__Not your average extension cord…__ The world’s longest undersea electricity cable [started](https://www.cnbc.com/2021/10/04/worlds-longest-under-sea-electricity-cable-begins-operations.html) sending electricity between the UK and Norway earlier this week. Shares of __[National Grid](https://robinhood.com/stocks/NGG)__, the UK energy giant behind the 450-mile cable, which trades on the NYSE, rose nearly 2% yesterday. NG has big plans for its network:

- __Wind, water, wire:__ The new $1.9B North Sea Link cable will send British wind power to Norway and Norwegian hydropower back to the UK.
- __Underwater energy superhighway:__ NG already built “interconnectors” in the Netherlands, France, and Belgium — and it has plans to connect even more countries. 
- __Low carbon:__ NG aims for 90% of its imported electricity to come from zero-carbon sources by 2030.

__Energy sharing = energy caring…__ One issue with renewables is intermittency, which happens when solar panels stop generating electricity on cloudy days and wind turbines slow down in less gusty weather. But power grids need to keep the lights on in *all* kinds of weather. One solution: electricity sharing. National Grid’s new cable enables both the UK and Norway to borrow spare juice from each other when their own wind and water systems slow down.

With great cables come great responsibility [Westend61 via Getty Images]

Plug

__Better grids are key to a renewable future…__ Shared energy grids are crucial now that 160+ countries have adopted renewable-energy targets and need backup when their sources wane. Businesses and orgs like the Renewable Energy Institute are working to connect cables across borders to make “supergrids.” Others, such as battery giants __LG__ and __[Panasonic](https://robinhood.com/stocks/PCRFY)__, are building mega-batteries that can store renewable energy, while carmakers __[Tesla](https://robinhood.com/stocks/TSLA)__, __[VW](https://robinhood.com/stocks/VWAGY)__, and __[Nissan](https://robinhood.com/stocks/NSANY)__ are working to transform their EVs into mini power plants. But countries still have a ways to go to reach targets: The US needs to triple its renewable investments by 2030 to hit its global climate goals.

The UK just plugged in the world’s longest undersea cable — but the transformation of the power grid is just beginning

__"Hunger Games" meets "Black Mirror"…__ __[Netflix’s](https://robinhood.com/stocks/NFLX)__ new South Korean fictional thriller “Squid Game” debuted 10 days ago and is already on track to becoming its [biggest](https://www.nbcnews.com/pop-culture/pop-culture-news/netflix-s-squid-game-sensation-here-s-why-it-s-n1280646) show ever (sorry, “[Bridgerton](https://www.businessinsider.com/bridgerton-compared-to-other-netflix-top-original-shows-viewership-2021-1)”). The drama follows hundreds of cash-strapped contestants competing in children’s games for a big $$ prize (think red light, green light), but losing could mean death. The results are viral:

- __From the couch to the monitor:__ Fans are using apps like __TikTok__ to recreate the series’ tasks (see the Dalogna candy [challenge](https://www.techtimes.com/articles/266041/20210930/netflix-squid-game-dalgona-candy-recipe-revealed-tiktok-viral.htm)). Game makers on Roblox are also creating playable spinoffs. 
- __82M million subscribers__ are [expected](https://fortune.com/2021/10/02/squid-game-series-netflix-everything-to-know/) to tune in by the end of the month. It’s now the top show in [90](https://www.forbes.com/sites/paultassi/2021/10/03/squid-game-is-now-the-1-show-in-90-different-countries/) countries.

__Netflix’s streaming passport…__ is full of stamps. Since its international debut in Canada a decade ago, ’Flix has added 180+ countries to its roster. America still accounts for about a quarter of Netflix’s 209M global paying memberships, but US growth is tapping out. To unlock new audiences, Netflix is looking overseas:  

- __International reels:__ This year, Netflix plans to spend half its $17B original content spend on [productions](https://www.wsj.com/articles/netflix-disney-and-amazons-streaming-wars-heat-up-overseas-11619083801) outside the US. 
- __Hits:__ Popular shows like Germany’s “Barbarians,” the French series “Lupin,” and South Korea’s “Sweet Home” have boosted Netflix’s international subscribers 18%+ since [2018](https://www.comparitech.com/tv-streaming/netflix-subscribers/). 


Squid

__Going global means it might be time to “copy and paste”…__  Netflix’s US subscriber base is no longer growing — it actually dropped by 400K people this year — which means the streaming giant has two options to grow: Raise prices or win new customers somewhere else. With hits like “Squid Game,” Netflix is doubling down on high-quality international content to win over new subscribers overseas. The push seems to be working, but it does bring some new costs: Think pricey licensing fees and conflicts with broadband providers facing traffic spikes.

Netflix’s K-thriller ‘Squid Game’ series goes viral, underscoring Netflix’s big opportunity overseas

Dow Jones

S&P 500

Nasdaq

Bitcoin

🔌 Clean cable energy 

__Same name as the Jetsons’ dog...__ Except it has a tablet for a head. __[Amazon](https://robinhood.com/stocks/AMZN)__ [rolled out](https://www.wsj.com/articles/amazon-event-today-expect-echo-updates-and-a-little-weirdness-11632837993?mod=business_lead_pos4) new home gadgets at its hardware event last week, including a smart thermostat and a wall-mounted echo. The most interesting drop: a $1K Alexa-powered robot named Astro. Picture a 10-inch tablet on wheels. Control it like a metal dog, with voice commands or through an app.

- __Multitask queen:__ Astro follows you around while you video-chat on its tablet, and plays music and shows as you do laundry.
- __Host with the most:__ Astro transports stuff around the house in its storage compartment. Just don't ask it to take the La Croix upstairs (it can't climb).
- __Better than a bulldog:__ Astro patrols your home while you're on vacay, and can scope out areas where movement is detected.

__Connection, still loading...__ Amazon will offer a limited number of Astros starting later this year. So far the reviews have been underwhelming: Amazon developers [reportedly](https://www.theverge.com/2021/9/28/22699284/amazon-astro-real-world-stairs-fragile-developer-claims-documents-tracking) claim it's "terrible" and will "throw itself down" stairs. Still, Amazon has been building its suite of connected-home products, from Echo speakers and tablets to Amazon-branded TVs, and now robots. The goal: plant its flag in the connected home.

