, just one way companies are trying to manage costs that keep going up. Last month, consumer prices [rose](https://www.wsj.com/articles/us-inflation-consumer-price-index-march-2022-11649725215) 8.5% from last year for the biggest spike in four decades. Driving the increase: skyrocketing energy and food prices.

- __You’re not wrong:__ bags of Doritos are coming with five [fewer](https://www.newsweek.com/not-your-imagination-doritos-bag-has-5-fewer-chips-due-shrinkflation-1689450) chips. And __[Pepsi](https://robinhood.com/stocks/PEP)__ [shrank](https://www.cnet.com/personal-finance/gatorade-doritos-wheat-thins-why-are-grocery-products-shrinking/) the packaging of Gatorade and Wheat Thins, giving customers the illusion prices aren’t rising when they really are.

__#Flation takes many forms…__ and some are easier to spot than others. Snack companies can cut costs just by changing packaging: shrinking it, [rebranding](https://www.wsj.com/articles/us-inflation-consumer-price-index-march-2022-11649725215) it as “limited edition,” or both (“Birthday Edition” [Oreos](https://www.oreo.com/oreo-110th-birthday-chocolate-confetti-cake) = smaller *and* pricier). And the “creativity” isn’t confined to the supermarket: 

- __Swap-flation:__ __[GM](https://robinhood.com/stocks/GM)__ is [swapping](https://www.cnbc.com/2022/02/20/the-chip-shortage-is-so-bad-gm-dropped-heated-seats-in-winter.html) out premium features like heated seats for more basic, butt-freezing alternatives.
- __Skimp-flation:__ __[Hilton](https://robinhood.com/stocks/HLT)__ and __[Marriott](https://robinhood.com/stocks/MAR)__ are [ditching](https://www.ft.com/content/042af8db-a201-4d9d-9f61-cc783be0d725) once standard services like room cleaning, making them “opt in” instead; __[Hyatt](https://robinhood.com/stocks/H)__ even nixed its mini shampoo bottles.
- __Robo-flation:__ Banks and airlines are using chatbots instead of employees, and labor-strapped restaurants are [replacing](https://www.nytimes.com/2021/10/10/upshot/shadow-inflation-analysis.html) waitstaff with QR codes.

Navigating shrinkflation in the snack aisle (Mok Jee Chuang/EyeEm/Getty Images)

Flated

__Shrinkflation could outlast inflation…__ Even if fuel costs return to normal this year, you might still be a few Doritos short of a full bag. Inflation’s expected to slow in the coming months as Fed rate hikes kick into gear. But just because prices cool doesn’t mean #flation strategies will disappear: experts say companies are unlikely to bring back larger sizes or free perks and services once they’ve trained consumers to expect something less.

Consumer prices jump the most in 4 decades, unleashing a flurry of creative ’flation

__Bowser goes bowling...__ From the Game Boy to the Wii, __[Nintendo](https://robinhood.com/stocks/NTDOY)__ popularized video games as a family-friendly activity. Now the 133-year-old Japanese gaming icon is bringing together two of its most popular products. This month Nintendo will [release](https://www.theverge.com/2022/4/11/23014891/nintendo-switch-sports-wii-bowling-features-mini-games-price-release-date-hands-on) “Nintendo Switch Sports,” a Switch adaptation of “Wii Sports,” the top-selling Wii game that sold 83M copies.

- __Interactive:__ Joy-Con controllers (which break off from the Switch tablet) let you kick, sprint, and hit virtual balls with your hands. You can even [strap](https://www.youtube.com/watch?v=TZ16-1YIRAc) the Joy-Con to your leg for soccer.
- __Immersive:__ Six mini-games (including bowling, tennis, and sword dueling) play out in vivid graphics on your Switch screen or TV.

__Nostalgia crossing...__ Despite pesky supply shortages, Nintendo [boosted](https://www.shacknews.com/article/128644/nintendo-ntdoy-increases-sales-and-earnings-guidance-for-fy-2022) its sales and profit outlook for the year. Its greatest strength lies in its iconic franchises, from Mario and Pokémon to the Wii series and Switch console — and leveraging them into new but familiar products. “Switch Sports” could gain hit status by merging two best-sellers:

- __Wii winning:__ Released in 2006, the Wii introduced motion-controlled gaming to a wide audience with winners like “Mario Kart” and “Wii Sports” ([shattering](https://www.youtube.com/watch?v=D_uXEWKdsTY) TVs in the process).
- __Switch it up:__ This year, Switch [overtook](https://www.engadget.com/nintendo-switch-sales-have-surpassed-the-wii-090515380.html) Wii to become Nintendo's best-selling home console ever with 100M+ units sold since its 2017 launch. Thanks, “Animal Crossing.”

