__Choose your server...__ __Discord__ is the six-year-old social platform that hosts everything from your Fortnite marathon to your cousin’s 3rd-grade birthday party. It's kind of like Zoom, Slack, and Twitch — *all in one*. Discord started as a chat tool for gamers, but has expanded to all kinds of virtual meetups during the pandemic. Think: group *Love Island* binges, homework clubs, and houseplant interest groups. And it's [crushing](https://www.wsj.com/articles/a-social-network-without-ads-discord-defies-convention-11615199401?mod=djemalertNEWS) it.

- __~3X:__ Discord nearly tripled revenue last year by selling subscriptions with exclusive perks. 
- __140M:__ Discord's monthly users, which have doubled during the pandemic.
- __#2:__ In January, US adults spent more time on Discord than on Twitter, Snapchat, and Reddit. It was 2nd only to Facebook among social networks. 
- __$7B:__ Discord’s valuation doubled in December (yep, still private).

__Discordant with the norm...__ Discord is designed for real-time communication — *not* scrolling through days-old hiking posts. But the biggest difference between Discord and other social networks is *how it makes money*. 

- __Discord makes 0% of its sales from ads__. Meanwhile: __[Facebook](https://robinhood.com/stocks/FB)__, __[Snap](https://robinhood.com/stocks/SNAP)__, __[Twitter](https://robinhood.com/stocks/TWTR)__, and __[Pinterest](https://robinhood.com/stocks/PINS)__ each make more than 90% of their sales from ads.
- __For $10/month or $100/year,__ Discord users can subscribe to "Nitro" for perks like special emojis and clearer video resolution. Discord is also testing other features, like original multiplayer games and e-stickers.


_Discord Doctors' Happy Hour_

__Ads are addicting, subscriptions are nourishing...__ for most social biz models. Social media companies make the product "free," but use your data to target you — and then they can't stop. The ad-based biz model has gotten more heat lately (hence: Google [removing](https://snacks.robinhood.com/newsletters/11dpbcu8CVBsUReq1QrF8L/articles/39FeYXdrZm8JbQiiSGUgHf/) third-party cookies). So social companies are venturing beyond ads: Twitter is launching a paid “Super Follow” subscription, and __Clubhouse__ [plans](https://www.joinclubhouse.com/welcoming-more-voices) to ship creator subscriptions. Paid subs are harder to sustain, but they're a reliable meal of monthly revenues if they work. And it’s easier to start with subscriptions than charge later on.


Discord nearly triples sales by doing the opposite of Facebook

__Does it come in yellow flavor?...__  Gatorade doesn't want to just be the thing you bring to soccer matches — it wants to be the thing you *wear* at them. The __[Pepsi](https://robinhood.com/stocks/PEP)__-owned brand just pulled an Apple: it's [launching](https://www.cnbc.com/2021/03/01/gatorade-launches-gx-sweat-patch-that-measures-sweat-hydration-levels.html) its first wearable.

- __Gx Sweat Patch:__ Looks like a cool band-aid, actually a ~$13 single-use patch that measures your fitness levels (by pulling the data o*ut of your sweat*). 
- __Gx App:__ You scan the patch on Gatorade's app post-Zumba sesh to reveal your unique sweat profile. Think: sodium loss and sweat rate.

__No, I don't want a Pepsi instead...__ __[Coke](https://robinhood.com/stocks/KO)__ may be winning on soft drinks, but Pepsi's winning on sports drinks: Gatorade dominates the US sports drink category with a whopping 72% of market share — Coke’s Powerade lags as #2 with a 16% share. That's probably why Pepsi mentioned Gatorade 8X during its last earnings call (more than Mountain Dew). Now it's moving into pseudo-Fitbit territory to seize on a growing trend: personalization. 

Sweat

__Personalization = the ultimate product puppy...__ From apps that track your sleep, to watches that track your heart rate, we're becoming obsessed with knowing more about *ourselves*. That's why Gatorade's CEO says personalized products can be sold at a premium (read: more $$$). Companies that customize products are seeing faster sales growth. Personalization can also drive loyalty, by making us feel *extra* special. Gatorade’s end goal with Sweat Patch isn’t FitnessTech — it’s personal connection.

Gatorade launches a fitness wearable (but not for the reason you might think)

Dow Jones

S&P 500

Nasdaq

Bitcoin

🎮 Discord = the anti-Facebook

__Do you remember?...__ the 21st of December (cue: Earth, Wind, and Fire jam). Back then: the stock market was hitting record highs left and right, and tech stocks were leading the charge. After peaking in mid-February, markets have fallen back to around December levels. Tech stocks got hit especially hard: the tech-heavy __[Nasdaq](https://learn.robinhood.com/articles/1GXPrecRfkSNp0aBblBSsL/what-is-the-nasdaq/)__ index is down 8% from its February 12th peak, and is up less than 2% for the year (after being up 11% at its high). 

- __Tech stocks are near “correction” territory:__ A drop of 10% or more from the most recent high. [Corrections](https://learn.robinhood.com/articles/5Ox6TeuJAgvthA6NbsWmu0/what-is-a-correction/) can hit assets (like stocks), indexes (like the Nasdaq), or entire markets. On Friday, the Nasdaq briefly hit a correction, when it was down 12% since Feb. 12. 
- __Big Tech influences the whole market,__ which is reflected in the __[S&P 500](https://learn.robinhood.com/articles/7kFFEUv46vmMCmMfLuNiRX/what-is-the-s-and-p-500/)__ index. On Feb. 12: __[Apple](https://robinhood.com/stocks/AAPL)__, __[Microsoft](https://robinhood.com/stocks/MSFT)__, __[Amazon](https://robinhood.com/stocks/AMZN)__, __[Tesla](https://robinhood.com/stocks/TSLA)__, and __[Facebook](https://robinhood.com/stocks/FB)__ made up a whopping [21%](https://www.forbes.com/sites/jonathanponciano/2021/02/12/is-the-stock-market-about-to-crash/?sh=44d8132371de) of the S&P 500’s value. 
- __BTW:__ If the market falls *20%* below its recent peak, it turns from a correction into a “[bear market](https://learn.robinhood.com/articles/5Ox6TeuJAgvthA6NbsWmu0/what-is-a-correction/).” We saw that happen from February to March of last year, when Covid hit.