- __Today__ we have smart speakers like Amazon's Alexa and Google's Home Mini, along with thermostats, security cameras, and light dimmers. And let's not forget __[iRobot's](https://robinhood.com/stocks/IRBT)__ Roomba.
- __Tomorrow__ we could have [showers](https://time.com/5634791/smart-homes-future/) that turn on at your preferred temp when your alarm rings, health sensors that order Advil when they detect a fever, and AI bots that whip up spaghetti while you drive home.
- The smart-home market is projected to [grow](https://www.marketsandmarkets.com/Market-Reports/smart-homes-and-assisted-living-advanced-technologie-and-global-market-121.html?gclid=CjwKCAjw49qKBhAoEiwAHQVTowIwoFavyZ4cb5paTresHBzClz8-1Ux70sN090Cu1ATN606ers2f1BoCJIEQAvD_BwE) from $84.5B this year to $139B by 2026. And [63M](https://time.com/5634791/smart-homes-future/) American homes will qualify as smart by 2022.

2040: Your avo toast is ready [onurdongel/E+ via GettyImages]

__The smart future could unlock smart profits…__ The smarter homes become, the more connected hardware they’ll need to power them. That’s an opportunity for companies like Amazon to not only sell new hardware like Astro but also boost subscriptions and e-comm sales. Think: A smart fridge that automatically restocks groceries via Prime. But IoT is still early. Plus, all that connectedness requires tons of data on your home life. That could turn off some consumers.

Smart Home: Amazon unveils a home robot in a bid for the connected future

__Shots fired...__ __[United Airlines](https://robinhood.com/stocks/UAL)__ [said](https://www.nbcnews.com/news/us-news/nearly-600-united-airlines-employees-face-termination-defying-vaccine-mandate-n1280304) it would fire nearly 600 US-based employees who failed to comply with its vaccine mandate. Meanwhile, chicken giant __[Tyson](https://robinhood.com/stocks/TSN)__ is requiring all 120K of its US workers to be [vaxxed](https://www.nytimes.com/2021/09/30/business/tyson-foods-vaccination-mandate-rate.html) by November 1. It offered a $200 vax bonus and says 91% of its workforce has already gotten the shot. Last month, President Biden signed an exec order requiring companies with 100+ workers to ensure  employees are vaxxed or submit them to weekly Covid tests. Expect corporate pressure to keep intensifying.

__Flated shopping spree...__ Consumer spending, aka the biggest driver of US economic growth, [jumped](https://www.wsj.com/articles/consumer-spending-personal-income-inflation-august-2021-11633027180) 0.8% in August after falling in July. Personal incomes ticked up thanks to wage gains and $300/month child tax credits. Splurging suggests economic recovery is ramping up heading into the holidays. Also ramping up: inflation. Prices popped 3.6% in August from last year, eating into households' buying power. Adjusting for inflation, August spending rose only 0.4%.

Zoom Out

Stories we’re watching…

__Kim Crawford wine, chilled...__ Booze giant __[Constellation Brands](https://robinhood.com/stocks/STZ)__ owns grocery go-tos like Robert Mondavi wine, Svedka vodka, and Corona Hard Seltzer. Constellation benefited during the pandemic, when bar and restaurant closures had us couch-sipping hard seltzers and quarantinis. From March to December 2020, US liquor store sales hit $42B — up 20% from the same period in 2019. But sales have slowed this year as home-sipping declines. We’ll see if that has continued when Constellation reports earnings Wednesday.

__The blowout is back…__ __[Helen of Troy](https://robinhood.com/stocks/HELE)__, whose brand portfolio includes Hydro Flask, Vick’s, and Dry Bar hair products, reports earnings Thursday. Helen owns or licenses trademarks for a variety of household, beauty, and health products. Sales jumped 29% last quarter, driven by growth in beauty as salons reopened and “going out” life picked up. But Helen still has regulatory issues to iron out, and it lowered its sales forecast for the rest of the year. 

Events

Coming up this week...

- __[Roof](https://snacks.robinhood.com/newsletters/6agvqKBLkHAmQdjfWIviz8/articles/dDAJRs3v8aC0I1za037Xz/):__ The debt ceiling, explained: Why Congress’ fight over borrowing could tank the US economy — and its reputation. 
- __[Ad-icted](https://snacks.robinhood.com/newsletters/33JsqHWKUqNBFoxkqiZToY/articles/psOEOADIm8V369AIxofkr/):__ __TikTok__ became one of few social networks to hit 1B+ users. It may have been cloned by Insta, __Snap__, and YouTube — but it’s not owned.  
- __[Vision](https://snacks.robinhood.com/newsletters/6agvqKBLkHAmQdjfWIviz8/articles/3cXEqrGe81eKKG3rIA2kCP/):__ Direct-to-consumer glasses pioneer __[Warby Parker](https://robinhood.com/stocks/WRBY)__ is worth $5B after directly listing its shares on the market. But customer love doesn’t always mean profit.

ICYMI

Last week's highlights...

🤖 Amazon’s home robot

__Three Dollar Store…__ just doesn’t have the same ring to it. Discount legend __[Dollar Tree](https://robinhood.com/stocks/DLTR)__ announced [plans](https://www.wsj.com/articles/dollar-tree-to-sell-more-items-above-1-as-costs-rise-11632918816?mod=hp_lead_pos4) to start selling more items for $1.25, and even $3.50 (gasp). Driving the price jumps: a triple whammy of inflation, a global supply crunch, and the ongoing labor shortage. Despite the sudden shift from its signature price point, Dollar Tree shares jumped 16% yesterday after its announcement. 