Wiin

__Nintendo doesn’t need to go meta…__ Its Wii (and now Switch) games are kind of like a mini-metaverse where you interact with friends, minus the heavy and disorienting headsets. That’s why Nintendo says it’s [not interested](https://www.ign.com/articles/nintendo-metaverse) in getting into the metaverse right now. Products with low barriers to entry from consumer faves like Nintendo could be a threat to the more immersive meta vision that __[Meta’s](https://robinhood.com/stocks/META)__ banking on.

Nintendo merges 2 hit franchises in an interactive Switch game, banking on the power of nostalgia

Shrinking snacks and opt-in room service: companies get creative to manage inflation

There are 170K ways to customize a Starbucks drink order

🔎 Beyond shrinkflation

__Bugs Bunny and Guy Fieri just moved in together…__ They’re Warner Brothers now. Yesterday, __WarnerMedia__ and __Discovery__ finally [completed](https://www.nytimes.com/2022/04/10/business/media/warner-bros-discovery.html) their $43B merger, creating a new Hollywood heavyweight for the streaming era. Longtime Discovery CEO David Zaslav — aka Zaz — will run the new biz, __[Warner Bros. Discovery](https://robinhood.com/stocks/WBD)__. 

- __Upside:__ WBD combines classic IP, streaming hits, and cable catnip under one roof (think: “Batman” *and* “Game of Thrones” *and* “Shark Week”). It also has 94M subscribers between HBO Max and Discovery+, putting it closer to __[Disney](https://robinhood.com/stocks/DIS)__ (130M) and __[Netflix](https://robinhood.com/stocks/NFLX)__ (222M).
- __Downside:__ WBD has $55B of debt, which could lead to “synergies” (aka layoffs). Several high-profile execs have already been shown the door. 

__Back to (show) business…__ WBD is going full Hollywood. Zaz has spent months meeting with Tinseltown’s biggest names to talk strategy. The goal: distance WBD from WarnerMedia’s former parent, __[AT&T](https://robinhood.com/stocks/T)__. 

- __Flashback:__ AT&T bought WarnerMedia in 2016 and planned to run it like a tech biz. But development stalled during the 20 months it took for the deal to be approved — and all the while Netflix and __[Amazon](https://robinhood.com/stocks/AMZN)__ poached top talent and churned out content.
- __Odd couples:__ Corporate giants have bought unrelated media businesses before: __[Coke](https://robinhood.com/stocks/KO)__ once owned __Columbia Pictures__ and, more recently, __[GE](https://robinhood.com/stocks/GE)__ owned __NBC__. Both were eventually offloaded.

Welcome to Hollywood, Zaz (Roy Rochlin/Getty Images)

DiscoBros

__The key to streaming may be streamlining…__ WBD is more streamlined than AT&T, which was always a telecom biz at heart. But it’s still clunkier than its streaming-centric rivals because its top content straddles cable TV and streaming services. WBD has enough hot IP to compete with Netflix and Disney in the streaming wars. But added expenses related to cable programming and debt repayment may leave a narrow path to streaming profitability, and a big incentive to streamline even further.

Warner Bros. Discovery is Hollywood’s new heavyweight, but it faces an upstream battle

__*Cruising* past the cops…__ ICYMI: a recent viral [video](https://www.newsweek.com/video-police-driverless-car-gm-cruise-video-viral-1696833) showed one of __[GM’s](https://robinhood.com/stocks/GM)__ Cruise robo-taxis being pulled over by San Francisco police, before it briefly drove off, leaving the officers looking confused. The stop appeared to be for missing headlights. Cruise said the car yielded to police and then drove to the nearest safe location “as intended.” How we got here:

- __In February:__ Cruise [rolled](https://fortune.com/2022/02/01/cruise-robotaxi-self-driving-car-san-francisco/) out its driverless robo-taxi service to the public in San Francisco. Up until then only employees could use it. 
- __Last month:__ __[Google’s](https://robinhood.com/stocks/GOOGL)__ Waymo robo-taxis [joined](https://www.wsj.com/articles/waymo-to-send-driverless-cars-through-san-francisco-11648648800) Cruise in SF and [Phoenix](https://www.azcentral.com/story/money/business/consumers/2022/03/30/waymo-expanding-autonomous-vehicle-service-downtown-phoenix/7209759001/) by offering driverless rides for its employees. 