__Why it's going down...__ Some investors think the tech sector is overvalued. Rising interest rates and inflation fears are also a huge part of it. Some worry that the Fed will raise interest rates to curb potential inflation, despite Jerome Powell saying (multiple times) that it’s unlikely to happen soon. To see why higher interest rates can be bad for stocks, check out our [explainer](https://snacks.robinhood.com/newsletters/TkemicSGU43NTUB9d1ASr/articles/2mJPn77i6fUo7xq3qNVfjA/).

- __Combine these with the vaccine rollout and economic recovery,__ and you’ll see why stocks that were crushing it mid-pandemic are falling now. 
- A few examples: __[Peloton](https://robinhood.com/stocks/PTON)__, __[Zoom](https://robinhood.com/stocks/ZM)__, __[Square](https://robinhood.com/stocks/SQ)__, and __[Teladoc](https://robinhood.com/stocks/TDOC)__ are all down over 20% since February’s peak.


Correct

__Corrections are normal...__ For long-term investors, a correction can be like a small dip in the hill toward reaching investing goals. Historically, the market has recovered from corrections (though some took longer than others). While they might be painful short-term, corrections can help "correct" the prices of overvalued stocks. Markets were frothy at their peak — a correction is kind of like a barista skimming off foam. In the past, they've been followed by periods of growth. The US stock market has had more than 25 corrections since WWII. 

Tech stocks move toward “correction” territory: we break it down

__Right in the bullseye...__ __[Target](https://robinhood.com/stocks/TGT)__ nailed it last year. Sales jumped a record 20%, up $15B+ from 2019 — that's more than Target's total sales growth *over the last 11 years*. Online order pickup and delivery soared, as you grabbed mini waffle makers *curbside*. Target's 1.9K US stores are [key](https://snacks.robinhood.com/newsletters/2BePZcjRjN3cnJCl6ot1Kq/articles/cquFQkd45E2AW0mpWBRJH/) to its success: Tarjay uses stores as fulfillment hubs, and 95% of sales came from stores in 2020. Customers who shop both in-store *and* digitally spend ~4X more money than those who shop only in-store — and nearly 10X more than online-only shoppers. That's why Target plans to invest $4B into stores each year.

__Forgot the cashew pesto...__ __Instacart__ raised $265M in fresh funding, catapulting it to a $39B valuation — that's more than *double* its last valuation in October. It's the second time in a year that Instacart's valuation has doubled after bagging venture capital $$$. No shocker there: grocery and delivery have thrived during the pandemic — Instacart has both. In June of last year, Instacart [claimed](https://www.grocerydive.com/news/instacart-claims-more-than-half-of-online-grocery-market/579509/) more than half of the online grocery delivery market.  Now, it's  [reportedly](https://www.reuters.com/article/us-instacart-directlisting-exclusive-idUSKBN2AX13F) considering going public through a direct listing.

Highs

Who's up...

__Chip-pocalypse Now...__ The global chip [shortage](https://snacks.robinhood.com/newsletters/31E6cwe7ndD6pM602Hiv9R/articles/3Nn6tVCu3oGQg2XsCbQmyc/) is continuing to hurt car makers, from __[GM](https://robinhood.com/stocks/GM)__ to __[Ford](https://robinhood.com/stocks/F)__. The latest to get hit: Tesla's Chinese rival __[Nio](https://robinhood.com/stocks/NIO)__.  Nio shares plunged 17% for the week, after it [said](https://www.cnbc.com/2021/03/02/chinese-tesla-rival-nio-chip-shortage-will-hit-electric-car-production.html) that chip-pocalypse will hurt its electric car production next quarter. FYI: the average car contains 50 to 150 chips. Nio's production capacity will fall to 7.5K cars per month, down from 10K. But Nio's founder expects they can bump up production again in July.

__Call me by your name...__ __[Oscar](https://robinhood.com/stocks/OSCR)__ is the Millennial startup that's simplifying health insurance. ICYMI: American health insurance is (in)famously complex. Oscar wants to put a friendly face on it. Oscar's NYSE debut was less friendly: the stock has plunged 14% since Oscar went public on Wednesday. Investors weren't wowed by its 2020 earnings: sales fell 5% from 2019, and it lost $407M. But Oscar could [benefit](https://snacks.robinhood.com/newsletters/11dpbcu8CVBsUReq1QrF8L/articles/4zsz3h7BuSJwLsyKIn23J9/) from the growth of the gig economy, since its core customers *don't* have insurance through employers (think: DoorDash drivers).

Lows

...and who's down

_Correct yourself, before you wreck yourself_

📲 Why are tech stocks falling? 

__Throw down the stats...__ Women are taking the biggest economic slam from the pandemic. As of December, women accounted for [55%](https://nwlc.org/wp-content/uploads/2021/01/December-Jobs-Day.pdf) of the 9.6M net jobs lost in 2020. And nearly half of the 12.1M jobs lost among women from February to April *haven’t* returned. This January, the unemployment rate for women and men was about the same (just over 6%). But that’s largely because women are dropping out of the labor force at higher rates. People who stop searching for a job aren’t considered unemployed. 

- __2.5M+__ women have dropped out of the labor force between February 2020 and this January, compared to ~1.8M men. 
- __56%:__ Women’s labor force participation rate, which is at its [lowest](https://fred.stlouisfed.org/series/LNS11300002) level since 1987. Women of color have been especially affected.
- __-4.8%:__ This January, there were 4.8% fewer Black women in the labor force than a year ago — compared with a 3.1% drop for white women. 