__The namesake barrier...__ has been broken before. Since 2019, Dollar Tree has experimented with $3 and even $5 items in a section labeled “Dollar Tree Plus” (not a streaming service). Last year rival __[Dollar General](https://robinhood.com/stocks/DG)__ launched Popshelf, a store aimed at higher-end shoppers like [suburban moms](https://snacks.robinhood.com/newsletters/6CYbtZgaeQFf8W6pRxaYg0/articles/5NXP9uxfxP7R39K7MFPpnG/) who still love a good deal (prices up to $5). For Dollar Tree, price bumps have been hugely successful so far. And investors smell profit...

- __Profits are 6% higher__ at “premium” Dollar Tree Plus stores than at regular Dollar Trees. DT expects to have 500 Plus stores by fiscal year’s end — and 5K by 2024.
- __$5 products__ such as “Grandma’s Heirloom Pillow” and “decorative topiary” appeal to higher-income customers, who are more willing to splurge. 
- __Ditching the dollar standard__ allows Dollar Tree to expand into pricier — and potentially more profitable — new categories. Think frozen meats and seasonal decorative goods (#HallowLantern).


Washington

__The price is right — if the *time* is right…__ Some companies can justify price hikes thanks to coveted brands or cutting-edge tech. Since DT doesn’t have either of those, timing is key. Right now, consumers appear to be less sensitive to price hikes: Consumer prices jumped 5.3% year over year in August and have risen at record rates for five straight months. And despite a 5X increase in freight costs, Dollar Tree’s profits have grown since 2019. Once costs and inflation levels stabilize, Dollar Tree may be in a position to get even more bang for its buck.

Dollar Tree ditches the dollar standard — and paves the way for higher profits

__The Tourist Strikes Back…__ So does Mickey. After a desolate pandemic stretch, __[Disney](https://robinhood.com/stocks/DIS)__ is [opening](https://www.cnbc.com/2021/09/30/disneys-galactic-starcruiser-launches-march-2022-bookings-start-this-october.html) an immersive “Star Wars”-themed hotel to win back customers’ hearts. It'll open in March at the Disney World Resort in Orlando. Fans of the intergalactic franchise can opt into a two-night choose-your-own-adventure stay aboard the Halcyon Starcruiser (featuring lightsaber training and model ship building). The package includes tickets to the Hollywood Studios park and three meals a day (#lightsavor). 

__Experiences are back-ish...__ Disney’s  "Parks, Experiences, and Products" division, which includes resorts and cruises, lost a record $2B during the pandemic. Meanwhile, Disney+ saw impressive growth. Last quarter, Disney’s Experiences biz turned a profit for the first time in over a year. But not all experiences are created equal...

- __Sad carnival:__ Disney’s cruise fleet has been stalled as Covid resurges, and __[Carnival's](https://robinhood.com/stocks/CCL)__ Princess Cruise line canceled a number of its voyages. The cruise industry is now worth just $24B, down from $154B prepandemic.
- __Parks intensify:__ Disney’s park-pass reservation system has allowed it to maximize attendance under Covid restrictions. Last quarter, Disney's Parks and Experiences division pulled in $4.3B in sales, up 4X from the previous quarter.


_Room service has arrived [EyeEm via GettyImages]_

Yoda

__Safe thrills > cheap thrills…__ To attract customers after the height of the pandemic, companies need to offer supercharged experiences — with safety precautions. __[Airbnb](https://robinhood.com/stocks/ABNB)__ has expanded to unique stays like yurts, houseboats, and caves to lure adventure-hungry remote workers. Disney’s new Wish cruise line will feature Broadway-style musicals and an infinity pool, and __Celebrity Cruises__ debuted a 3D laser show for dinner guests. But all have implemented Covid safety measures, like contactless check-in, proof of vaccination, or facial-recognition tech to make their thrills safe.

Disney is opening a ‘Star Wars’ hotel as IRL experiences make a profit comeback

⚔️ Disney’s Star Wars

__Percey or Watts frame?__ __[Warby Parker](https://robinhood.com/stocks/WRBY)__ shares jumped 35% yesterday after [directly listing](https://www.wsj.com/articles/warby-parker-to-start-trading-on-nyse-11632913202) on public markets, giving the direct-to-consumer glasses giant a $6B valuation. Warby’s direct listing means it didn’t pay i-banks’ big fees to IPO, but released existing shares straight to investors. Last year, Warby’s sales grew faster than Ray Ban maker __Luxottica’s__, but the 11-year-old biz still isn’t profitable. It saw $394M in sales last year, but lost $56M.

__Shifting focus…__ Warby started out 100% online, cutting out price-inflating middlemen to lower the combined cost of frames and prescription lenses to just $95. In 2013, Warby expanded into physical retail with stylish stores for a hybrid D2C experience with soul:

1. __At-home perks:__ Warby offers free home try-on of five pairs, virtual AR try-ons, 30-day returns, and online visits with specialists to extend prescriptions.
2. __Experiential retail:__ Warby’s 145 stores feature friendly barista-like employees, dedicated optometrists, and the aesthetic of a Wes Anderson movie.  
3. __Values-based branding:__ Warby lasered in on social responsibility through its “Buy A Pair, Give a Pair” glasses-donation effort. 

Percey looks great on you [Maskot via Getty Images]

20/20

__Customer love doesn’t always = profit…__ But it’s the first step. Warby pioneered a D2C growth formula built around online sales, engaging stores, and brand values — and other companies quickly copied it. D2C dynamos like __Allbirds__, __[Casper](https://robinhood.com/stocks/CSPR)__, __[Blue Apron](https://robinhood.com/stocks/APRN)__, and __[Honest Company](https://robinhood.com/stocks/HNST)__ all followed Warby’s formula to hit unicorn valuations. But like Warby, they’re also still unprofitable. And investors don’t seem convinced: Casper’s stock is down 60% since its IPO, Honest’s is down 45%, and Blue Apron’s is down 95%.

D2C glasses pioneer Warby Parker just went public — but it’s struggling to turn a profit

__The roof is on fire...__ Or is it the ceiling? There’s a battle between congressional Democrats and Republicans over raising the US Treasury's debt ceiling. A refresher: The Treasury is like Uncle Sam's money manager. It's responsible for handling all federal finances, including managing bills, borrowing, and taxes.

