__Could write a 7-volume series after this ends...__ *If it ever ends*. The TikTok ban saga has dramatically reversed course (again). In August, President Trump said he would ban TikTok unless an American company acquired its US operations by September 20th (aka: *yesterday*). The concern is that TikTok's Chinese-owned parent __Bytedance__ could pass American data to the Chinese government. 

- __A week ago:__ TikTok chose __[Oracle](https://robinhood.com/stocks/ORCL)__ over __[Microsoft](https://robinhood.com/stocks/MSFT)__ as its American [partner](https://snacks.robinhood.com/newsletters/46KUPDxFhDhy8dxhA7DfbJ/articles/6gEXoDknkeihOVzRVv6c4) (read: *not owner*). Trump wants an American company to *own* a majority of TikTok, so it was unclear whether he'd sign off. 
- __On Friday:__ Sounded like *no*. Trump said TikTok downloads and updates  would be banned starting yesterday. *Then*...
- __On Saturday: Trump approved the Oracle deal__, giving it his "[blessing](https://www.wsj.com/articles/trump-signs-off-on-deal-allowing-tiktok-to-continue-u-s-operations-11600551352?mod=hp_lead_pos1)." TikTok would partner with Oracle *and* __[Walmart](https://robinhood.com/stocks/WMT)__ to create a US-based company called “TikTok Global” (ironic).

__*Deep breaths*...__ The ban on US TikTok downloads will be delayed to September 27 — but it could be scrapped altogether if the partnership moves forward. Here's the deal:

- __Oracle would get a 12.5%__ in TikTok Global and would store its data on the Oracle cloud in the US.
- __Walmart would get a 7.5%__ stake and provide ecommerce and other online-shopping-related services.
- __Bytedance keeps 80%__ ownership. Buuuut: since US venture firms own 40% of Bytedance, TikTok Global would technically have majority American ownership.
- __The US gov would get__ 25K new US jobs at a TikTok HQ. Also: a potential TikTok Global IPO on an American stock exchange for even more US ownership.

_TikTok's new parents: Oracle, Walmart, and Bytedance investors (in that order)_

Dance

__TikTok Global would be the new TikTok...__ The TikTok we know and love/hate isn't allowed in China. China has Bytedance's Douyin, the non-international (censored) version of TikTok. The *international* TikTok is already banned in its largest market of India, and has faced scrutiny from Europe, Canada, and others. If this US-based TikTok Global is formed, they'll all probably get on it. 


TikTok's deal with Oracle & Walmart gets Trump's approval (ban averted, for now)

__*Is this the real life?*...__ Is this just fantasy (sports)? __[DraftKings](https://robinhood.com/stocks/DKNG)__  stock soared 32% last week, notching an all-time high on [news](https://www.barrons.com/articles/draftkings-stock-hits-record-deal-with-espn-internet-wagering-51600116751) of an ESPN deal. DraftKings' sportsbook and fantasy offerings will be integrated as links on ESPN's website. The sports betting app will also get promoted on ESPN studio shows and segments. The stock is up 52% this month as live sports roar back to life (minus fan-filled stadiums).

__No flake zone...__ Investors showed up big after __[Snowflake](https://robinhood.com/stocks/SNOW)__ went public last week. The adorably-named cloud data management company (not as cute) had the [biggest](https://snacks.robinhood.com/newsletters/20h2lIyDiEHNUxZmIBTfPu/articles/3sU0d3u3Bv3EujmS6dVQ7U) software IPO *ever*. Snowflake stock more than doubled in value on its 1st trading day. VIP institutional investors bought shares at the IPO price of $120. By the time Snowflake hit the market, it was trading at $245 — retail investors like us [missed out](https://snacks.robinhood.com/newsletters/20h2lIyDiEHNUxZmIBTfPu/articles/3sU0d3u3Bv3EujmS6dVQ7U) on the big jump.

Highs

Who's up...

__Reel in the nautical  puns...__ Shares of cruise operator __[Carnival](https://robinhood.com/stocks/CCL)__ sank 15% last week on a boatload of bad news (sorry). Carnival lost $2.9B last quarter and it literally only has 1 ship sailing right now. Oh, and it also just [announced](https://snacks.robinhood.com/newsletters/1Y9lIHuvuotRAaGBx13qHH/articles/v7L6xGxOXcxofymvA4szS) a $1B sale of new stock to raise money at the worst possible time — Carnival stock is down ~70% this year, so it's selling shares at a major low point. But it's losing $770M/month and only has $8B in cash left, so it's desperate.

__Try offering "flights to nowhere"...__ __[Delta](https://robinhood.com/stocks/DAL)__ 's cash runway doesn't look too good: it's losing ~$800M/month while domestic travel is down ~60% from last year. The government's $25B in airline bailout funds runs out on October 1st. Now Delta is mortgaging its frequent flyer program to raise cash. Last Monday, Delta [announced](https://snacks.robinhood.com/newsletters/46KUPDxFhDhy8dxhA7DfbJ/articles/HMsPMw3JtYyrYyTJ9PsO8) it would use its SkyMiles program as collateral to raise $6.5B in debt. On Thursday, it upped that to $9B. 


Lows

...and who's down

Dow Jones

S&P 500

Nasdaq

Bitcoin

🌎 The US ships "TikTok Global" 

__Investors didn't flake...__ on __[Snowflake](https://robinhood.com/stocks/SNOW)__'s IPO. The cloud company went public on the NYSE on Tuesday, trading under ticker “SNOW” (*cuutee*). The only thing cute about Snowflake is its name. The actual business is about offering cloud-based data management and analytics. 

- __Snowflake stock more than *doubled*__ on its 1st trading day, giving the company a massive $70B [market value](https://learn.robinhood.com/articles/GByCbiOluG2kcWs1AF6m5/what-is-market-capitalization/). 
- __Then the stock fell 10% yesterday.__ It's growing fast as revenues doubled from last year, but... it's still unprofitable.

__Snowflake = Ariana Grande?...__ Companies that do a traditional IPO (like Snowflake) hire investment banks like __[Goldman Sachs](https://robinhood.com/stocks/GS)__ to underwrite their new stock offering. Underwriters take on risk, decide the IPO value, and essentially act as talent managers for the stock star: they go on tour (aka: "roadshow") to build interest from institutional investors like mutual funds and brokerages. Those VIP investors are the ones who actually buy the stock "initially" during its Initial Public Offering.  