__Not your typical recession...__ Historically, men have been hit harder by recessions. “Normal” recessions tend to strike hardest in sectors with high male employment (think: construction and manufacturing). That’s why the ‘08 financial crisis was [referred](https://www.nber.org/system/files/working_papers/w27660/w27660.pdf) to as a “mancession.” The coronaconomy reversed this trend into a “she-cession.” Some major reasons why:

- __Job types:__ Women are [overrepresented](https://fas.org/sgp/crs/misc/R46632.pdf) in high-contact industries like dining, retail, education, and travel. These have been majorly hit by lockdowns and social distancing.
- __Childcare:__ With schools closed, women took on a [larger](https://www.nber.org/system/files/working_papers/w27660/w27660.pdf) share of extra childcare duties than men — and many have left jobs to do so. 


__It’s getting harder to bring back lost jobs...__ especially those lost among women. The overall pace of recovery has slowed each month since June. Schools are still closed in many parts of the US, and thousands of businesses that largely employed women have permanently closed or scaled back operations (think: airlines, restaurants, and malls). Each month that women stay unemployed or out of the labor force makes it harder to find a job. But the vaccine rollout and upcoming stimulus package could help speed things up. The February jobs report drops *today*, so we’ll see if there’s any improvement.


The “She-cession”: why the coronaconomy is hitting women harder than men

__A crown made of air...__  __[Carrier Global](https://robinhood.com/stocks/CARR)__ is the king of air conditioners. We know that because its founder, Willis Carrier, literally [invented](https://www.carrier.com/carrier/en/worldwide/about/willis-carrier/) modern air conditioning. The stock has more than 2X'd since April 2020, when Carrier spun out from its former parent company. Though its latest earnings [disappointed](https://www.barrons.com/articles/carrier-stock-crumbled-after-earnings-what-investors-missed-51612911451) analysts, Carrier believes the best is yet to come. 

__*"Change is in the air"*...__ according to Carrier's earnings [presentation](https://ir.carrier.com/static-files/a9cc6ceb-d7e8-46e5-ac87-fff92cb11401) (surprisingly interesting). Three megatrends are bringing favorable winds to Carrier's biz: climate change, urbanization, and a growing middle class. Hotter days, city living, and rising disposable income are expected to keep boosting sales for the entire HVAC industry. Some cool numbers:

- __19__ of the hottest years on record have been in the past 20 years. Sweat = more A/C.
- __141:__ The average number of days per year above 70⁰F in NYC in 2020, up from 111 in 2000. That number is expected to hit 184 by 2050.
- __55%:__ The percentage of humans living in cities in 2020, up from 45% in 2000. The global urban population is expected to hit 70% by 2050.
- __3.6B:__ The world's "middle class" population in 2018, up from 1.5B in 2020. That's expected to hit ~5.5B by 2030. 

__Air quality has gained fresh importance....__ First, there's the pandemic effect: poor ventilation can increase virus spread — so schools, offices, and hospitals became more focused on air quality (good for HVAC companies). Second, there's the environmental effect: in 2020, companies committed billions of $$$ to fighting climate change and reducing emissions  — but [15%](https://www.barrons.com/articles/carrier-stock-crumbled-after-earnings-what-investors-missed-51612911451) of greenhouse gases are from HVAC systems. That's why companies like Carrier are focused on energy-efficiency. Carrier's goal: to save customers 1 gigaton of carbon emissions by 2030. That's equivalent to ~20% of what the US emits in a year.

Carrier, the King of A/C, has three global megatrends blowing in its favor

_141: The average number of days/year above 70⁰F in NYC_

👩‍🎤 Unpacking the "She-cession" 

__Cookie Monster goes on a diet...__ __[Google](https://robinhood.com/stocks/GOOGL)__ is Earth's biggest digital advertiser. In 2020, it accounted for 52% of the world's digital ad spend (FYI: *$292B*). But it's making some privacy changes that'll reduce its precious targeting abilities. 

-  __Last year,__ Google said it would remove third-party cookies from Chrome  by 2022. These tiny pieces of data are widely used to track your individual browsing activity from site to site.
-  __*Yesterday,*__ Google [said](https://blog.google/products/ads-commerce/a-more-privacy-first-web/) that it *won't* introduce new ways to track individual browsing once cookies are gone. 

__That's the way the cookie crumbles....__ Well, at least the third-party cookie. Google isn't scrapping *first*-party cookies, which are meant to be used on the same domain they're placed on. They're why you don't need to log in each time you open Gmail (cookie remembers). Google will still track your Search history, and target ads/results there — same goes for YouTube. But when you visit BuzzFeed, Google won't target ads based on your "organic cat food" search.

- __Google isn't getting rid of tracking:__ That would kill its biz. Instead, it could use aggregated, anonymized tracking to target without *individual* info. One of Google's solutions includes putting people into groups based on similar browsing behaviors. 


_Advertisers love that cookie magic_

Track

__Google thinks the benefits outweigh the losses...__  and it could be right. Individualized tracking has come under fire by regulators and privacy advocates. This could be a move to get ahead of regulation — and win points with the public. Plus, Google's biz likely won't take a major hit thanks to the alternatives it's cooking up: with group-based tracking, Google [says](https://www.cnbc.com/2021/01/24/google-extremely-confident-about-third-party-cookie-alternatives-.html) advertisers can expect at least 95% of the conversions per dollar spent (compared to cookie-based advertising). Wall Street isn’t worried, either: Google shares fell only 1% more than the  market yesterday.


Google will stop using your individual browsing history to sell targeted ads

__And the Oscar for best NYSE debut goes to...__ *not* __[Oscar](https://robinhood.com/stocks/OSCR)__. If the __[Airbnb](https://robinhood.com/stocks/ABNB)__ and __[DoorDash](https://robinhood.com/stocks/DASH)__ IPOs were [blockbusters](https://snacks.robinhood.com/newsletters/3dRtKJ3pIUtnX1yDSLVTJY/articles/47zqImTPv4BiAjpmDbiqv4/), Oscar's IPO was more like a low-key Hulu flick. The Millennial-focused health insurance startup (you can tell by the [font](https://www.hioscar.com/)), saw its share close down 11% from their IPO price yesterday. Oscar is similar to __[Lemonade](https://robinhood.com/stocks/LMND)__, except Lemonade offers home/renters insurance. Oh, and Lemonade's stock [doubled](https://www.cnbc.com/2020/07/02/tech-ipos-getting-mispriced-as-lemonade-and-agora-double-in-debuts.html) on its first trading day (womp). Both are putting a friendly face on insurance — but Oscar has a harder task. 