- __The US gov't spends more than it collects__ in taxes, so it needs to constantly borrow to meet its financial obligations. Enter Treasury bonds.
- __The Treasury borrows by issuing bonds__ and bills. Many countries, institutions, and individuals invest in these government IOUs.
- __The debt ceiling is the max amount__ of $$$ that the Treasury can borrow. The US gov't has always paid back its debt to bondholders.
- __The Treasury uses money raised from bonds__ to cover financial obligations. Think Social Security, Medicare, tax refunds, and military salaries.
- __The US needs a higher ceiling__ to cover those expenses, plus trillions worth of Covid spending. The ceiling has been raised or suspended 78 times, but Congress can’t agree to move it.

__The stakes...__ Dems want to suspend or raise the debt limit through legislation. Republicans say Democrats should raise the ceiling without GOP support, in a separate package. While lifting the ceiling doesn't authorize fresh spending, the GOP doesn't want to facilitate the Dems' $3.5T spending plan. 

- __If Congress doesn't act__ by October 18 the Treasury could run out of cash, the US could default on its debts, and operations that rely on gov't funding could slow or stop. 
- __Treasury Sec. Janet Yellen__ believes the issue will be addressed, but said failing to would result in “a historic financial crisis” and "millions of jobs lost.” 

Roof

__“Full faith and credit” has a rep to protect...__ T-bonds are backed by the “full faith and credit” of the US gov't. If the Treasury can’t repay bondholders, investors might lose faith. The US can borrow trillions at very low interest rates, since T-bonds are seen as low-risk. If the US defaults for the first time, investors could become skeptical about lending it money. Higher risk would drive up interest rates on the debt. Higher interest = less money to spend on social programs or higher taxes, which could slow economic growth and increase the $29T national debt.

The fight over the debt ceiling could tank the US economy — and its reputation

👓 Warby's direct-to-consumer IPO

__Say "seamless" again....__ Yesterday, __TikTok__ [hosted](https://www.nytimes.com/2021/09/28/business/media/tiktok-advertising.html) its first-ever "TikTok World" event to inspire brands and "TikTok For Business" clients to spend more ad bucks. TikTok is still the least trusted major social platform, and draws less than $1.3B in estimated annual US ad sales, versus $48B for __[Facebook](https://robinhood.com/stocks/FB)__ and Insta. That’s why it introduced [#seamless](https://www.google.com/url?q=https://newsroom.tiktok.com/en-us/you-are-invited-to-tiktok-world&sa=D&source=editors&ust=1632880275174000&usg=AOvVaw0vKNAZNEVbs_eE_xzs2rEX) new marketing tools, including an automated system that matches advertisers with creators, better ad-targeting tools, and deeper insights on content reach. The Tok also intro'd new shopping features with partners like __[Shopify](https://robinhood.com/stocks/SHOP)__ and __[Square](https://robinhood.com/stocks/SQ)__.

- __TikTok is becoming increasingly important to marketers.__ [71%](https://newsroom.tiktok.com/en-us/new-studies-quantify-tiktoks-growing-impact-on-culture-and-music) of users believe the biggest trends start on TikTok. Think Aerie's viral [leggings](https://www.vogue.com/article/tiktok-made-me-buy-it-aerie-leggings) and KFC's [Hot Chicken](https://www.businessinsider.com/kfc-nashville-hot-chicken-sudden-tiktok-popularity-leads-to-shortages-2021-5).
- __It has hundreds of thousands of advertisers,__ up from just dozens in 2019. This year the share of users who saw ads on TikTok nearly doubled from last year, to 37%. Last year Chinese parent __ByteDance__ saw its sales more than double from 2019.

__Music with a great (algo)rhythm...__ TikTok had 55M users in January 2018. By December 2018, it had 270M+ users post-Musical.ly merger; a year later, it had 500M. This week TikTok [announced](https://www.reuters.com/technology/tiktok-hits-1-billion-monthly-active-users-globally-company-2021-09-27/) it hit 1B+ monthly users, joining FB, Instagram, and YouTube in the elite Billion Social Club. Insta reached the 1B mark in 2018, eight years after launching; it took TikTok less than three. Meanwhile, __[Twitter](https://robinhood.com/stocks/TWTR)__ and __[Snap](https://robinhood.com/stocks/SNAP)__ still have fewer than 300M.


_Ordering 246th pair of viral TikTok leggings [Kelvin Murray/Stone via Getty Images]_

Ad-icted

__Cloned, *but not owned*....__ Social giants are trying to replicate TikTok's success with copycats, from Instagram “Reels” to Snap “Spotlight” and YouTube “Shorts.” Despite that, TikTok has continued strong growth and engagement. US users spend 24.5 hours on TikTok each month, and TikTok overtook YouTube this month for average watch time in the US and UK. But it's not all smooth-Toking: US regulatory scrutiny continues, and ByteDance reportedly postponed its IPO plans indefinitely amid China's tech crackdown.

Cloned, not owned: TikTok hosts its first big ad event and hits 1B users

__When all the pieces fit...__ __Lego__, the world’s largest toy biz by revenue, [revealed](https://www.ft.com/content/d2e845f1-1484-4745-8e3e-4995ee85f772) it hit record sales and profits in the first half of this year. The family-owned Danish toy giant nearly went bankrupt in 2003 after lots of kids abandoned IRL toys for video games. But the pandemic boosted sales across the toy biz.

- __Lego raked in a whopping $990M profit__ for the first half of 2021 — 1,000% more than __[Hasbro](https://robinhood.com/stocks/HAS)__, the world’s No. 2 toymaker. Part of the reason:
- __While Hasbro hiked prices__ because of the global supply crunch, Lego avoided Brickflation by building factories (#RealBricks) in its biggest markets. 