__The (driverless) future has arrived...__ While you weren’t looking — and after years of hype — fully self-driving cars became a reality in the first US cities. Nearly [30](https://www.ncsl.org/research/transportation/autonomous-vehicles-self-driving-vehicles-enacted-legislation.aspx#:~:text=Twenty%2Dnine%20states%E2%80%94Alabama%2C,%2C%20Virginia%2C%20Vermont%2C%20Washington%20and) US states have now passed legislation on autonomous driving, with California issuing the first commercial-use [permits](https://www.reuters.com/technology/california-issues-permits-cruise-waymo-autonomous-vehicle-service-2022-02-28/) in 2018. Still, the road ahead for mass public acceptance is long. Voters remain skeptical, with nearly half of Americans [saying](https://www.engadget.com/many-americans-distrust-emerging-technology-new-study-finds-170038843.html) they’re uncomfortable sharing the road with self-driving cars, and two-thirds saying they wouldn’t get in one.

Yield

__With great virality comes great responsibility…__ The Cruise traffic stop was a relatively harmless incident: no one was hurt and the car apparently did what it was programmed to do. But like air travel once was, self-driving tech is dependent on the public believing it’s safe. Uber once had high-flying autonomous ambitions that came to a [halt](https://www.theverge.com/2020/12/7/22158745/uber-selling-autonomous-vehicle-business-aurora-innovation) after one of its partially self-driving cars struck and killed a pedestrian (the car’s “safety driver” was [charged](https://www.reuters.com/article/uber-selfdriving/safety-driver-in-fatal-arizona-uber-self-driving-car-crash-charged-with-homicide-idUSKBN26708P) with negligent homicide). Now that fully driverless cars are on the road, videos showing them interacting with the real world could become make or break for companies like Cruise and Waymo as they expand.

GM’s self-driving-car unit gets its first viral moment — a sign of things to come as robo-taxis hit city streets

Hollywood's newest heavyweight, Warner Bros. Discovery, faces an upstream battle

8 of the 10 busiest airports in the world are in the US, with Atlanta’s Hartsfield-Jackson having retaken the top spot

🎥 Hollywood’s new heavyweight

__A new crisis is building...__ From fertilizing [manure](https://www.reuters.com/world/us/us-manure-is-hot-commodity-amid-commercial-fertilizer-shortage-2022-04-06/) to tractor-fueling diesel, the inputs that power the world’s agriculture industry are in short supply. Why it matters: these shortages make it hard for farmers to feed the world and have caused global food prices to surge at their [fastest pace](https://www.bloomberg.com/news/articles/2022-04-08/food-prices-jump-most-on-record-as-war-sparks-supply-chaos?sref=px9VEDa6) *ever*: a record 13% jump last month. The pandemic gave us shortages and sticky inflation. Now Russia’s war on Ukraine — plus Covid lockdowns in China’s farming provinces — are making a bad situation worse. 

- __Pricey breadbasket:__ Wheat and corn prices soared more than [19%](https://www.theguardian.com/global-development/2022/apr/08/global-food-prices-rise-to-highest-ever-levels-after-russian-invasion-ukraine-wheat) last month as war + sanctions crush supply from the key Black Sea “breadbasket” region. 
- __Empty breadbasket:__ Food staples are running low as Russia bombs Ukrainian wheat fields and critical shipping ports remain closed. 
- __FYI:__ Russia is the world’s largest wheat exporter, while Ukraine accounts for a quarter of all grains trade and is the #1 exporter of sunflower oil. 

__Corn Flakes price hikes…__ are just one ripple effect from a major crisis. Americans notice food inflation in the form of pricier __[General Mills](https://robinhood.com/stocks/GIS)__ Cheerios or __[Kellogg’s](https://robinhood.com/stocks/K)__ Pop-Tarts. While US food prices are up [8%](https://www.bls.gov/cpi/) from a year ago, the latest rally is hitting the world’s poor hardest. Countries in the Middle East and North Africa, for example, are feeling the brunt of food shortages because they largely import their staples. Russia’s war could plunge [40M](https://www.cgdev.org/blog/price-spike-caused-ukraine-war-will-push-over-40-million-poverty-how-should-we-respond) more people into extreme poverty if it continues this way.