_Institutional investors watching their Snowflakes rise_

__Traditional IPOs have some downsides...__ Snowflake raised $3.4B in new money for itself by selling stock at its IPO price of $120. It was the biggest software IPO *ever*. Buuuut: *only VIP institutional investors got to buy shares at $120*. Then, they unleashed them on the market for the rest of us... 

- __Retail investors missed out__ on a big price jump. By the time Snowflake hit the market, it was trading at *$245* on pent-up demand.
- __Snowflake missed out__ on raising more money by selling at a higher stock price. After it sold stock for $120, Snowflake didn't benefit directly when the stock soared to $245.
- __Institutional investors doubled their money__ in a day. The IPO seems to have been under-priced, allowing them to sit back and watch their newly bought stock rise.
- __That's one reason private companies__ are increasingly looking at SPACs and Direct Listings as alternatives to the IPO status quo. 

Snowflake had the biggest software IPO ever, and it reveals a problem with IPOs

__Success is buying $3 glasses from a stand...__ and having everyone think they're  Ray-Bans. __[Facebook](https://robinhood.com/stocks/FB)__ disagrees, so it's [partnering](https://www.theverge.com/2020/9/16/21439929/facebook-ar-smart-glasses-ray-ban-announcement) with Italian glasses giant __Luxottica__ for its upcoming smart glasses. Luxottica makes fancy shades from luxury  brands like Persol, Prada, and Oliver Peoples. But Zuck is only interested in its Ray-Bans:

- __What to expect:__ "Smart" Ray-Ban [glasses](https://www.theverge.com/2020/9/16/21439929/facebook-ar-smart-glasses-ray-ban-announcement), ETA 2021. FB was super vague about what actually makes these glasses smart. We're expecting photo taking/uploading functionality. 
- __What not to expect:__ Augmented reality. The glasses don't have an integrated display — zero Pikachus will appear as you walk, and no 3D Insta model will pop up as you scroll your feed.

__Is Facebook throwing shade?...__ FB would love to be the one to finally make smart glasses a thing, since all its tech peers have so far failed so far. 

- __[Google](https://robinhood.com/stocks/GOOG)__'s "Google Glass" was an epic fail. They made people look like fake scientists without adding any daily value. 
- __[Snap](https://robinhood.com/stocks/SNAP)__ tried with  "Spectacles" (multiple times) and lost [$40M](https://www.theverge.com/2017/11/7/16620718/snapchat-spectacles-40-million-lost-failure-unsold-inventory) on 300K unsold pairs. 
- __[Apple](https://robinhood.com/stocks/AAPL)__ is working on Apple Glass, but we probably [won't](https://www.tomsguide.com/news/apple-glasses) see those until 2023. Apple's being super secretive (classic) about the details.


__Facebook thinks it can make this work by removing the "Facebook"...__ So far, Big Tech's smart glasses simply haven't provided much usable value. Facebook's differentiator: it's partnering with a well-loved sunglasses brand instead of designing the frames itself (like the other techies did). They're *branded* Ray-Ban glasses — not Facebook glasses. FB [thinks](https://www.essilorluxottica.com/sites/default/files/documents/2020-09/PR-EN-FB-EL-SmartGlasses.pdf) it can avoid its competitors' failure by making "the first truly fashionable smart glasses.”

Facebook teams up with Luxottica to ship Ray-Ban "smart glasses" in 2021

❄️ The Snowflake IPO problem

__Antiviral opening weekend...__ Not in a good way. Two blockbusters dropped this month and the turnout was... underwhelming. First came Warner Bros' much-hyped thriller "Tenet." __[AT&T](https://robinhood.com/stocks/T)__'s CEO  (AT&T owns Warner Bros) had bravely [insisted](https://www.theverge.com/2020/7/23/21335601/tenet-release-date-delay-streaming-theatrical-chrisopher-nolan-att-warner-bros) that Tenet would have a theatrical release. The Christopher Nolan mega-flick was delayed *three times* before dropping at US theaters on Labor Day Weekend. The result:

- __Budget:__ Tenet cost [$205M](https://variety.com/2020/film/box-office/tenet-box-office-christopher-nolan-warner-bros-1234768187/) to produce, *not* including marketing costs. It needs to reach ~$400M in sales to break even.
- __Earnings:__ Tenet made $9M during LDW. So far, it has made less than [$30M](https://www.theatlantic.com/culture/archive/2020/09/hollywoods-tenet-experiment-didnt-work/616345/) in the US and ~$200M globally — a far cry from making up its costs.

__Stream it?...__ __[Disney](https://robinhood.com/stocks/DIS)__ took a different approach with  blockbuster "Mulan." Instead of debuting in US theaters, Disney released Mulan on Disney+ for $30 — good call, since Mulan's global theatrical release was an epic fail. On top of the pandemic, Mulan got hit with a [boycott](https://www.reuters.com/article/us-film-mulan-china-exclusive/exclusive-china-bars-media-coverage-of-disneys-mulan-after-xinjiang-backlash-sources-idUSKBN2611FP). It has brought in just $38M from theaters but it cost Disney [~$300M](https://www.cnbc.com/2020/08/04/disneys-mulan-coming-to-disney-in-september-for-29point99.html#:~:text=Disney%20said%20that%20%E2%80%9CMulan%E2%80%9D%20will,been%20delayed%20since%20mid%2DMarch.). 

-  __Disney hasn't released the numbers,__ but [according](https://www.reuters.com/article/us-disney-mulan/disney-very-pleased-with-mulan-debut-ahead-of-china-opening-idUSKBN260341) to a report "Mulan" made $33M from Disney+ on opening weekend. For reference: record-breaking "Trolls" made $95M within three weeks of dropping on Apple TV.
- __One research firm is estimating that as many as 9M__ users [purchased](https://finance.yahoo.com/news/nearly-onethird-of-us-households-purchased-mulan-on-disney-for-30-fee-data-221410961.html) "Mulan," a $270M windfall for Mickey. But Disney has been tight-lipped, only [saying](https://finance.yahoo.com/news/nearly-onethird-of-us-households-purchased-mulan-on-disney-for-30-fee-data-221410961.html) that it was "very pleased."