__Build a brick…__ Unlike Hasbro and __[Mattel](https://robinhood.com/stocks/MAT)__, which sell huge catalogs of toys ranging from Nerf Guns and Play-Doh to Barbie and Hot Wheels, Lego built its entire business around humble plastic bricks. And recently it’s found new ways to expand the Lego life:

- __Bricks for all:__ Lego adapted its bricks to audiences with nearly every interest imaginable, from Roman history to video games. It partnered with cultural giants like Marvel to boost popular appeal. Think Minecraft, Harry Potter, and Frozen Lego sets. 
- __The Lego-verse:__ By keeping its core brand simple, Lego laid the foundation for IRL extensions like Legoland theme park and Lego Stores staffed by “Brick Specialists.” It expects to open 174 new stores this year.


Play

__The fun is in the franchise…__ So is the money. Following in __[Disney](https://robinhood.com/stocks/DIS)__'s footsteps, Lego and other toy giants are focused on expanding toy lines into movies: Lego has released several successful Lego flicks, Mattel is developing 13 live-action movies based on popular toy brands like Barbie and Polly Pocket, and Hasbro has already built Transformers into a $5B movie mega-franchise.


Lego’s profits are built on top of its bricks — by making something for everyone

🕺  TikTok’s wild ad-venture 

__Almost autonomous…__ But already famous. __[Tesla](https://robinhood.com/stocks/TSLA)__ finally launched its “full self-driving” (FSD) update, allowing some owners to activate a beta version of its controversial autonomous tech. Tesla fans applauded the unfinished feature, and shares of the EV icon jumped nearly 3% yesterday. The deets:

- __Not-quite-self-driving:__ The update enables “autosteering” around urban obstacles like bikers or pedestrians. Teslas are “Level 2 autonomous,” like models from GM, Volvo, and Toyota, which means drivers must still constantly supervise. Honda sells the most autonomous car yet, a Level 3 that asks drivers to engage only if something goes wrong.
- __No hard braking:__ FSD Beta will be available to Tesla owners who request access and earn high “safety scores” after a week of car-veillance, which measures factors such as aggressive turning.
- __Partial functionality, full price tag:__ FSD costs $10K up front, or $199/month — and an estimated 360K people have already bought it.

__Pump the brakes…__ Yesterday, the head of the National Transportation Safety Board slammed the update, saying Tesla shouldn’t roll out features without addressing existing safety issues. Last month, regulators launched an investigation into Tesla’s self-driving tech, considering 11 separate accidents and one fatality. Tesla’s getting heat over accusations it’s misleading buyers about its self-driving abilities. 


__Tesla is used to moving fast...__ As an EV pioneer, Tesla has often built technology before regulators can even regulate it — think EV charging networks. Tesla claims to make the  “safest cars in the world,” and all its models have received perfect crash-test ratings. CEO Elon Musk has acknowledged that FSD is still dangerously far from full autonomy, but he seems to have no plans to slow the release to wait for regulators. 

As Tesla puts its self-driving tech in the fast lane, regulators push back on safety 

__Broke the #ForYouPage…__ Earlier this month, a real-estate agent [posted](https://www.bloomberg.com/news/articles/2021-09-24/why-is-zillow-buying-up-houses-viral-tiktok-criticizes-firm-for-price-jump?sref=q3KSFp38) a TikTok accusing an unnamed company of manipulating housing prices. Tokers thought he was shading __[Zillow](https://robinhood.com/stocks/Z)__, and the video went viral — nearly 3M views and 450K likes. His allegation: The company uses users’ search data to mass-buy 30 homes at one price, then purchases a 31st home at a higher price to drive up the value of the others.

- __Real estate experts say the Tok claims are unlikely,__ and Zillow denied them. A more probable explanation: Zillow sometimes overpays for homes in the hot market. 
- __Home prices are soaring__, while supply is extra-thin. It's getting harder for regular Americans to buy or rent, so the idea of being intentionally priced-out hit a viral nerve. 

__Late night Zillow scroll…__ A pandemic pastime. Like competitors __Redfin__ and __Opendoor__, Zillow isn't just a listing site  à la Airbnb: it's also a buyer — an *iBuyer*. While advertising *others'* listings is Zillow's main moneymaker, its iBuying segment is growing. It's on pace to buy 5K homes/month by 2024. 

- __iBuying:__ Zillow uses its huge trove of price data to make nearly instant cash offers on homes based on "Zestimates." That cuts out the agent middleman. 
-  __iEarning:__  Zillow charges sellers commission-like fees, and can profit on flipping homes it owns, though margins are generally thin. 


_The TikTok algo comes for real estate [JDC/ Stone via GettyImages]_

__The power of the Tok hits different...__  iBuyers accounted for just 0.2% of all US home purchases in the third quarter of last year. But thanks to one TikTok, iBuying is getting unprecedented attention, and Zillow woke up with a PR mess. TikTok's secret algorithm makes it easier for people without large followings to go viral overnight — harder to do on Insta, __[Snap](https://robinhood.com/stocks/SNAP)__, and __[Twitter](https://robinhood.com/stocks/TWTR)__. We could see more controversies like this, with companies being pushed to react in the speed of a Tok.

TikTok’s rising influence: A viral post targets the online real-estate market

🚗 Tesla goes FSD

__Rough week for PR...__ WSJ got its hands on some juicy __[Facebook](https://robinhood.com/stocks/FB)__-internal docs, and the bad headlines have been snowballing. Controversies include: a secret Facebook [moderation program](https://snacks.robinhood.com/newsletters/6273N36MQkF8DmmFKWXxCz/articles/2ovyNZgvE7UCLZgejwImpo/) that exempts celebs from usual posting restrictions, and a test initiative that pushed positive news stories about FB to users. The latest shocking revelation: FB has extensive [internal research](https://www.wsj.com/articles/facebook-knows-instagram-is-toxic-for-teen-girls-company-documents-show-11631620739) showing that Instagram is toxic for teens.

__Not a secret...__ Criticism of social media's impact on mental health has been building for years, amplified by documentaries like *The Social Dilemma* and vocal lawmakers. What's notable about FB is the scale of the problem. FB researchers consistently found that Insta is harmful for a significant percentage of users — especially young girls.