On the brink of a global food crisis  (Burak Kara/Getty Images)

Bread

__It’s an imperfect storm…__ From the pandemic and war to severe weather and historic droughts, a rare combo of terrible circumstances is putting every aspect of food production under pressure — *all at once*. Global food prices have surged 75% since mid-2020 and are expected to keep climbing. The UN [said](https://www.bloomberg.com/news/articles/2022-03-31/middle-east-at-breaking-point-over-food-prices-un-says) it’s putting some people in poorer countries at a “breaking point.” Food insecurity is known to lead to more civil conflict and unrest — it was bread prices that helped spark the Arab Spring over a decade ago.

Farm-ageddon: The world’s food supply is under threat as a storm of rare conditions brews

__The drones are coming…__ with your allergy meds. Retailers from __[Amazon](https://robinhood.com/stocks/AMZN)__ to __[Walmart](https://robinhood.com/stocks/WMT)__ are finally [starting](https://www.wsj.com/articles/amazon-alphabet-and-others-are-quietly-rolling-out-drone-delivery-across-america-11648872022) to deploy delivery drones after years of hype. Last week, residents of Frisco, Texas, became the [first](https://www.dallasnews.com/business/retail/2022/04/07/see-drones-in-action-in-frisco-that-walgreens-and-wing-hope-to-use-more-broadly-for-deliveries/) to receive robo-packages from __[Walgreens](https://robinhood.com/stocks/WBA)__, via its __[Google](https://robinhood.com/stocks/GOOGL)__-owned drone supplier Wing. Amazon is rolling out commercial drone deliveries this fall, with plans to deliver 500M aerial packages/year. While drone advocates say the delivery tech could reduce emissions (fewer traffic-clogging trucks), regulators have yet to give the green light for nationwide shipments.

__The paradox of recession-omics...__ By most metrics, the US economy is booming: unemployment is back to pre-pandemic levels; salaries are rising at their fastest clip in decades; and consumers are splurging on spring fits and summer vacays. And yet… some economists are bracing for a downturn. Their reasoning: the Fed can’t cool the worst inflation in 40 years without also slamming the brakes on growth. Last week __[Deutsche Bank](https://robinhood.com/stocks/DB)__ was the first on Wall Street to predict a recession, followed by __[Bank of America](https://robinhood.com/stocks/BAC)__ warning of a “recession shock.”

__Fanny packs and flower crowns...__ #FestivalSzn is back. Coachella, Cali’s most Insta-worthy music festival, returns for the first time in two years this weekend — launching what could be a blockbuster summer for live events. When the pandemic hit, the music stopped. Now it’s back with a vengeance, and people are ready to *dance*. Last year, some bookers sold a year's worth of tickets in six months. Concert giant __[Live Nation](https://robinhood.com/stocks/LYV)__, a rival to Chella parent __AEG__, says ticket sales are [up](https://www.bloomberg.com/news/articles/2022-02-24/live-nation-jumps-as-music-promoter-predicts-concert-comeback) 45% from 2019 and predicts its best year ever.

__Opening the vaults...__ Big banks kick off earnings season this week, giving investors the first peek at how an [*eventful*](https://snacks.robinhood.com/newsletters/3lyRcv80sVxPoaiv3W15GL/) first quarter affected corporate profits. Rising interest rates, which let banks charge more for loans, mortgages, and credit cards are expected to [boost](https://www.forbes.com/sites/sergeiklebnikov/2022/01/14/heres-why-big-bank-stocks-like-jpmorgan-are-struggling-despite-solid-earnings/?sh=2a2fb1257d68) profits at __[JPMorgan Chase](https://robinhood.com/stocks/JPM)__, __[Wells Fargo](https://robinhood.com/stocks/WFC)__, and __[Citi](https://robinhood.com/stocks/C)__. On the flip side, Citi and JPM expect big losses related to their holdings in Russia. And a dramatic slowdown in IPO and deal-making activity so far this year probably won’t help either.

- __[Zero](https://snacks.robinhood.com/newsletters/6CvoAkhTzggBHZuGf3azk2/articles/svsEnsjFsXcHb4qgGjdHj/):__ China’s financial capital remains locked down over a spike in Covid cases, with ~26M Shanghai residents forced to stay home — monitored by drones and robo-dogs.
- __[Turbulent](https://snacks.robinhood.com/newsletters/22c5VDDeeLOi4iyaybumsG/articles/6v13W7lFCwtbaBJ73GcFzB/):__ __[JetBlue](https://robinhood.com/stocks/JBLU)__ outbid __[Frontier](https://robinhood.com/stocks/ULCC)__ with a $3.6B offer to buy budget airline __[Spirit](https://robinhood.com/stocks/SAVE)__. Pilot shortages and demand for scarce tarmac gates are forcing smaller airlines to merge to survive.
- __[Muskular](https://snacks.robinhood.com/newsletters/5lepo7UAINWNcn90JfK6HE/articles/68N6hnLpsgBLa7R4OZx8YF/):__ Elon became __[Twitter’s](https://robinhood.com/stocks/TWTR)__ biggest shareholder after nabbing a 9.2% stake — and a board seat. The web’s “town square” could get a makeover: Musk teased upcoming “significant improvements” (edit button?).