_Not looking forward to meeting with the film investors_

Watch

__The world wasn't ready for theatrical releases...__ *yet*. Tenet and Mulan's theatrical flops have scared off studios. Now Warner Bros is delaying the “Wonder Woman 1984” theatrical release, and Disney is reportedly delaying the release of Marvel’s “Black Widow.” These films have mega-budgets, and it'll take a mega-turnout to turn a profit — that doesn't seem to be possible right now.


Mulan & Tenet: the 2 biggest pandemic movie theater releases basically failed

__Claaassic Amazon...__ __[Amazon](https://robinhood.com/stocks/AMZN)__ couldn’t fulfill its two-day delivery pledge earlier this year during the pandemic shipping surge.  Its solution: *take over the suburbs*.  The Zon has already hired 175K new workers during the pandemic. Now it's [reportedly](https://www.bloomberg.com/news/articles/2020-09-16/amazon-plans-to-put-1-000-warehouses-in-neighborhoods?sref=q3KSFp38) planning to open 1.5K small delivery hubs in cities and suburbs across the US. 

- __The Present:__ Amazon packages leave from warehouses in rural, non-city/suburb areas.
- __The Future:__ Amazon warehouses are next to your local coffee shop, your grocery store, and *inside* your mall.

__Out of the *many* things that Amazon is aggro about...__ it's most aggressive with delivery times. Amazon will deliver ~70% of its own packages this year from its own warehouses (sorry UPS).  Being closer to you means being able to deliver faster. That's more important than ever for Amazon: 

- __[Walmart](https://robinhood.com/stocks/WMT) and [Target](https://robinhood.com/stocks/TGT)__ are leveraging their thousands of stores as distribution centers for same-day delivery. Their constant proximity to you is their biggest strength over Amazon. 
- __Walmart__ just [launched](https://snacks.robinhood.com/newsletters/0zpHLW1IB8pix8YUTXac2/articles/NZ5JbEKhA5LoLo0zMmYw6/) its $98/year Prime competitor, aka Walmart+ — it includes free same-day delivery. 


Deliver

__This is the next phase of Amazon's domination...__ Besides Whole Foods,  some delivery vans, and annoying Alexa, you don't really *see* Amazon in your non-digital life. Instead of empty department stores in malls, we could be seeing Amazon warehouses soon. Amazon's digital empire will take a clearly visible form in our day-to-day lives.

Amazon expands its world domination plans to the suburbs 

__*Jordan Belfort has left the chat*...__ Wall Street OG __[Goldman Sachs](https://robinhood.com/stocks/GS)__ is known for investment banking and underwriting IPOs (all while smoking cigars in the Hamptons). Its clients are mostly companies, governments, and billionaires — *not* retail customers like us. But Goldman has been trying to get more consumer-y and #relatable: 

- __Marcus:__ Goldman's brand for regular people. The website launched in 2016 with savings accounts and loans. Goldman finally shipped an app in 2020.
- __Clarity Money:__ The personal finance app Goldman bought in 2018 for $100M. It helps you track your Trader Joe's sprees and subscription spend (so relatable).
- __Marcus Insights:__ The free financial management tool Goldman just [launched](https://www.cnbc.com/2020/09/14/goldman-sachs-is-taking-what-it-learned-from-a-100-million-acquisition-to-upgrade-the-marcus-app.html) in its Marcus app. You link your other bank accounts to get a full picture of your finances (yep, like Mint).

__*Lizzie McGuire has joined the chat*...__ For existing Marcus customers, the Insights tool is a value-add. Once Marcus makes it available to non-customers, it can use it as a growth strategy. Marcus [could](https://www.marcus.com/us/en/privacy-policy#whatinfo) also leverage the info it gains on your spending habits from linked accounts to target you with other products. Next up on its retail roadmap: checking accounts and investing.


Bank

__It's the "buy, learn, apply" acceleration strategy...__ Goldman could've built a tool like Clarity money itself, but *buying* it accelerated its roadmap to #relatability. Also: Goldman didn't want to build a whole product from the ground up without knowing if it would succeed. Now it's using its learnings from Clarity to launch insights in Marcus. 

Goldman tries to appeal to regular people with the "buy, learn, apply" strategy

 🍿 Mulan + Tenet = corona-flops

__You know things are bad when...__ *Business Insider* comes out with an [article](https://www.insider.com/buy-cruise-ship-sale-carnival-2020-9) titled: "You can buy a retired Carnival cruise ship and have it all to yourself." Since __[Carnival](https://robinhood.com/stocks/CCL)__ anchored a [record](https://snacks.robinhood.com/newsletters/5A4ZEajsQw0bmhsFuBK1AS/articles/2Y6SMuWwMgo4YaEpGG3FuK) $4.4B quarterly loss back in June, the tide hasn't turned much for the world's largest cruise company:

- __Carnival lost $2.9B last quarter__ and it literally only has 1 ship sailing right now (in Italy). Womp.  
- __Yesterday, Carnival announced a $1B stock sale__ to [raise](https://www.barrons.com/articles/carnival-shares-slump-as-cruise-operator-launches-1-billion-stock-sale-51600183845?mod=hp_minor_pos16) money at the worst possible time. Carnival shares sank 11% on the news. Womp womp.

__Endless shrimp cocktails never end well...__ Carnival's stock sale didn't either. But Carnival is desperate: it's [losing](https://fortune.com/2020/09/15/covid-carnival-cruises-q3-losses-coronavirus/) $770M a month and only has $8B in cash left. US cruises aren't expected to resume until the end of October (ambitious) and virus fears are still high. Desperate times call for desperate cash-raising measures:

- __Selling at a low:__ Carnival stock is down ~70% this year, so it's selling stock at a major low point. Compare that to Tesla, which is capitalizing on record high stock prices by [selling](https://techcrunch.com/2020/09/01/tesla-taps-market-rally-keg-announces-5b-stock-sale/) $5B worth of new shares.
- __Diluting:__ By issuing new shares, Carnival is [diluting](https://learn.robinhood.com/articles/5rlezLS4uMuf3cZTyEAo38/what-is-stock-dilution/) the value of its existing ones. Since more shares are being added, Carnival stockholders will own less of the overall company. 