__American health insurance is infamously complex...__ You could go to med school in the time it takes to understand insurance plans. Oscar's trying to make it simple, affordable, and personal — especially for people who *aren't* insured through employers. It now has 529K members. 

- __How it started:__ Oscar was cofounded by Josh Kushner in 2013 to complement Obamacare. The founders believed it would thrive on Obamacare exchanges, where people compare and pick plans.
- __How it's going:__ Not so hot. Oscar's 2020 revenue fell 5% from 2019, and it *lost* $407M (almost as much as its sales). 


Insure

__Oscar needs "gigification"...__ It's banking on  continued growth of the American gig economy. Its core customers *don't* have employer insurance. Think: DoorDash drivers, freelance writers, and part-time sitters. Oscar has a few things working in its favor. The gig economy [scored](https://snacks.robinhood.com/newsletters/7jMUu1TK8PviqbKCFjQhjC/articles/f06IOakKwXbXOcwTVNbjX/) a huge victory in November when CA voters said "Yes" to Prop 22. Now, companies like Lyft don't have to reclassify gig drivers as employees, which would've meant providing health insurance. Also: 10M+ Americans are still unemployed, and many are turning to side jobs like food delivery. 

Oscar, the "Obamacare stock," plunges after going public — it needs the gig economy 

🕵️‍♀️  Google's cookies crumble 

__Bullseye...__ If you're feeling down, just Google pictures of __[Target](https://robinhood.com/stocks/TGT)__'s bull terrier puppy [mascot](https://corporate.target.com/article/2018/12/green-monday).  Target's sales jumped a record 20% last year to $94B. Wild stat: 2020 sales grew $15B+ from 2019 — that's more than Target's total sales growth *over the last 11 years*. Tarjay [says](https://www.wsj.com/articles/pandemic-boosts-targets-growth-at-rivals-expense-11614684877) it snagged $9B in sales from competitors. Online order pickup and delivery crushed it: 18% of sales came from digital channels in 2020, doubling from 2019.

__Omnichannel is thriving...__ and thankfully, it's not a new streaming service. Omnichannel = the fancy retail term for a synchronized shopping experience that unites stores, websites/apps, and services. Think: virtually trying on Warby Parker glasses, then picking them up in-store (or vice versa). Target has been working on its omni strategy for years, and stores are a key part of that: 

- __1.9K:__ Instead of splurging to build warehouses, Target mainly uses its 1.9K US stores as hubs for shipping and pickup (unlike Amazon).
-  __95%__ of sales came from stores in 2020, including online orders. That sweatsuit you ordered likely came from the Tarjay down the street.
-  __$4B:__ How much Target will invest into brick-and-mortar stores each year to speed up its online-order capabilities.


_If Target launched streaming: "Let's go with Omnichannel+"_

Omni

__Stores are Target's leg up over Amazon...__ Target customers who shop in multiple channels (like in-store *and* delivery) spend ~4X more money on average than customers who shop only in-store — *and nearly 10X more than online-only customers*. There are cost benefits, too: in 2019, Target's move to store fulfillment slashed costs by 40%. __[Walmart](https://robinhood.com/stocks/WMT)__ has been leaning into this strategy, turning some of its 4.7K US stores into fulfillment centers. Stores give Target and Walmart an omni edge that __[Amazon](https://robinhood.com/stocks/AMZN)__ mostly lacks — especially as people start to leave the house.


 Target leans into an anti-Amazon strategy after a record sales year

__Cold towel, hot water...__ __[One Medical](https://robinhood.com/stocks/ONEM)__ is kind of like the Equinox of primary care ($200/year membership fee). The app-based concierge healthcare company went public last year, with the goal of "making people fall in love with their doctor's office." We know it loves Millennials, since it mentioned "delight" seven times in its IPO filing (more than "doctor"). Now it's dealing with some undelightful attention. 

- __The bad:__ One Medical has allegedly been letting ineligible patients and wealthy VIP clients cut the Covid vaccine line, [according](https://www.npr.org/2021/02/24/970176532/high-end-medical-provider-let-ineligible-people-skip-covid-19-vaccine-line) to NPR.
- __The ugly:__ Congress is now [investigating](https://www.cnbc.com/2021/03/02/house-panel-investigates-one-medical-for-allegedly-letting-clients-cut-covid-vaccine-line.html) the allegations. One Medical stock has plunged 15% since the NPR report dropped mid-last week. 

__The response...__ One Medical pushed back, saying that it doesn't "broadly and knowingly disregard eligibility guidelines." It also says it fired staff members that had glossed over eligibility rules. That didn't spare it from backlash: Washington state and five Bay Area counties have stopped sending vaccines to One Medical. The SF Department of Public Health went a step further, asking it to *return* 1.6K doses of the Pfizer vaccine. 


__Vax distribution already has an equality problem...__ If One Medical is exploiting the (federally funded) vax rollout for its own biz interests, it's making the inequality worse. The vaccine is still scarce, and [67%](https://covid.cdc.gov/covid-data-tracker/#vaccination-demographic) of people who have been vaccinated in the US so far have been white. On the bright side: __[Johnson & Johnson](https://robinhood.com/stocks/JNJ)__'s game-changing [one-shot](https://snacks.robinhood.com/newsletters/6jwYdiy4al8n5v0GOdIik/articles/7kSxhWesI8SzTyVJS53x2B/) vaccine has started rolling out, and President Biden just said the US will be able to vax all adults by the end of May. But if the One Medical allegations are true, that could limit (or end) its vax involvement. That could hurt its growing biz and its stock price.