Utah is the most financially literate US state — one reason: nearly 85% of its residents spend less than they make

🚜 Farm-ageddon

__Bringing the ’90s back…__ in those high-school low-rises. __[Levi’s](https://robinhood.com/stocks/LEVI)__ scored big last quarter as you splurged on jumpers and jean jackets for IRL date nights. Its CEO said that [despite](https://www.cnbc.com/2022/04/06/levi-strauss-co-levi-reports-q1-2022-earnings-beat.html) hiking prices, customers still shelled out more $$ for their jeans and cotton tees — and expects strong sales to continue. Total sales jumped 22% even after the denim icon took a $60M hit to combat supply snafus. Digi-sales jumped 16%, making up a quarter of Levi’s revenue. Still, Levi’s shares are down 20%+ over the past year. 

__501-fitting appointment…__ Retailers lost [billions](https://www.forrester.com/press-newsroom/forrester-retail-will-see-a-2-1-trillion-loss-globally-in-2020-due-to-coronavirus-pandemic/) during the pandemic as we swapped distressed denim for old college sweats. Since Levi’s couldn’t control its wholesaler’s closures (like: __[Kohl’s](https://robinhood.com/stocks/KSS)__ and __[Nordstrom](https://robinhood.com/stocks/JWN)__), it focused on selling directly through its own channels, both online and in stores. As part of that strategy, Levi’s [built](https://www.levistrauss.com/2020/09/29/levis-nextgen-stores-come-to-north-america/) its first handful of upgraded locations it’s dubbed “NextGen,” and it plans to roll out 30 more this year:

- __Tailor shop:__ Customers [pick](https://www.levi.com/US/en_US/features/tailor-shop) from a brunch-style menu of services like: custom embroidery, alterations, even converting old jeans into Coachella-worthy jorts. 
- __Endless AI-sles:__ Levi’s uses artificial intelligence to predict what style and price will sell best in each location (think: shorts in Silver Lake, trucker jackets in Brooklyn).
- __Payoff:__ Sales at company-operated Levi’s stores jumped 48% last quarter, while D2C sales made up 39% of total sales.

High rise, high price (Ben Gabbe/Getty Images for Nordstrom)

Rivet

__Levi's is in retail’s sweet spot…__ Its customers are paying higher prices *and* buying directly. That sweetens profits, since there’s no one in the middle to take a cut. But to justify higher prices and boost direct sales, retailers need to premium-ify the shopping experience (or at least give it some pizazz). Instead of buying $30 Levi’s from Ross, you might choose the Levi’s store to get a flower patch sewn into your jean jacket.

Levi’s bet on brick-and-mortar and personalized denim is driving a sales boom — putting the brand in retail’s sweet spot

__It’s Day 12…__ and there’s no sign of Shanghai’s lockdown lifting. Almost two weeks ago, China [locked down](https://www.wsj.com/articles/manufacturers-grind-to-a-halt-in-china-as-lockdowns-expand-11649343420?mod=hp_lead_pos4) its largest city and financial capital to contain its biggest Covid outbreak in two years. Since then, China’s zero-Covid policy has brought life to a halt for 26M people, virtually freezing one of the world’s most important manufacturing hubs.

- __Drones and robo-dogs__ are [circulating](https://www.insider.com/shanghai-deploys-drones-robot-dogs-broadcast-covid-19-lockdown-guidelines-2022-4) to remind citizens to obey the rules and curb their “soul’s desire for freedom.” Many residents are running low on [food](https://www.wsj.com/articles/shanghai-in-lockdown-struggles-to-feed-itself-11649353336) because delivery services have been disrupted (and they can’t go to the grocery store). 
- __Office sleepover:__ Some bankers are stuck [sleeping](https://www.wsj.com/articles/shanghai-workers-sleep-at-the-office-as-china-extends-covid-19-lockdown-11649244601) under their desks and brushing teeth with their coworkers.