_The one guy on Carnival's one (and only) cruise_

Sink

__Markets reacted rationally...__ They do that sometimes. Carnival is selling $1B worth of new stock, which represented ~7% of its market value before the announcement. The stock dropped 8% on Tuesday morning *after* the announcement — that's very close to the percentage Carnival got diluted by. In this case, investors' reaction made total sense.

Carnival is selling its own stock at the worst possible time (but it's desperate)

__No crowd, no turtleneck...__ __[Apple](https://robinhood.com/stocks/AAPL)__ unveiled a bunch of new hardware at its big product event yesterday. The TLDR: a new fancy iPad, a new basic iPad, and two new watches. On the software side, the iOS 14 iPhone [update](https://snacks.robinhood.com/newsletters/2iRXx4Lo0sb4Xj39ZUGriE/articles/45yG4eIyAVpA5q3uf5jddO/) drops today (so we can finally understand App Clips and reply to iMessages in threads). But the announcement that *really* interested us might have __[Peloton](https://robinhood.com/stocks/PTON)__ sweating: 

- __Apple Fitness+:__ A fitness subscription service for Apple Watch. The limit for the number of plus signs that can be added to subscription services unfortunately does not exist.
- __iPhone, iPad, or Apple TV:__ Where your Fitness+ workout will start. As you spin, dance, and stretch to your screen of choice, workouts sync with your watch for metrics tracking.
-  __$9.99/month:__  How much you'll fork out for unlimited on-demand workouts, from HIIT to yoga to rowing. Each week, Apple will serve up fresh classes with new *Apple* trainers.

__Club Apple is here...__ Yesterday, Apple also officially announced its "Apple One" services bundles — they'd been [rumored](https://snacks.robinhood.com/newsletters/2PiIiM79tS5nAC8sjkX4le/articles/D8y1BXXz9AmleE7kp6cnY/) since August. The $15/month tier bundles Apple: Music, TV+, Arcade, and iCloud storage. The $30/month tier has those, *plus* Apple News+ and Fitness+ (plus plus plus).


Unveil

__Apple wants you more connected than ever...__ Including Fitness+ in the bundle could be key to that, since Apple TV+, News+ and Arcade aren't exactly hits. For customers, bundles cost less than subscribing to each service individually. For Apple, bundling helps score more subscribers and *ensure that you're interacting with its products every waking hour*. The goal is that you never leave the Apple ecosystem. Apple anchored you with iPhone and Apple Watch — now it's leveling up its lifestyle control with services.


Apple's big unveiling event: Apple Fitness+, Apple One, and "Club Apple"

10-Yr US Treasury

🚢 Carnival sinks its own stock

__A TikToker and a database walk into a bar...__ The wait to see who TikTok’s US parent will be is over and it’s… anticlimactic. Yesterday, __[Oracle](https://robinhood.com/stocks/ORCL)__ confirmed it struck a deal with TikTok-owner __Bytedance__ to become a “trusted technology provider” (read: *not owner*). Oracle would reportedly be managing TikTok’s US data. The deal still needs approval from the US and China. Somehow, this endless saga only started *last month*.

- __#1:__ Trump says he'll ban TikTok on concerns that Americans' user data could be shared with the Chinese government. 
- __#2:__ Change of plans. The ban will happen *unless* an American company strikes a deal to acquire TikTok's US operations by September 20th.
- __#3:__ Oracle and a __[Microsoft](https://robinhood.com/stocks/MSFT)__-__[Walmart](https://robinhood.com/stocks/WMT)__ tagteam [emerge](https://snacks.robinhood.com/newsletters/2F3iI1nbMHbv4bvDR5gfaw/articles/2LMjKgW7k96k59D0CrdD35/) as the leading suitors.
- __#4:__ China throws a wrench into acquisition talks, saying it needs to approve the sale of TikTok and its algorithms.
- __#5:__ Microsoft gets rejected by TikTok. Oracle does "Say So" Doja Cat dance.

__Less of a parent...__ more of a guidance counselor. While Oracle will possibly get a stake in TikTok’s US assets, this isn't an acquisition. The "tech provider" role is vague, but it likely means TikTok will be moving its data to Oracle's cloud (and off  __[Google](https://robinhood.com/stocks/GOOGL)__'s, where it is today). Oracle could also get TikTok to use its marketing software for ads. TikTok is a big sexy catch of a customer, so Oracle stock jumped 4% on the news.   

Deal

__Is this a good deal for the US?...__ It certainly is for TikTok — the Tok gets to keep its 100M American users without giving up ownership of its business. But Trump has insisted the only way TikTok can avoid getting banned is a sale to a US company (this isn't that). Will Trump back off that demand? A few reasons he might:

- __Jobs:__ The US gets an American TikTok HQ with 20K employees. 
- __Popularity:__ Trump will avoid the wrath of American TikTokers ahead of the election.
- __Connections:__ Oracle's founder/Chairman/CTO Larry Ellison is pretty tight with Trump.


TikTok chooses Oracle as its American partner (sorry Microsoft)

__Introduce the problem...__ *then solve the problem*. After decades of pumping you full of caffeine and sugar, __[Pepsi](https://robinhood.com/stocks/PEP)__ wants to help you [chillax](https://robinhood.com/stocks/PEP). That's why it just [intro'd](https://www.fastcompany.com/90548696/pepsico-wants-to-help-the-caffeinated-masses-get-better-sleep-with-its-new-relaxation-drink) Driftwell, the ASMR of the canned drinks world: 

- __Driftwell (to sleep)__: The Millennially-packaged mini cans contain enhanced flat water with blackberry lavender (sounds pleasant, whatever that is). 
- __"Sip into relaxation":__ What Pepsi wants you to do. Driftwell's calorie- and sugar-free drink contains relaxing L-theanine (the star of green tea) and magnesium. 

__The problem/solution premium...__ The health shift we've seen in recent years means junkier foods/drinks have lost steam. Sugary sodas are being replaced with CBD-vegan-gluten free kombucha. Pepsi's "problem" drinks are waning, but now it can make *double* the $$$ by offering "solution" drinks, too. And these premium drinks command premium prices:  

- __$4:__ Price of a minican 10-pack of Pepsi — then you need Driftwell to sleep. 
- __$18:__ Price of a minican 10-pack of Driftwell — *then grab a Pepsi to wake you*.