One Medical allegedly let VIPs skip the vaccine line (spoiler: the stock plunged)

🎯 Target's anti-Amazonian strategy 

__Like Game of Thrones...__ but for the plant-based world. Some major alliances have recently formed in the alt-food market. __Oatly__, the oat milk brand that craft coffee shops brush their teeth with, just snagged one of the highest honors in "mainstreamification": a nationwide rollout at __[Starbucks](https://robinhood.com/stocks/SBUX)__. 

- __DTR:__ Starbs has been testing Oatly at its stores in the Midwest, and even brought it to 4.3K Chinese locations. With the nationwide rollout, the Swedish oat brand is getting a major validator ahead of its recently announced IPO(at). 

__On the patty side...__ __[Beyond Meat](https://robinhood.com/stocks/BYND)__ just signed big deals with __[McDonald’s](https://robinhood.com/stocks/MCD)__ and __[Yum Brands](https://robinhood.com/stocks/YUM)__, the owner of KFC, Taco Bell, and Pizza Hut. Think: McPlant Burgers for MickeyD's, and plant-protein pizza toppings and alt-chicken for Yum Brands. Beyond has been beefing up its presence: in January, it teamed up with __[Pepsi](https://robinhood.com/stocks/PEP)__ for plant protein drinks and snacks. In 2019, it launched a Beyond Sausage breakfast sammie at 9K __Dunkin'__ locations. During the pandemic...

- __Restaurant plays didn't really pay off:__ Beyond's US restaurant sales plunged 43% last quarter from 2019, as you swapped Dunkin' sandwiches for Quaker Oats.
- __Grocery plays *did*:__ Beyond's US grocery sales popped 76%, as it expanded to more locations (including 2.4K Walmarts). To capitalize on the home life, Beyond offered more affordable patty packs to compete with beef prices.


__Beyond is a "double-dip" brand...__ and Oatly is now following its playbook. There aren't many food brands that you recognize both in the grocery aisle *and* on the restaurant menu (besides alcohol). With their strong brand recognition, Oatly and Beyond have the power to be both restaurant and grocery staples. They can rely on grocery stores when restaurant sales are down, and vice versa (aka: pandemic/recovery hedge). While Beyond has snagged more partnerships, Oatly is following its lead with this Starbs deal.


Oatly and Beyond Meat snag deals with major restaurant chains (they're hedging)

__Could buy a beachside condo...__ for the price of one __[Berkshire Hathaway](https://robinhood.com/stocks/BRK.A)__ Class A share (*~$378K* for BRK.A, ~$250 for BRK.B). Warren Buffett's legendary holding company owns businesses like Geico and Dairy Queen, and has major investments in companies like Coke and Amex. Buffett is the OG financial influencer (#finfluencer): for decades, investors have closely followed his moves.  Which brings us to...

- __Buffett's famous annual letter__ to shareholders was [released](https://fm.cnbc.com/applications/cnbc.com/resources/editorialfiles/2021/02/27/2020ltr.pdf) Saturday. It earned $42.5B in 2020, including realized and unrealized capital gains from investments. That's about half of what it earned in 2019. 
- __Back to benchmark:__ Berkshire compares its stock performance to the __[S&P 500](https://learn.robinhood.com/articles/7kFFEUv46vmMCmMfLuNiRX/what-is-the-s-and-p-500/)__ index, which is used as a benchmark for the overall market. In 2020, the S&P 500 rose ~16% — *Berkshire shares rose ~2%*.

__Playing it safe(r)...__ Berkshire has ~$138B in cash, but it didn't make any major acquisitions in 2020. It took big stakes in __[Chevron](https://robinhood.com/stocks/CVX)__ and __[Verizon](https://robinhood.com/stocks/VZ)__, but stayed away from the blockbuster deals that made it famous. *Instead*, Berkshire bought back a record ~$25B of its own shares last year. Stock buybacks are kind of like presents to shareholders. By reabsorbing their own shares, companies can improve their stock prices by reducing the number of available shares — and increasing shareholders' ownership.


Omaha

__Buffett invests in what he *knows*...__ and he doesn't really know software and high tech. Rule #5 of Berkshire's acquisition [criteria](https://www.berkshirehathaway.com/2000ar/acq.html): it invests in "simple businesses (if there's lots of technology, we won't understand it)." Berkshire *does* have a giant stake in __[Apple](https://robinhood.com/stocks/AAPL)__, and took a small(er) $735M stake in cloud company __[Snowflake](https://robinhood.com/stocks/SNOW)__ last year. But for the most part, it has stayed away from tech. Unfortunately for Buffett, Big Tech stocks currently dominate the overall market — *and they rallied big in 2020*. The tech-heavy __[Nasdaq](https://learn.robinhood.com/articles/1GXPrecRfkSNp0aBblBSsL/what-is-the-nasdaq/)__ index soared 43% last year, compared to BRK's ~2% gain.

Berkshire Hathaway invests a record amount of money... into itself 

"_Show us the Oatly_"

🔮 Buffett gives (buy)back

__Who ya got?...__ __[DraftKings](https://robinhood.com/stocks/DKNG)__ doesn't miss the days when Russian ping pong was the biggest live action on TV. Now, every major sports league is back in (bubble) action, and the sports betting app's shares have nearly 4X'd over the past year. Also helpful: 20 states (plus DC) have legalized online sports betting, and more are working on it. On Friday, DraftKings shares popped 6% after it raised its revenue outlook for 2021 and delivered strong sales:

- __2X:__ DraftKings' revenue more than doubled compared to the same period in 2019, as people hit the screens instead of the stadiums.
-  __$65:__ The average revenue DraftKings made per monthly user, up from $42 in 2019. It had ~1.5M monthly paying users last quarter.

__Love don't cost a thing...__ but attention does. DraftKings now says it's the top iGaming operator in the US, but that flex-worthy title comes at a price: DraftKings spent nearly $500M on sales and marketing in 2020 — *that's ~80% of its revenue for the year*. It basically spent 80 cents for every $1 of sales it brought in. Think: commercials, FB ads, and $500 sign-up bonus promos. While that helped it grow sales and users, DraftKings *lost* ~$844M for the year.