__Indefinite lockdown, definite damage…__ Shanghai accounts for 4% of China’s GDP and 10% of its exports, so the lockdown threatens to slow the entire country’s economy. But the rest of the world could be affected, too, since Shanghai is an industrial nerve center. 

- __Closed factories:__ __[Tesla](https://robinhood.com/stocks/TSLA)__, __[Volkswagen](https://robinhood.com/stocks/VWAGY)__, and German industrial giant __ThyssenKrupp__ have shut their Shanghai plants for two weeks and counting; production has slowed for 80% of Shanghai-based manufacturers.
- __Empty ports:__ Cargo volume in Shanghai’s port — among the world’s busiest — has [dropped](https://www.ft.com/content/572eae5f-d47b-4e1b-a7c2-be63bd45000a) by a third since mid-March. Shipping giant __[Maersk](https://robinhood.com/stocks/AMKBY)__ says the lockdown will also reduce trucking in and out of the city by 30%.
- __Mounting losses:__ After this clampdown and a similar [quarantine](https://snacks.robinhood.com/newsletters/61f1B3p6bwLVtvt34XMAtW/articles/3RvjyEpf0eI4nWt1Q0lGVg/) in Shenzhen last month, half of US companies in China have reduced their annual sales estimates.

Quar

__Supply struggles could speed the “decoupling”…__ of the West’s business ties with China. If a pandemic and a war didn’t persuade global businesses to strengthen their own supply chains, this Shanghai shutdown might. Chinese citizens have no choice but to obey their government and its robo-dogs. But multinational companies have options — and a growing list of reasons to reduce dependence on China.

The biggest city in China is locked down — and the groaning supply chain is about to feel it

Levi’s bet on direct-to-consumer denim and personalized fit is paying off

Half of US streaming users feel overwhelmed by the deluge of programming on streaming services — but 90% have no plans to cut back

👖 Levi’s pricing power

__Red shirts & green jackets...__ 25 years after his first Masters victory, Tiger Woods is teeing up once again to compete in the Super Bowl of golf tourneys today. The return of the five-time champ made headlines, especially after a serious car accident almost cost him a leg a year ago. But that’s not the only reason: Tiger, who’s famously sponsored by __[Nike](https://robinhood.com/stocks/NKE)__, was spotted [practicing](https://www.axios.com/tiger-woods-shoes-masters-nike-footjoy-211463ac-1852-4eeb-a44f-2ed37e77c1db.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiossports&stream=top) in a pair of rival brand FootJoy shoes this week. Why it matters:

- __In 1996:__ Nike turned heads when it signed the still unknown 20-year-old to a sponsorship deal worth a then eye-popping record $40M (nearly $73M in today’s money).
- __Today:__ Tiger’s made over half a billion dollars rocking Nike polos, hats, and shoes ever since. He’s still a Nike athlete, and [said](https://sports.yahoo.com/tiger-woods-explains-ditching-nike-shoes-for-foot-joy-at-masters-190038857.html) he chose the FootJoys to help with his post-accident mobility. 
- __FYI:__ FootJoy is owned by golf-merch company __[Acushnet](https://robinhood.com/stocks/GOLF)__. The stock popped 3% after Tiger was seen in its kicks.

__Splashy sponsorships…__ Star athletes' astronomical salaries are nothing new, but playing isn’t usually their primary source of income. Endorsement deals [made](https://www.businessinsider.com/athletes-endorsements-nba-golf-tennis-2019-6#tiger-woods-made-97-of-his-earnings-from-endorsements-5) up nearly all of Woods' [$800M](https://www.lifeandstylemag.com/posts/what-is-tiger-woods-net-worth-inside-his-massive-fortune/) net worth in 2019. In return, brands get to borrow celebrity status to build credibility and rack up fans. At the 2019 Masters, Nike got [$22M](https://www.cnn.com/2019/04/15/media/tiger-woods-nike-ad/index.html) worth of exposure just from Tiger’s come-from-behind Sunday win alone.

Tiger just doing it at the ’97 Masters (Stephen Munday/Allsport/Getty Images)

Green

__The post-endorsement era is coming…__ While athlete sponsorships aren’t going away, big-name players don’t necessarily need brands anymore the way brands need them. The kind of Nike mega-deals pioneered by Michael Jordan and Tiger Woods are no longer inevitable for top players. See: fellow GOAT Tom Brady, who’s leveraging his social-media following to [create](https://www.forbes.com/sites/andyfrye/2022/01/12/tom-brady-unveils-his-namesake-apparel-brand/?sh=3e7c71da1105) his own apparel line. Tiger's FootJoy-clad feet could also signal the dwindling power of official sponsors.