_This guy needs a Driftwell_

__"Functional drinks" are 2020's big bev trend...__ These provide more than just sugar/alcohol/caffeine — they feature 1 ingredient with purported health benefits. __[Coke](https://robinhood.com/stocks/KO)__ launched Coke Energy with B vitamins and guarana. __[ABInbev](https://robinhood.com/stocks/BUD)__'s Bud launched hard green tea and coconut water. __[DrPepper](https://robinhood.com/stocks/KDP)__ invested in "smart energy" drink Adrenaline Shoc (sounds healthy). Sales of functional bevs came in at nearly $32B in 2019, up [7%](https://www.kten.com/story/42628168/pepsico-is-launching-a-drink-to-get-a-piece-of-the-1-billion-sleep-aid-industry) from 2018. We can expect to see growth accelerate during an anxiety-inducing health crisis. 


Pepsi wants to put you to sleep  as it drifts into "functional bevs"

__The cash runway doesn't look good...__ Pun 100% intended. __[Delta](https://robinhood.com/stocks/DAL)__, like other airlines, is strapped for cash. Domestic travel is down ~60% from last year and daily costs are still sky-high (Delta's [losing](https://www.wsj.com/articles/delta-to-use-frequent-flier-program-to-raise-6-5-billion-11600082314?mod=hp_lead_pos4) $27M/day). The government's $25B in airline bailout funds runs out on October 1st, and mass layoffs are expected. As a cherry on top of the cash-crunched sundae, US airlines just permanently [scrapped](https://snacks.robinhood.com/newsletters/7o4Om1Hzq8GXG0zovTZVwd/articles/2lN1BN3aZ8PX3uFiW5SxJA/) their $200 change fees for domestic flights. Sooo...

- __Delta will use its SkyMiles program to raise $6.5B__. It's using the frequent flyer program as collateral to borrow the money (basically, mortgaging your miles).
- __If Delta can't pay back the $6.5B loan,__ it won't get its planes taken away. Instead, the lenders will get to keep the $$$ Delta makes from lucrative SkyMiles sales.

__Please explane...__  Airlines earn money from frequent-flier programs by selling miles to banks and retailers that award them to customers. __[American Express](https://robinhood.com/stocks/AXP)__ is able to drop you those sweet travel rewards points since it *bought* them en masse from airlines. And each time you swipe your Delta co-branded card, Delta gets a little money from AmEx.


__Delta is a credit card company now (more than ever)...__ Few things drive loyalty like the metallic traveler status. In 2019, $4B in sales from Amex made up 8% of Delta's revenue. Delta expects annual AmEx sales to hit $7B by 2023. Delta is also AmEx’s largest co-branded account, making up 20% of AmEx balances worldwide. Delta’s passenger sales fell 60% in the 1st half of 2020 — But sales to American Express [dropped](https://www.wsj.com/articles/delta-to-use-frequent-flier-program-to-raise-6-5-billion-11600082314?mod=hp_lead_pos4) just *less than 5%*. With its passenger biz decimated, Delta's leaning into cards more than ever. 

Delta mortgages its SkyMiles program to raise $6.5B 

🎵 TikTok chooses Oracle (as chaperone) 

__Good things come in (phase) threes?...__ TBD. Out of the [170](https://www.wsj.com/articles/covid-19-vaccines-whats-coming-and-when-11598882964) Covid-19 vaccines in development, 35 have been approved for clinical human trials. *Out of those*, only 9 have advanced into the final phase of trials (aka Phase 3). Now the drugmakers are aiming to seek regulatory approval or emergency-use authorization *as soon as October*. Three of the Phase 3 front-runners:

 - __[AstraZeneca](https://robinhood.com/stocks/AZN)__: Is aiming to wrap up Phase 3  next month. It just [resumed](https://www.cnbc.com/2020/09/12/astrazeneca-coronavirus-vaccine-clinical-trials-resume-in-uk-after-pause-over-safety-concerns.html) trials after briefly pausing due to an illness in a volunteer (apparently unrelated). 
 -  __[Pfizer](https://robinhood.com/stocks/PFE):__ If its vaccine with __BioNTech__ proves safe, it would be the 1st [mRNA](https://snacks.robinhood.com/newsletters/2yiQjAPUMFj1LAGzjjtiR0/articles/5QsTxDVI2hgwiGCa3QkB6p) vaccine ever approved (unless Moderna gets there first).
 - __[Moderna](https://robinhood.com/stocks/MRNA)__: Its final stage trial could yield interim results in the fall. 

__The stakes...__ need little explanation. A vaccine is critical to stopping this world-shattering pandemic that has killed ~[920K](https://coronavirus.jhu.edu/map.html) people. And it all hinges on Phase 3 results. These large-scale trials (usually 30K people) test whether the dose that would be given to the public is safe. BTW: Russia's vaccine [skipped](https://www.nytimes.com/2020/08/11/health/russia-covid-19-vaccine-safety.html) this final stage.

- __While Phase 3 could go on for a while,__ positive mid-trial results could be enough for a vaccine to start getting approval for mass production and distribution in October.
- __Vaccines usually take 6-10 years__ from development to approval. The US has invested over $10B in "Operation Warp Speed" to make that happen in less than a year.


__Approval isn't the final challenge...__ Getting a high enough percentage of the population safely vaccinated is key. But in a Gallup poll last month, [35%](https://news.gallup.com/poll/317018/one-three-americans-not-covid-vaccine.aspx) of Americans said they wouldn't take an FDA-approved COVID vaccine, even if it was free. To boost public trust in the safety of  COVID vaccines, 9 drugmakers just [pledged](https://www.cnbc.com/2020/09/08/nine-biopharma-ceos-pledge-to-make-safety-the-main-focus-in-coronavirus-vaccine-development.html) to "uphold the integrity of the scientific process" during development. After FDA approval, trust will be critical.