- __Airbnb is taking the *opposite* approach:__ In 2020, Airbnb pulled back on all marketing because its bookings took a pandemic plunge.
-  __Then something weird happened:__ Airbnb's site traffic bounced back to 95% of 2019 levels *without* any marketing spend. Last quarter, 90% of Airbnb's traffic was unpaid.
-  __Now,__ Airbnb CEO Brian Chesky says the company will never spend as much on marketing (as a % of sales) as it did pre-pandemic.


_DraftKings spends it like Beckham_

Score

__"Go-to" marketing is the best marketing...__ DraftKings has serious competitors like __FanDuel__, __[William Hill](https://robinhood.com/stocks/WIMHY)__, and __[Penn National Gaming](https://robinhood.com/stocks/PENN)__. Meanwhile, Airbnb is the clear go-to when people look for short-term rentals. Chesky thinks Airbnb doesn't need all that marketing, because "it's a noun and a verb in pop culture" (#flex). Companies like DraftKings and DoorDash rely on expensive promos to snag customers from competitors, but that "loyalty" can fade easily. Having "go-to" status reduces the need for marketing, increasing the chances of profitability.

DraftKings crushed sales, but it has a marketing reliance problem

__Screenshot these numbers...__ __[Snap](https://robinhood.com/stocks/SNAP)__ shares soared to a record on Wednesday after it updated investors about its biz. Snap [expects](https://snacks.robinhood.com/newsletters/6ayK3gl1rqepiw8vkFk0FE/articles/1w3MRpNTnNQjpGR8ALRL7z/) 50% annual sales growth for the next few years (music to investors' ears). With 265M daily users, Snap says it reaches 90% of 13- to 24-year-olds in the US. Investors also liked Snap's new strategy to grow ad sales in *non*-messaging features, like Snap Map. 35M businesses are already on Map, and Snap will continue Yelp-ifying to drive sales. With a growing mix of products, investors think Snap is past its pics-only tween stage: shares have more than 4X'd over the past year.

__*Not the band*...__ But if __[Carvana](https://robinhood.com/stocks/CVNA)__ had a theme song, it would be "Come as You Are." The online used-car seller saw its shares jump 8% after earnings on Friday. Carvana's quarterly sales jumped 65% from 2019, and profit soared 71% to an impressive $244M. People were scared of public transit, and many moved out of cities to WFS (work-from-suburb). That pumped up car demand and prices, *especially* for used cars: used vehicle prices [soared](https://apnews.com/article/prices-inflation-coronavirus-pandemic-united-states-c6f8a2a7cf916cbda0d5f112b1260997) a whopping 14% in 2020. Those increases boosted sales for online car sellers like Carvana and __[Vroom](https://robinhood.com/stocks/VRM)__.

__Arrived cold...__ __[DoorDash](https://robinhood.com/stocks/DASH)__ shares plunged 18% for the week after it dropped off its first earnings report as a public company. DoorDash [beat](https://www.cnbc.com/2021/02/25/doordash-dash-q4-2020-earnings.html) expectations on quarterly sales, which more than tripled from 2019 as burrito-in-bed replaced Friday night out. But its quarterly loss more than doubled to $312M — that didn't sit well with investors. Also unappetizing: DoorDash expects order volume to fall in 2021 as restaurants reopen and people ditch the bed for the bar.

__Try meditation...__ __[Workhorse](https://robinhood.com/stocks/WKHS)__ had a rough week. The electric van maker saw its stock lose more than half its value over the week. Investors were bummed that Workhorse [lost](https://www.freightwaves.com/news/oshkosh-beats-workhorse-for-postal-service-delivery-vehicle-contract) a key contract to build __USPS__' next-generation of mail trucks. Instead, __[Oshkosh](https://robinhood.com/stocks/OSK)__ will get $482M to assemble 50K to 165K USPS trucks over the next 10 years. Workhorse brought in less than $1M in sales in the first nine months of 2020, so this government contract would’ve made a big difference. BTW: Workhorse reports earnings today.   


🏈 DraftKings pulls out all the stops

__Signed, sealed, delivered...__ On Wednesday, Biden [signed](https://www.washingtonpost.com/business/2021/02/24/biden-supply-chain/) an exec order to address critical shortages, ordering a 100-day review of the US supply chain. ICYMI: [The Great Chip Shortage](https://snacks.robinhood.com/newsletters/31E6cwe7ndD6pM602Hiv9R/articles/3Nn6tVCu3oGQg2XsCbQmyc/) is causing widespread production issues, especially for tech companies and  car makers. All that WFH'ing has eaten up all the chips, so __[GM](https://robinhood.com/stocks/GM)__ and __[Ford](https://robinhood.com/stocks/F)__ have had to shut down car plants. __[Tesla](https://robinhood.com/stocks/TSLA)__ briefly [closed](https://www.cnbc.com/2021/02/25/tesla-temporarily-halts-production-at-model-3-line-in-california-report.html) its Fremont factory  due to shortages. But...

- __Chips aren't the only issue:__ The review will assess supply chain weak spots for other critical items (Grape-Nuts [not](https://www.usatoday.com/story/money/food/2021/01/27/grape-nuts-shortage-breakfast-cereal-supply-coronavirus-demand/4259281001/) included). Think: medical equipment, pharmaceuticals, raw materials, and EV batteries.
- __The US is the world's largest importer__. In 2019, the US imported $617B more worth of goods than it exported to other countries. The pandemic made everyone more isolated. Now American industry is suffering from a lack of self-sufficiency.

__Worse than the TP shortage...__ The pandemic highlighted the US’ reliance on other countries (especially China) for crucial supplies… and exposed the limits of globalization.  "Crisis mode" demonstrated how harmful that reliance can be:

- __In March,__ the US suffered a serious [shortage](https://snacks.robinhood.com/newsletters/4ccVNBL1WDcK4FkFwPcBis/articles/5oH5trxIDhAhz6R7hhXU2j/) of masks and ventilators. The US had to import at least [half](https://www.washingtonpost.com/health/2021/02/02/medical-mask-shortage/) of its PPE from China, and it still wasn't enough.
- __*Now*,__ there's this chip shortage. But more than 80% of chip production happens in Asia, with China leading the charge. The US is also heavily reliant on China for drug ingredients, electronic components, and "rare-earth elements" used in hundreds of tech products. 