Tiger returns to the Masters — but his sponsor Nike may be losing influence in the post-endorsement era

__Flight costs $40…__ carry-on + sandwich costs $400. This week __[JetBlue](https://robinhood.com/stocks/JBLU)__ made a $3.6B [offer](https://www.wsj.com/articles/jetblue-offers-to-buy-spirit-in-all-cash-deal-11649191019?mod=hp_lista_pos4) to buy budget airline __[Spirit](https://robinhood.com/stocks/SAVE)__, topping the $2.9B bid [made](https://snacks.robinhood.com/newsletters/1I3jIJQkqK0ygv51yekmCQ/articles/V8eaYxPExXyVEX2Vdr6Jz/) by rival __[Frontier](https://robinhood.com/stocks/ULCC)__ in February. Awkward, since Spirit and Frontier had [already agreed](https://snacks.robinhood.com/newsletters/1I3jIJQkqK0ygv51yekmCQ/articles/V8eaYxPExXyVEX2Vdr6Jz/) to a merger that would’ve created a budget behemoth. Spirit said its board would discuss the offer before accepting either bid. 

- __JetBlue says__ its offer is best for investors, at a 37% premium over Frontier’s. JB wants to spruce up Spirit planes and add ’em to its fleet, not run a separate carrier.
- __Frontier says__ a JB merger would boost flight prices and reduce options for fliers, since the airlines have similar routes. 
- __Odd couple:__ Analysts [called](https://www.cnbc.com/2022/04/06/why-jetblue-is-willing-to-shell-out-3point6-billion-for-discount-airline-spirit.html) the bid a “headscratcher” because JetBlue is known for perks like free Terra chips while Spirit is known for free nothing. JB also offers a business-class tier, while Spirit… doesn’t.

__Spirit in the sky…__ needs a companion. Four carriers dominate the US airline industry: __[American](https://robinhood.com/stocks/AAL)__, __[Delta](https://robinhood.com/stocks/DAL)__, __[Southwest](https://robinhood.com/stocks/LUV)__, and __[United](https://robinhood.com/stocks/UAL)__ control 80% of domestic flights. But headwinds are now forcing smaller airlines to merge to survive: 

- __Not enough pilots:__ A [shortage](https://airlineweekly.com/2022/03/the-u-s-pilot-shortage-may-not-peak-until-2023/) has caused costs to [soar](https://thepointsguy.com/news/pilot-shortage-pay-raise-avelo/) for smaller airlines and resulted in hundreds of canceled flights.
- __Not enough gates:__ Gates at major hubs like ATL are often reserved for the Big Four, which makes it hard for smaller airlines to add new routes.
- __FYI:__ President Biden’s antitrust [crackdown](https://www.whitehouse.gov/briefing-room/presidential-actions/2021/07/09/executive-order-on-promoting-competition-in-the-american-economy/) is targeting airlines, and that could ground *either* merger.

Tarmac

__In sight, in mind…__ Presence is key for airlines and reminds consumers that they exist. You can’t book your LA weekend with an airline that doesn’t have gates at LAX. JetBlue and Frontier need access to more gates to expand into new markets. But they can’t buy gates — at least not directly. That’s why they’re willing to pay a premium for Spirit: it’s an *indirect* way to buy gates at major airports, a scarce resource they both need.

JetBlue outbids Frontier with a $3.6B offer for Spirit, because both airlines need gates to grow

Tiger Woods returns to the Masters — and his sponsor Nike may be losing influence

Roblox is offering this year’s highest-paid internships, with interns raking in nearly $10K/month

⛳ The Tiger Effect

__Got my (electric) driver's license last week...__ but these two won't be driving alone past your street. __[Honda](https://robinhood.com/stocks/HMC)__ and __[GM](https://robinhood.com/stocks/GM)__ are [teaming up](https://www.cnbc.com/2022/04/05/gm-and-honda-to-partner-on-affordable-electric-vehicles.html) to develop EVs for under $30K — even cheaper than GM's upcoming $30K electric Chevy. EVs at those prices are virtually unheard of, but GM and Honda want to start cranking out millions by 2027.

- __Plugged in:__ The compact SUVs will use GM’s next-gen Ultium battery tech that’s the base for its electric Hummer. GM [says](https://snacks.robinhood.com/newsletters/3W8LX1jIAswA4HFNTbvVHO/articles/vdFCNmlM6aWPfSxbASbFe/) Ultium can get up to 450 miles/charge at 40% less cost than its current batteries.
- __Partnered up:__ The collab will yield new EVs for both GM and Honda, expanding on their existing electric partnership (GM already made two EVs for Honda).