Phase 3 Trial season is here: the final lap of the Covid-19 vaccine race

__When Soul Cycle goes dark...__ __[Peloton](https://robinhood.com/stocks/PTON)__'s sales surged [172%](https://www.cnbc.com/2020/09/10/peloton-pton-reports-fiscal-.html) and it snagged a quarterly profit (must've been a Beyoncé workout). As wealthy consumers scrambled to bring a piece of Equinox into their homes, Peloton's $2K spin bikes and $4K treadmills sprinted out of factories. Also: the average number of workouts per month more than doubled. Peloton doesn't expect to return to normal delivery times any time soon — it's expecting even bigger sales growth this quarter.

__Hollister's sportier cousin...__ Remember __[American Eagle](https://robinhood.com/stocks/AEO)__? We're guessing "no" — your forgotten middle-school mall favorite saw sales fall 26% last quarter. But AE's teen-centric loungewear brand Aerie had a 32% sales *jump* as hoodies and bralettes flew off virtual shelves. Digital sales doubled for Aerie thanks to in-app shopping (websites are sooo 2019). Until COVID hit, Aerie had 21 straight quarters of double-digit sales growth. AE stock soared 8% last week as Aerie returned to double-digit growth after a quarter off.

__*Electrifying week*...__ __[Nikola](https://robinhood.com/stocks/NKLA)__ shares soared 40% on Tuesday after __[GM](https://robinhood.com/stocks/GM)__ [announced](https://snacks.robinhood.com/newsletters/7FZzguUiD8aLKkREx4vy4F/articles/7CfZXV2CbwDk29abnMj5hQ/) it's investing $2B for an 11% stake in the  e-truck maker. Experienced GM will be producing young Nikola's electric trucks. Nikola's valuation soared to $19B (despite it never having actually sold a vehicle). *Then* on Thursday, Nikola's valuation plunged to $12B after a short selling research firm [accused](https://www.cnbc.com/2020/09/11/nikola-dismisses-short-seller-allegations-calling-them-a-hit-job.html) it of fraud. Nikola called it a “hit job” and is considering suing.

__(Insert anxiety-inducing notification sound)...__  __[Slack](https://robinhood.com/stocks/WORK)__'s quarterly sales jumped 49% —  about the same *as the previous two quarters*. That's yawn-worthy compared to fellow WFH'er __[Zoom](https://robinhood.com/stocks/ZM)__, which 4X'd sales and *33X'd* profit. Slack's steep learning curve might be stunting growth: newbies have to learn channels, bots, threads, and when not to message in #General (assume *never*). Now Slack's stock has fallen back to pre-pandemic levels after plunging 17% last week.


_AstraZeneca, Moderna, and Pfizer in the final lap_

💉 Covid-19 vaccine: the final phase 

__Clear eyes, full hearts...__ can’t lose when you’re the official *anything* of the National Football League. ICYMI: last night, the NFL brought back football (the least socially distant of all sports). ICYM the score: __Postmates__ won the marketing game. 

- __Postmates is now the [1st](https://techcrunch.com/2020/09/09/postmates-nfl/) official on-demand delivery partner of the NFL__. Great title to stick on the fridge for its parent __[Uber](https://robinhood.com/stocks/UBER)__, which announced it's [snatching up](https://snacks.robinhood.com/newsletters/q4J6y6mMs3jtkXwdTmJlG/articles/4C8Nmudmpz9QsUYbnLD5Hr/) Postmates for $2.6B in July.
- __The multiyear partnership also makes Postmates a Super Bowl sponsor.__ Just wait for the Chipotle Super Brown Rice Bowl and Tuna Poke Super Bowl commercials to roll in. 

__"Postmated" is basically LA slang...__ So far, Postmates has been the smallest fish in the Delivery Wars pond. Before it got acquired by Uber, it had just 8% of the US market share for delivery (mostly in LA). Don __DoorDash__ dominates the [mafia-style](https://snacks.robinhood.com/newsletters/5H4bzJb2lCpsjW7HA5Czc3/articles/APpX6NGeIEYFrIq5NYcoA/) food delivery wars with a 40%+ share, followed by __[Uber](https://robinhood.com/stocks/UBER)__ and __[Grubhub](https://robinhood.com/stocks/GRUB)__. But Uber/Postmates has a winning marketing strategy:

- __Play #1:__ People will mostly be staying home to watch games — no sweaty crowded bars and beer-drenched tables. *Perfect time for a food delivery partnership with the NFL*. 
- __Play #2:__ America is united in its love of football (at least there's one thing). This NFL sponsorship could be the perfect way for CA-based Postmates to win nation-wide love.


_Clear eyes, full stomachs, can't lose_

Kickoff

__The NFL powers an entire economic ecosystem...__ Postmates is the official delivery partner of the NFL, but the NFL is the unofficial cash cow of American marketing. That's because [43](https://profootballtalk.nbcsports.com/2020/01/08/nfl-games-were-41-of-the-50-most-watched-tv-broadcasts-of-2019/?) of the top 50 most-watched TV broadcasts last year were football games. The NFL is the blue whale that the whole ecosystem feeds off of. In turn, the fishes feed the NFL with big cash money for extra high-exposure partnerships and $12M commercials. 

Postmates becomes the official on-demand delivery partner of the NFL

__Hit 'em with the cloud couch...__ __[Restoration Hardware](https://robinhood.com/stocks/RH)__ is the upscale home-furnishing company whose stores look like WeWork and the Palace of Versailles had a baby (on steroids). RH prefaced its earnings with an inspiring [quote](http://ir.rh.com/static-files/b256fab3-d79a-4afb-a9d0-86a6e858e339) from Emerson. We're certain that the Transcendental, nature-adoring poet would love to see his words on the financial report of a company that sells $5K couches.

- __RH sales just barely grew__ compared to the same quarter last year, buuut...
- __Profit jumped over 50%.__ RH got to keep more $$$ from each $10K table it sold by raising prices. It [expects](https://www.cnbc.com/2020/09/10/stock-market-today-live.html) to have an even higher [profit margin](https://learn.robinhood.com/articles/2jlpKewku8iEaalz6xrKna/what-is-profit-margin/#:~:text=%F0%9F%A4%94%20Understanding%20profit%20margin&text=A%20profit%20margin%20is%20one,the%20end%20of%20the%20day.&text=This%20is%20calculated%20by%20taking,dividing%20that%20by%20total%20revenue.) next quarter. 