- __32% of teen girls__ said that when they felt bad about their bodies, Instagram made them feel worse.
- __6% of American users__ who reported suicidal thoughts traced those desires to Instagram. For British users, it was 13%.
- __+178%:__ Suicide deaths for children ages 10 to 14 nearly tripled from 2007 to 2017, when social media saw mass adoption.

__The paradox...__ The most problematic social app features also seem to drive the most engagement — along with profits and stock prices. Last quarter, FB's revenue soared, and profit nearly doubled to $9.5B. __[Snap](https://robinhood.com/stocks/SNAP)__ and __TikTok__ are also experiencing strong growth, largely thanks to young users who are growing up with these apps:

- __40%+ of Insta users are 22 and younger.__ Snap reaches 90% of US 13- to 24-year-olds. And 60% of TikTok users are between the ages of 16 and 24. 


Social

__We might be reaching a tipping point...__ Despite all the bad PR, social companies' revenue engines are thriving. Extensive regulations exist to protect our physical health (think: the FDA for food and drugs, and the NHTSA for driving). But we don't have many guardrails to protect *mental* health. If social giants start seeing regulatory and public criticism hit their balance sheets, an inflection point could force change. Already, lawmakers are pressing Facebook to abandon its plan to launch Instagram for kids.

Facebook’s Spiral: secret docs reveal the extent of Insta’s mental health toll on young users

__Surreal estate...__ Last week, markets wobbled as Chinese property giant __Evergrande__ missed an $83M payment — and it’s just the tip of a *$300B* debt iceberg. Investors [fear](https://snacks.robinhood.com/newsletters/3Bs2pOGJvHdNI3cCRY71xs/articles/1qtE8qfWuwZ3TCDJAbdXaw/) that Evergrande's collapse could cause a Lehman-esque global stock slump, and throw markets into turmoil. If Evergrande defaults, its financial partners, including __HSBC__, __BlackRock__, and __UBS__, could lose big money. Investors are watching to see if Evergrande will come up with the cash during its 30-day grace period — or miss more payments.

__You're gonna need a bigger boat...__ More like a higher ceiling.  Quick refresher: The US Treasury’s borrowing is limited by a “debt ceiling.” If it needs more cash, it asks Congress to raise the cap. Now, the US needs a higher ceiling to cover trillions worth of Covid expenses, but Congress can’t agree on a limit. If a deal doesn't happen, the US could default on its debts for the *first* time. Analysts say there’s a 20% chance of default, which could wipe out as many as 6M jobs and $15T in wealth. 


Stories we're watching...

__Bed Bath & Beyond expectations...__ When you finally get the fitted sheet on the twin bed. Last quarter, __Bed Bath & Beyond__'s sales of bathroom and home organization products surpassed pre-pandemic levels, doubling from last year. Cue: BB&B raised its annual sales expectations,  and expanded its __DoorDash__ partnership to offer more delivery. We’ll see if the bedding icon saw a back-to-college boost when it reports quarterly earnings Thursday. 

__Fashion vs. #Flation...__ Consumer spending surged this spring when shoppers “revenge spent” on new outfits and plane tickets after a couch-bound year. While boosted unemployment benefits have ended, $300/month child tax credits ([#SecretStimulus](https://snacks.robinhood.com/newsletters/4UfptC7RMAEOo0YSfMmIZm/articles/9MKQo3q2RW7laXpPvRaf6/)) are now getting doled out. Experts expect spending to keep rising, but prices are also continuing to rise (#inflated). We’ll see if "revenge spending" has continued when inflation-adjusted consumer spending numbers drop on Friday.

- __[Beat](https://snacks.robinhood.com/newsletters/5FNosAv8NvHNCzrNb49Ii6/articles/4O0eLLUfla8wJsZbvh3aNS/):__ __Universal Music__ shares soared 40% last Tuesday after going public, as the $53B music giant competes to make a soundtrack for the digital economy.
- __[Mine](https://snacks.robinhood.com/newsletters/Wse3pzG993ntz6I6lNfH0/articles/9jkoKs1Rhhifc8OVYQOlZ/):__ __Ford__ partnered with "urban mining" company __Redwood Materials__ to recycle its EV batteries from cars like the Mustang Mach-E.
- __[IRL](https://snacks.robinhood.com/newsletters/Wse3pzG993ntz6I6lNfH0/articles/1Zx3n1CYZfK7B547vqTIGO/):__ __Amazon__ reportedly plans to open physical department stores that feature QR codes, touch screens, and techy dressing rooms. The goal: end "retail ghosting."

_Remembering where the Bed Bath & Beyond coupons are stashed [sturti/E+ via GettyImages]_

📱Insta’s mental health toll

__Disruption on Level 2 Women's...__ __[Amazon](https://robinhood.com/stocks/AMZN)__ upended department stores by becoming a click-to-buy shopping behemoth. Now, the Zon reportedly plans to disrupt physical department stores again — *by opening its own*. Amazon tried to keep it hush-hush, but WSJ's "people familiar with the matter" (#PFWTM) [revealed](https://www.wsj.com/articles/inside-amazons-department-store-plans-high-tech-dressing-rooms-its-own-apparel-brands-11632303002?mod=business_lead_pos2) some juicy deets about the rumored stores...

- __What:__  The Zon's own clothing brands would be featured front-and-center. Amazon launched private label apparel in 2016, and now has 100+ brands. This year, it surpassed __[Walmart](https://robinhood.com/stocks/WMT)__ as America's largest clothing seller (wild). 
- __Why:__ Amazon wants to see if stores can boost sales of private labels, while merging the digital and IRL experience. The first stores could open near San Francisco and Columbus, OH as early as next year.

__Do you have this in size Prime?...__ The most disruptive part of the Zon's rumored stores: techy dressing rooms. According to WSJ, customers could scan QR codes of items they want to try via phone app, while associates gather the fits and deliver them to rooms. But what happens *inside* the dressing room is even techier:

- __No awkward door-talking:__ Instead of calling for help through the door, you could request more items using a touch screen. 
- __No barefoot browsing:__ Instead of rushing out of the stall to dig for better items, the screen could recommend other clothes based on what you've scanned. 