Fried

__The US has entered a Cold Trade War...__ To prevent future shortages, the Biden admin is trying to shore up domestic supply chains and trade with friendlier countries  — instead of introducing new China tariffs like the Trump administration (don't forget the French wine). While Biden [isn't](https://snacks.robinhood.com/newsletters/18OQONWGOCQr3BPWg5Pk03/articles/3jah5iD0LYNNhuXY04QpYJ/) rushing to remove Trump's China tariffs, he’s taking a softer approach. Either way, this exec order isn't a golden fix: assessing supply chain issues is easy, but actually reducing foreign dependence will be one of America’s biggest long-term challenges over the next decade.


President Biden wants to fix the US supply chain (it's not just a chip problem)

__The stats speak for themselves…__ Minorities in America have been disproportionately affected by the pandemic, from both economic and health standpoints. Black Americans are [1.9X](https://www.cdc.gov/coronavirus/2019-ncov/covid-data/investigations-discovery/hospitalization-death-by-race-ethnicity.html#footnote02) more likely to die from COVID than white Americans, and 2.9X more likely to be hospitalized. For Hispanics and American Indians, the rates are even higher. In the first half of 2020, Black men suffered the [largest](https://www.npr.org/2021/02/18/968791431/american-life-expectancy-dropped-by-a-full-year-in-the-first-half-of-2020) decline in life expectancy, which dropped by three years. A few key factors help explain the higher risk:

- __Essential work:__ Black workers are [overrepresented](https://www.businessinsider.com/black-americans-unemployment-coronavirus-layoffs-disproportionately-high-april-bls-data-2020-6) in essential roles, like food service and public transportation, increasing the risk of infection. 
- __Other major factors:__ Crowded housing, inconsistent access to healthcare, and chronic health conditions that increase Covid complications. Also: a history of discrimination and mistreatment in healthcare has contributed to [distrust](https://theundefeated.com/features/new-poll-shows-black-americans-put-far-less-trust-in-doctors-and-hospitals-than-white-people/) in the medical system for many Black Americans. 

__On the financial side…__ The pandemic has had a disproportionate impact on Black business owners. Pre-pandemic, Black businesses were growing 2X as fast as overall businesses in the US. From February to April last year, the number of active US business owners [dropped](https://www.housingwire.com/articles/why-black-owned-businesses-have-been-hit-hardest-by-covid-19/) a record 22%. Black businesses owners took the hardest hit, dropping 41% in those three months.

__Why?...__ Geography and access to capital are key factors. Black-owned businesses are heavily [concentrated](https://www.google.com/url?q=https://apnews.com/article/virus-outbreak-health-new-york-business-u-s-news-ef407b45061d34503fa7413529b3fe04&sa=D&source=editors&ust=1614313922808000&usg=AOvVaw2st2HNB6J9Ri31NxGHyYpe) in Covid hotspots, and entered the pandemic with weaker financials and less access to capital. The financial health of businesses and individuals connects back to the massive [wealth gap](https://snacks.robinhood.com/newsletters/bg6FaCgu8qc8z1Zllmofx/articles/3ZVsKmCRQNLUOSaAVHfNJi/): the typical white family has 8X the wealth of the typical Black family. 


__Equitable vaccine access is key…__ to helping alleviate the impact on minority groups. But so far, the rollout hasn’t been proportional: of the people of known race who have been vaccinated, [64%](https://covid.cdc.gov/covid-data-tracker/#vaccination-demographic) have been white. Just 9% were Hispanic, 6% were Black, and 5% were Asian — and less than 2% were American Indian. Some positive efforts are underway to change this distribution: All 32 NFL teams have offered their stadiums as mass vaccine sites, many of which are close to large Black urban populations. Uber and Walgreens have teamed up to offer free rides to vax appointments for people in underserved communities. And last week, Lyft announced it’s doing the same with CVS.

The pandemic effect: the health and economic impact on Black Americans 

10-Yr US Treasury

_Reopening of Tesla's Fremont plant_

🍟 Biden cooks up a plan 

__Ghosted, then unghosted...__ __[Snap](https://robinhood.com/stocks/SNAP)__ can relate. Two years ago, Snap stock was languishing around $10/share. After going public in March 2017, Snap consistently [failed](https://money.cnn.com/2018/02/06/technology/snapchat-earnings-beat/index.html) to beat earnings estimates for nearly a year. But the little ghost has been wowing investors over the past year, and its shares have more than 4X'd. In 2020, Snap's sales growth was more than 2X  Facebook's (granted: Snap is younger, smaller, and *still unprofitable*). This week...

- __Snap shares soared to a record high__ of ~$73, and its market cap crossed $100B for the first time. [Market cap](https://learn.robinhood.com/articles/GByCbiOluG2kcWs1AF6m5/what-is-market-capitalization/) = the total value of a company’s shares (held by investors and insiders).
- __Driving the moves:__ At its investor event on Tuesday, Snap [said](https://www.axios.com/snap-snapchat-ready-for-profits-e3a6d866-aaa1-46d4-b652-3acc812db198.html) it expects 50% annual sales growth for the next several years. 
- __Wild stat:__ With its 265M daily users, Snap says it reaches *90% of 13- to 24-year-olds* in the US. Call it Gen S. 

__Bring back the rainbow puke filter...__ Investors were also impressed with Snap's new strategy to grow ad revenue in *non*-messaging features (it's not all about Taco Bell face filters). A key growth opportunity: the Snap Map. 