__Luxury still pays off...__ RH stock jumped 20% on the strong report coupled with an analyst [upgrade](https://www.barrons.com/articles/restoration-hardware-stock-pops-after-strong-earnings-upgrade-51599742840). __[Home Depot](https://robinhood.com/stocks/HD)__ had its [best](https://snacks.robinhood.com/newsletters/7MJGXTV2lqwkCcYoPsYqjJ/articles/2cQ8fFsL0GgNwOwWRIFmEA) quarter in 20 years thanks to the pandemic "House Hype." But non-affordable brands are thriving, too: 

- __Despite having sky-high prices__ during a time of economic turmoil, RH is still winning. Wealthy consumers are splurging to give their homes a (pricey) pandemic upgrade. 
- __Well said:__“The high-income consumer is healthy and is investing in their homes” — Cristina Fernández, the analyst who upgraded RH stock. 


Furnish

__The corona-conomy has Fancy Flyers...__ There's a class of expensive/luxury brands like RH that is thriving during the pandemic. These companies are seeing increased demand from wealthier consumers looking to adapt to the stay-at-home life. 

- __[Lululemon](https://robinhood.com/stocks/LULU)__'s online sales [soared](https://snacks.robinhood.com/newsletters/7FZzguUiD8aLKkREx4vy4F/articles/26yFoNKojWP5qIVWabOU6Q) 157% and its stock is up ~40% this year.
- __[Peloton](https://robinhood.com/stocks/PTON)__ just [reported](https://www.cnbc.com/2020/09/10/peloton-pton-reports-fiscal-.html) an expectation-crushing 172% sales surge. The stock is up ~200% this year.
- __[Apple](https://robinhood.com/stocks/AAPL)__ had its best [2nd](https://snacks.robinhood.com/newsletters/vPYyhZjwPeLib6Fug0rQx/articles/1ZCH362yffyTmdyQ6sXP1y/) quarter ever and became the most valuable company *on earth* this year.


Restoration Hardware is the comfiest member of corona-conomy's Fancy Flyers

🏈  Postmates wins NFL marketing 

__Call the caterers and florists...__ Breakfast at Tiffany's is canceled, along with the whole wedding. French luxury giant __LVMH__ just [called off](https://www.cnbc.com/2020/09/09/lvmh-scraps-16point2-billion-deal-with-tiffany.html) its $16.2B deal to acquire jewelry legend __[Tiffany](https://robinhood.com/stocks/TIF)__. LVMH owns 75 luxie-luxe brands, including Louis Vuitton, Dom Pérignon, Dior, and Fenty. The wedding would've been the biggest *ever* for the luxury industry.

- __Almost a year ago,__ LVMH asked for Tiffany's hand. They signed engagement papers for a merger that was to happen no later than Nov. 24, 2020.
- __Then,__ French Foreign Minister Jean-Yves Le Drian (classic) [asked](https://www.reuters.com/article/us-tiffany-m-a-lvmh-france-exclusive/exclusive-french-government-request-that-lvmh-delay-tiffany-deal-was-only-advice-idUSKBN2602U4) LVMH to delay the ceremony to  Jan. 6, citing the threat of extra US tariffs. 
- __*Yesterday,*__ LVMH used Drian's letter to tell Tiffany: "The deal cannot happen. We are prohibited from closing the deal." France says the request was just *advice* (awk). Now Tiffany is suing.

__*Très dramatique breakup...*__ to be expected when $16B is on the line. The US has threatened tariffs on luxury French goods in retaliation for France’s taxes on big American tech companies. LVMH is using the possible hit to its sales from tariffs to justify dropping the pricey deal. If LVMH's breakup goes through, Tiffany will have to hop back on the luxury dating apps (Tinder Platinum Gold?).


_When you find out that breakfast is canceled_

Bling

 __This isn’t about tariffs - it’s about overpaying...__ LVMH couldn't have asked for better timing for the letter. It doesn't want to spend $16B on a corona-battered company: Tiffany’s global sales plunged  [29%](https://news.trust.org/item/20200909193300-muu1y/) from April to July and *45%* the previous quarter. Consumers weren't shopping in key luxury markets, while fewer weddings meant fewer $20K engagement rings. LVMH CEO Bernard Arnault had [said](https://www.nytimes.com/2020/09/09/business/lvmh-tiffany-deal-lawsuit.html) Tiffany would “thrive for centuries to come” as part of his company. "Til Death Do Us Part" isn't panning out.


LVMH cancels its $16B wedding with Tiffany, conveniently blaming tariffs

__Changing status to "Snoozing"...__ __[Slack](https://robinhood.com/stocks/WORK)__ reported expectations-beating [earnings](https://investor.slackhq.com/news/news-details/2020/Slack-Announces-Second-Quarter-Fiscal-Year-2021-Results/default.aspx), but investors yawned at the results. Slack's quarterly sales growth came in at 49% — just about *the same as the previous two quarters*. Investors think it's slacking on growth, so they plunged the stock 14% Wednesday.

__The difference between a #channel and a DM...__ is almost as big as the difference between Slack and __[Zoom](https://robinhood.com/stocks/ZM)__'s pandemic growth. Zoom's sales more than [quadrupled](https://snacks.robinhood.com/newsletters/0zpHLW1IB8pix8YUTXac2/articles/4IExzn16n03xk7jw6WX7V9) compared to the same quarter last year and quarterly profit soared *3,300%*. They're both WFH winners, so why is Zoom crushing it? Slack has:

- __A longer buying process:__ Companies that want to switch to Slack are going through the whole buying/negotiation/pricing [process](https://slack.com/help/articles/115004378828-Onboard-your-company-to-Slack-) with salespeople. Zoom is more plug-and-play — just figure out how to unmute and choose a tropical background.
- __A steeper learning curve:__ Employees have to learn about channels, pings, bots, DMs, threads, GIFs, emojis, and Slack etiquette. After 2 months Bill is still asking about VPN issues in the #General channel, and Cheryl still *never responds in the thread*.
- __TLDR:__ Adding Zoom is like buying a new freezer — adding Slack is like remodeling the whole kitchen. 


_Slack gets snubbed in the WFH Olympics_

Ping

__Slack is the corona-conomy winner that wasn’t...__ Because of the WFH shift, everyone was expecting Slack to be a major pandemic success story. The stock soared 135% from mid-March to June — now it's back at March levels. Investors corrected for the "expectation vs. reality" disconnect, bringing the stock back to basically pre-pandemic levels.