__Chev-EV...__ As policymakers and consumers lean into green tech, GM, __[VW](https://robinhood.com/stocks/VWAGY)__, and other gassy OGs are investing billions in an electric future. Even Honda, which has focused more on hybrids, is pivoting to all-electric. Two ways to gain an edge over industry leader __[Tesla](https://robinhood.com/stocks/TSLA)__: de-luxify EVs and boost battery range.

- __Price anxiety:__ EVs are still much pricier than their gas cousins. A new electric model costs $60K, on average — $15K more than new cars generally.
- __Range anxiety:__ Road trips can be sweat-inducing when you’re far from a charging station, while gas pumps populate every exit.

The EV 1% (VCG/Getty Images)

De-luxe

__Priced out = iced out…__ EV makers are still iced out by consumers, because they’ve *priced out* consumers. Despite increasing adoption, fewer than [1%](https://graphics.reuters.com/AUTOS-ELECTRIC/USA/mopanyqxwva/) of the 250M cars on US roads are electric. Most Americans aren’t ready to buy an EV yet, [citing](https://www.greencarreports.com/news/1134702_americans-dont-want-ev-yet-half-wont-pay-extra-for-electrified) price as a main concern. A recent Axios [poll](https://www.axios.com/axios-momentive-poll-young-people-are-the-biggest-techno-optimists-90b7aaca-1aac-406e-8f37-3aa48142d620.html) found that 7 in 10 young adults would buy an EV if they could afford one. By developing lower-priced EVs at scale, GM and Honda could tap into an iced-out market. 

GM and Honda partner on sub-$30K electric cars in a push to bring EVs mainstream

__Shoot for the moon…__ Even if you miss, you’ll land among the __SpaceX__ satellites. Yesterday __[Amazon](https://robinhood.com/stocks/AMZN)__ [announced](https://www.wsj.com/articles/amazon-to-spend-billions-on-space-launches-as-spacex-ramps-up-satellite-internet-service-11649156400?mod=business_lead_pos1) the biggest rocket deal in commercial space history. The goal: bring on partners to help launch thousands of satellites that beam WiFi across the globe. 

- __The mission:__ Amazon’s Project Kuiper plans to send thousands of internet satellites into orbit in 83 rocket launches over the next five years (and will spend billions to do it).
- __The crew:__ The Zon’s tapped three rocket-makers: United Launch Alliance (run by __[Boeing](https://robinhood.com/stocks/BA)__ and defense giant __[Lockheed Martin](https://robinhood.com/stocks/LMT)__), French biz __Arianespace__, and of course Jeff Bezos’ __Blue Origin__. 
- __The countdown:__ Amazon got Uncle Sam’s permission in 2020 to launch 3K+ satellites. But there’s a catch: if half of those aren’t live by 2026, it [loses](https://www.theverge.com/2020/7/30/21348768/fcc-amazon-kuiper-satellite-constellation-approval) its license.

__There’s a new space race…__ and it’s centered on earthly WiFi, not Martian colonies. A third of the world’s population still [doesn’t](https://www.washingtonpost.com/world/2021/12/01/global-internet-usage/) have internet access. One solution: small, low-orbiting satellites that send broadband to remote locations, and do it without the latency issues that satellite internet is known for.

- __Head start:__ SpaceX-owned Starlink has already [launched](https://www.space.com/spacex-starlink-satellites.html) 2K satellites that serve 250K customers, and has approval for 10K more.
- __Crowded skies:__ But competitors like __Astra__, __OneWeb__, __Intelsat__, and Amazon have [submitted](https://www.cnbc.com/2021/11/05/space-companies-ask-fcc-to-approve-38000-broadband-satellites.html) plans to launch 38K of their own.

Hotspot

__Amazon already had the rocket fuel…__ Now it’s got the rockets. This won’t be the Zon’s first time blasting off into a new industry: the corporate behemoth has already successfully leveraged its size and scale to enter grocery, cloud computing, streaming, and healthcare. It may not have a head start with satellites, but its cash, customers, and infrastructure give it an edge in any space.

Amazon signs a huge rocket deal to bring satellite internet worldwide, sending the space race into a new orbit

There are 329 fewer billionaires than there were last year, as sanctions hit Russian oligarchs — it’s the biggest billionaire drop since ’09