- __Yelp-ifying Snap Maps:__ The map where you stalk your friends' Bitmojis has the potential to bring in big bucks from small businesses. 35M businesses are already on the Map. 
- __Map it out:__ You zoom in to the map and click on Huckleberry Cafe. Snap shows contact info, directions, reviews, and even lets you order via food delivery apps. Businesses can pay to promote their listings, Yelp-style.


Ghost

__Snap is past its tween stage...__ though many of its users aren't. It's maturing into much more than just a place to send double chin pics. Over the past year, Snap has launched new features, from [Mini apps](https://snacks.robinhood.com/newsletters/2FFx07PkihITcdXy20oUUt/articles/f5oNMz0Gj22IuOs59hqQ3/) to Spotlight (a TikTok copycat that has over 100M monthly users). It also plans to [invest](https://www.axios.com/snap-snapchat-ready-for-profits-e3a6d866-aaa1-46d4-b652-3acc812db198.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosam&stream=top) more in content, like original shows for its Discover feed. This different mix of products is key to driving more ad revenue, which Snap badly needs to become profitable.

Snap hits a record high on sales growth and ad strategy (it's growing up)

__The most annoyed-sounding company name...__ __Ardagh Group__ (pronounced: ard-*ugh*?) is one of the world's largest metal and glass packaging companies. Think: Heineken bottles, minus the beer. Now the publicly-traded company is [spinning](https://www.nytimes.com/live/2021/02/23/business/stock-market-today#ardagh-spac) off its can business into *another* public company. The new can-only company is valued at $8.5B. Unsolicited name suggestion: OnlyCans.

- __From soda and beer:__ When Ardagh acquired its canning operation in 2016 for $3B, most of its sales came from big soda and beer companies.
- __To seltzer and 'bucha:__ Today, more than half of Ardagh's $7B in annual sales come from cans for brands like White Claw, Truly, and LaCroix. 

__Weird SPACaging...__ The new company is going public by merging with a SPAC — a company that goes public only to acquire a *real* company. The SPAC is betting on the continued growth of canned drinks, which are more enviro-friendly: aluminum is  easier to recycle than plastic (Ardagh calls it "infinitely recyclable"). OnlyCans has two trends going for it:

- __Short-term:__ Canned-everything. You're not drinking glass bottled beer at the bar — you're cracking open a canned wine at home.
- __Long-term:__ Sustainable-everything. Just this month, Nestle announced it's selling its North American water biz for $4.3B (bye, plastic bottles). 


_Stop trying to make OnlyCans happen_

Canny

__Commodity is hard to conquer...__ Ardagh is selling "shovels" in the seltzer gold rush. But at the end of the day, an aluminum can is an aluminum  can. And Ardagh can't control the price of a commodity like aluminum. Aluminum prices have risen over the past year, partly thanks to the "canned-everything" trend. Aardagh also has to compete on price with companies like __[Ball Corp](https://robinhood.com/stocks/BLL)__, which makes Coke cans. That's likely why Aardagh's profit margin is slim. 

The company that makes cans for White Claw is spinning off on a double trend

👻  Snap puts itself on the Map 

__New haircut?...__ Markets look a little different recently. The tech-stock heavy __Nasdaq__ index is down nearly 5% for the week: strange, since Big Tech has been on a tear over the past year. Also: interest rates are rising from historic pandemic lows. The 10-year Treasury yield (basically: the interest rate the US government pays to borrow money) has risen to its highest level since February 2020. The average interest on a 30-year-fixed-rate mortgage also rose. 

__What's going on?...__ Falling tech stocks and rising interest rates are likely related to one thing: *inflation fears*. Investors are scared that the purchasing power of the dollar will decrease and prices will rise — or, that a $4 coffee today could cost $6 in a year. To help the economy, the Fed has added trillions to the money supply through stimulus packages and bond-buying sprees. And we could get another $1.9T stimulus package soon. That increases cash in circulation, which could boost inflation risk.

- __Why interest rates are rising:__ With so much cash in the system, people are worried that the money they receive in exchange for lending could be worth less in the future. So they’re “demanding” higher rates from bonds.
- __Why tech stocks are falling:__ Rising interest rates can make bonds and savings accounts more attractive compared to riskier assets (like tech stocks). They also increase the cost of borrowing. That can curb profits, growth, and hiring for companies — and result in less consumer spending, which is generally bad for the economy.


Interesting

__Inflation is the Godzilla of finance...__ But we might not have to fear it just yet. Yesterday morning, Jerome Powell said the Fed is committed to its current policy of keeping interest rates low. He’s not immediately concerned about inflation levels, which have stayed relatively low for a decade — he *is* concerned about getting the economy back on its feet. JP's announcement helped calm inflation worries, so tech shares mostly rebounded for the day.


Falling tech stocks, rising interest rates, and inflation fears — how they’re connected

__Say it twice so it sounds cool...__ __[The RealReal](https://robinhood.com/stocks/REAL)__ is the online luxury consignment company that can smell a knockoff Birkin from a mile away. It verifies your fancy second-hand items, prices them, and sells them. But TRR isn't helping you pawn off those $900 Louboutins for free — it takes a big cut of the sale. Despite that...

- __TRR shares plunged 13%__ yesterday after it dropped disappointing quarterly earnings. Sales dipped 10% from 2019, and its quarterly loss more than *doubled*. 

__Now TRR is doubling down...__ on brick-and-mortar stores. The exodus from cities has slashed rent prices, making physical locations more profit-friendly. Last quarter, TRR launched an "innovative neighborhood store format" in Palo Alto, Newport Beach, and Brooklyn. The luxurious locations look like WeWorks merged with airline lounges. TRR is aiming to launch 10 by this summer. But why is an unprofitable, online-focused company splurging on fancy stores?


_The RealReal smells a fake Birkin_

Fashun

__Wear the trend, don’t let the trend wear you...__ With the rise of delivery-everything, it's easy to get sucked into pure ecommerce. But TRR knows its customers — and doesn’t think 100% online is their style. TRR is realizing that pairing digital with physical is better: Buyers who shop in stores *and* online spend 3X more compared to online-only shoppers. And consignors who step into stores bring in 1.5X more product value.