_Alexa, show me this in blue [Kris Ubach and Quim Roser via GettyImages]_

Dressy

__It's harder to "retail ghost" in person...__ That's partly why Amazon has expanded into physical stores for groceries, books, and now potentially clothes. Dressing rooms are the digital shopping carts of physical stores. But it's easier to abandon items in your e-cart than to walk out of a dressing room empty-handed. Clothes typically have higher profit margins than other items. Amazon's hoping its techy rooms will reduce retail ghosting and returns, while boosting cushy apparel sales.   

Amazon reportedly plans to open department stores with techy dressing rooms at the core

__Where is my mined?…__ __[Ford](https://robinhood.com/stocks/F)__ partnered with battery recycler __Redwood Materials__ to recycle EV batteries from its e-cars, like the Mustang Mach-E. Redwood, started by an ex-__[Tesla](https://robinhood.com/stocks/TSLA)__ exec, is a Nevada-based “urban mining” startup. It extracts valuable metals like lithium, nickel, and cobalt from old cell-phones, appliances, and car batteries. One EV battery = 166 iPhones worth of cobalt. How it works:

1. __Trash:__ Ford sends its old EVs to Redwood’s US processing facility.
2. __Transform:__ Redwood recovers 95%+ of battery materials by “mining” metals, then sends them back to Ford. 
3. __Treasure:__ Ford and other car makers build new EV batteries from the reclaimed metals. 

__What’s yours is mine(d)…__ For a price. The metals in EV batteries and smartphones are already pricey because they’re globally sourced: Your iPhone could contain Congolese cobalt or Bolivian tin. But prices are spiking even higher. Lithium prices have *doubled* since November. Battery recycling is booming since it reduces production and transit costs: 

- __$25B:__ How much of its battery-recycling biz Redwood plans to shift from Asia to the US. 
- __$50B and $174B:__ Biden's commitments to the domestic chipmaking and EV industries, respectively. EV incentives could give the battery biz an energy boost.

Mine

__Supply circles are the new supply chains…__ Because one car’s trash is another car’s treasure. Other EV-makers are also trying to “close the loop” of their supply chains by recycling their own batteries: __Tesla__ recycles its e-batteries, and __[GM](https://robinhood.com/stocks/GM)__ partners with battery recycler __Li-Cycle__. It’s not just EVs, either: Next time you recycle your cell-phone or laptop at __[Best Buy](https://robinhood.com/stocks/BBY)__, it could end up with Redwood.

Ford’s new EV battery recycling deal could take “urban mining” mainstream – and ease the supply crunch 

👗 Amazon department store rumors

__Welcome to workationland...__ __[Airbnb](https://robinhood.com/stocks/ABNB)__ CEO Brian Chesky predicts a revolution: *a travel revolution*. At a conference this week, Chesky said he expects the industry to bounce back bigger than ever. Chesky believes a “travel revolution” will usher in a new golden age of travel, that’s more free-style than pre-pandemic travel. What he expects:

- __Long stays:__ 50% of Airbnb stays are a week or more, and 20% exceed a month.
- __Loose plans:__ 40% of travelers don’t initially have a destination or date in mind when they visit Airbnb’s site.
- __Rural > urban:__ Rental occupancy in large US cities fell 11% this year from pre-pandemic levels, but *increased* 27% in rural areas.

__You say you want a travel-ution…__ Airbnb is a comeback story of the corona-conomy. The rental icon lost 80% of its business when the pandemic hit. But it quickly embraced the work-from-home life and catered to changing travel trends. Since then, sales have rebounded to exceed pre-pandemic levels. How Airbnb’s ushering in the travel-ution:

- __“I’m Flexible” options__ let travelers go anywhere, anytime. Handy, since 70% of US companies will continue offering flexible and remote work.
- __Unique stays__ like boat houses, yurts, caves, and even shipping containers cater to adventure-hungry, couch-tired remote workers (#edgy).
- __Off-the-beaten-track options__ in rural allow travelers to stay socially distanced as part of Airbnb’s “Greatest Outdoors” campaign.
- __Online experiences__, like a Mezcal & Tequila Cocktail Masterclass, give travelers Covid-safe options. 


_Airbnb review: 5 stars for location, 1 star for no microwave [Marco Bottigelli/Moment via GettyImages]_

Bleisure

__Revolutionize to thrive...__ is better than “adapt to survive.” Airbnb thrived during the pandemic by recognizing the “old” travel biz was gone, and quickly building new experiences for remote, Covid-conscious customers. But it’s harder for some travel companies to adapt: Despite a rebound in leisure trips, the airline biz is struggling. Business travel, which brings in 75% of airlines' profits, still isn't budging back.  

Airbnb's CEO is planning for a travel-ution — and it’s all about flexibility (and yurts)

__Square-toe heels out in public...__ Princess Polly just hit the US public market. You've probably seen Gen Z “microinfluencers” doing hauls of its clothes (#PollyHaul). The trendy online fashion boutique, owned by __[A.K.A Brands](https://robinhood.com/stocks/AKA)__,  is one of the first fast-fashionistas to hit Wall Street since ASOS. Like ultra-fast fashion giant Shein, A.K.A churns out 500 to 800 styles per week across its brands, which include Princess Polly, Petal & Pup, and Rebdolls. But A.K.A. shares fell 9% after their NYSE debut. 

- __Used > new...__ Fast-fashion isn't so fashionable anymore. Recommerce and thrifting have been #thriving recently thanks to enviro-focused Zillennials.
-  __Wild stat:__ The fashion industry is responsible for 10% of global carbon emissions — and fast-fashion is one of the worst offenders.

__Recycled t-shirt bidding war...__ The ~$30B fast-fashion market is projected to grow 22% this year from 2020 – but younger consumers don't love the environmental price tag, and are willing to pay extra for more sustainable fashion. Now, fast-fashion brands are trying to hop on the green wave. Polly launched an "Earth Club" and started using "low-impact" clothing material, H&M plans to use 30% recycled materials by 2025, and UK-based BooHoo pledged to halve emissions by 2030.


Wedge

__Fashion isn't sustainable, but sustainability is fashionable..__ On one end, we've got recommerce brands like __ThredUp__ and __Poshmark__ that have leaned in to green. On the other, brands like Shein and __Forever21__ are focused on constantly-changing trends — which requires churning out thousands of new items each day. Gen Z controls $140B+ in spending power,  and 25% of GenZ'ers say their purchasing decisions are influenced by environmental impact. Fast-fashion may have to change to stay on trend. 

Princess Polly parent A.K.A Brands goes public as fast-fashion butts heads with sustainable trends 

🚐 Airbnb's travel-ution 

__Sound on…__ __Universal Music Group’s__ stock soared ~40% yesterday after dropping on an Amsterdam stock exchange, giving the world’s largest record label a $53B market cap. UMG represents stars like Taylor Swift, Justin Bieber, Billie Eilish and The Beatles. Now, it’s benefiting from the streaming revival of the music industry. 

__YouTube to MP3 download…__ The rise of streamers like __[Spotify](https://robinhood.com/stocks/SPOT)__ and __[Apple](https://robinhood.com/stocks/AAPL)__ reversed the music industry’s 15-year, LimeWire-powered decline. Since 2016, record labels’ sales have increased every year. Last year, streaming accounted for 83% of $12B total US music sales. But the “Big 3” record labels — __Universal__, __Sony__, and __[Warner](https://robinhood.com/stocks/WMG)__ — were privately owned until recently. 

- __Hot single:__ Warner Music [went public](https://snacks.robinhood.com/newsletters/1WiwiJZ2IRsY4gKeFWU4um/articles/4sBaguWCpI98yjIJ31UiSz/) last summer on the Nasdaq, but only listed 14% of its shares. Since then, its market cap has nearly doubled to $23B. 
- __Whole album:__ Universal Music listed 60% of its shares. Gaming giant __[Tencent](https://robinhood.com/stocks/TCEHY)__ — which licenses tunes for games —already owned a 20% stake. 
- __Still in the studio:__ Sony Music, valued at an estimated $62B, is still only accessible to investors as part of wider conglomerate __[Sony Group](https://robinhood.com/stocks/SONY)__.

_Getting that musical cheese [Catherine Falls Commercial/Moment via GettyImages]_

Biebs

__The digital economy needs a soundtrack…__ and __TikTok__, __[Peloton](https://robinhood.com/stocks/PTON)__, and Fortnite-maker __Epic Games__ are paying big bucks for the best beats. The opportunity to supply in-app songs is so huge: already, 10% of the total $22B in global streaming sales last year came from partnerships with popular apps. UMG already partners with __[Spotify](https://robinhood.com/stocks/SPOT)__, __[Apple](https://robinhood.com/stocks/AAPL)__, __[Facebook](https://robinhood.com/stocks/FB)__, __[Snap](https://robinhood.com/stocks/SNAP)__, TikTok, and video-sharing app __Triller__. Looking ahead, its CEO expects billions in future deals with makers of smart speakers, connected cars, and social apps. 


Universal Music soars after going public — and TikTok tunes could be its new growth engine

__The Netflix of cars...__ What __[Volkswagen](https://robinhood.com/stocks/VWAGY)__'s going for. This month, the car giant [launched](https://www.volkswagen-newsroom.com/en/press-releases/volkswagen-is-picking-up-the-pace-of-its-business-model-20-and-offering-car-subscriptions-from-today-7442) an electric car subscription service in Germany to accelerate its creatively-named “Business Model 2.0.” Volkswagen's goal: transform from a car manufacturer to a "mobility services provider."

- __For ~$600/month,__ the "AutoAbo" subscription offers access to 2K+ of VW's all-electric ID models.
- __"Everything but the electricity...”__ Sounds like a TJ's seasoning. The subscription includes  insurance, registration, maintenance, and 500 free miles/month. 
- __DTR:__ VW describes the commitment factor as mid-way between leasing and car sharing.

__Flexible like pandemic leggings...__ A typical car lease locks you in for two years. VW's subscription is flexible, with a three month minimum. This week, VW also showed its commitment to *low*-commitment mobility by filing an offer to buy European rental car giant __Europcar__. Europcar's 350K vehicles at airports and train stations could support the expansion of VW's subscription footprint. 

- __By 2030,__ VW says that 20% of its sales could come from newer offerings like subscriptions and car sharing. But it has an [iffy track record](https://fortune.com/2021/07/29/volkswagen-car-rental-company-europcar-uber-competitor-software/) with past attempts. 
- __Flexibility is (car) key:__ “A growing number of people don’t want to own a vehicle permanently," according to VW. 
- That's why car-sharing companies like __Zipcar__ have seen success in NYC and other hubs — and why __Uber__ and __Lyft__ launched car rental services to complement ride-hailing. 


Subscribe

__The new generation is "low commitment"...__ That requires high-flexibility biz models. Even pre-pandemic, Millennials were moving [more often](http://zillow.mediaroom.com/2019-10-03-Millennials-Are-Moving-More-Frequently-Than-Previous-Generations#:~:text=3%2C%202019%20%2FPRNewswire%2F%20%2D%2D,a%20new%20Zillow%C2%AE%20analysis.) than previous generations. During the pandemic, people moved from cities to suburbs and Airbnbs, and from offices to "work-from-anywhere" locales. [70%](https://www.marshalltribune.com/premium/brandpoint/new-survey-how-companies-are-responding-to-the-delta-variant,22645) of US companies will continue offering remote or flexible work options. And over [a third](https://www.salamancapress.com/news/state/report-over-a-third-of-gen-z-and-millennial-workers-are-looking-for-a-new/article_bb774d1c-37e0-5ed8-9f81-e42835d4b505.html) of Gen Z and Millennial workers are looking for new jobs. When you don't know where you’ll be in two weeks, long-term commitments are daunting. Now, more car manufacturers might adopt flexible subscription models. 