Slack stock tanks because no one is impressed with its growth

__Forget TP and baking yeast...__ The most in-demand pandemic necessity is a Chromebook. Chromebooks, for the Mac-centric among us, are low-cost laptops that use __[Google](https://robinhood.com/stocks/GOOG)__'s Chrome operating system and apps. The ~$300 laptops are made by computer OGs like __[HP](https://robinhood.com/stocks/HPQ)__ and __Lenovo__. Now that students are schooling from home, Chromebooks are quickly becoming the unofficial laptop of COVID. 

- __5 months:__ How long some people are waiting to receive Chromebooks, according to a [report](https://www.theinformation.com/articles/chromebooks-gain-share-of-education-market-despite-shortages?utm_content=article-4825&utm_campaign=article_email&utm_source=sg&utm_medium=email) from *The Information*.
- __+242%:__ __Best Buy__'s sales nearly [3X'd](https://snacks.robinhood.com/newsletters/6DfXt5MiwPMbXytOtKgMOz/articles/26tJTqArWaa7oZ02abcMQk) last quarter, partly thanks to the fact that Chromebooks were constantly flying off the virtual shelves (still sold out).

__Don't judge a Chromebook by its cover...__ While Apple's sleek MacBooks get a lot of the limelight, Chromebooks are winning in terms of volume. From May to June:

- __Chromebooks made up nearly 10%__ of all computers shipped globally — that's a 2 percentage-point bump from the same quarter a year ago. 
- __Apple’s Mac OS laptops made up just 7%__. Microsoft's Windows OS still dominated with an 83% share of shipments.


Type

__Google's getting them young(er)...__ 69% of all computers bought by K-12 schools last quarter were Chromebooks. The low price tag, coupled with Google's free offering of G Suite products like Google Classroom to schools, makes them the most attractive options. Kids are getting familiarized at an early age with Google's apps and ecosystem. By the time they hit the workforce, they probably won't know what an Excel spreadsheet is. 


The next generation runs on Google thanks to Chromebooks

💍  Breakfast at Tiffany's: Canceled

__*Release the breath*...__  Despite all evidence to the contrary, __[Lululemon](https://robinhood.com/stocks/LULU)__ *doesn't* need Soul Cycle to sell workout clothes. Spin studios and Equinoxes were closed last quarter (Lulu's worst nightmare). But the legging legend's sales surprisingly *grew* [2%](https://investor.lululemon.com/news-releases/news-release-details/lululemon-athletica-inc-announces-second-quarter-fiscal-2020-0), even though in-store sales fell. Instead of crying over germ-avoidant shoppers, Lulu made Lululemonade with ecommerce:

- __Online sales soared 157%__ as you ordered $90 leggings and yoga tanks for that at-home pilates workout (electric blue looks great over Zoom). 
- __61% of Lulu's total sales came from online,__ compared to just 25% during the same quarter *last* year. Lulu is officially a mostly-ecommerce company.

__Luck happens when preparation meets opportunity...__ Before the pandemic, Lulu had already put in the work to flex its ecommerce muscle. 

- __Preparation:__ Online sales [already](https://snacks.robinhood.com/newsletters/5f9CgQ6e0OASVb4XOS2NoL/articles/75PhTygJY5kWlZIfo4Mafu) made up 33% of Lulu's total sales *before* lockdowns, making it well-positioned for a shift to full ecommerce. 
- __Luck:__ The stay-at-home life mainly consists of chilling, working, and exercising — all things that can be done in Lulu's athleisure wear.

"_So glad we drunk-ordered Lululemon last night_"

Stretch

__Lulu doesn't need 400+ stores anymore...__ It just proved it can grow as a direct-to-consumer company.  Lulu's in-store sales plunged 51% last quarter, even as stores reopened. But *online* sales were strong enough to overpower those losses and deliver overall sales growth. Although Lulu is committed to continue opening new physical stores, it doesn't need them to make it into your closet. Its recent [acquisition](https://snacks.robinhood.com/newsletters/q4J6y6mMs3jtkXwdTmJlG/articles/3H03bXAENNJQMZaqbIocvY) of at-home fitness company __Mirror__ could hit closer to home (literally).

Lululemon becomes an ecommerce company as online sales take over

__Didn't see this hookup coming...__ 111-year-old __[GM](https://robinhood.com/stocks/GM)__ is [investing](https://www.cnbc.com/2020/09/08/general-motors-takes-11percent-stake-and-2-billion-in-equity-in-electric-truck-maker-nikola-.html) big in e-truck maker __[Nikola](https://robinhood.com/stocks/NKLA)__. Nikola is a six-year-old hydrogen-fueled electric truck startup that *plans* to sell electric trucks (products delivered so far = 0). Since its IPO in June, the biggest news to come out of Nikola was that it started taking preorders for its 2022 Badger electric pickup. The biggest news now:

- __GM is dropping $2B for an 11% stake in Nikola.__ The investment isn't only financial — GM will actually be *producing* Nikola's trucks.
- __Nikola stock soared 40%__. GM stock popped 8%. Nikola is now worth nearly half as much as GM, despite never having delivered a profit (or a vehicle).

__Who got the short end of the gear stick?...__ At first, it seems like GM did. Not only is Nikola getting a $2B investment — it's also getting one of the world's most seasoned carmakers to crank out vehicles for it. Since Nikola went public, investors have been wondering whether it can actually deliver on the hype. With GM riding shotgun, they're feeling relieved. What does GM get?

- __A "hot" high-potential growth investment__ for its old low-growth company. Excitement for GM ended at the Chevy Corvette.
- __A sexy way to deploy__ *its own* e-battery and fuel cell systems. GM will be the exclusive fuel cell supplier for Nikola’s upcoming semi trucks.


Electrify

__The fastest way to scale is letting *someone else* do it for you...__ Designing a cool car is hard — manufacturing it at scale is way harder. GM brings the manufacturing expertise that young Nikola lacks. __[Tesla](https://robinhood.com/stocks/TSLA)__ scaled on its own, but took 16 years to produce a respectable 100K cars/quarter and *17 years* to [deliver](https://snacks.robinhood.com/newsletters/6511HaDUMXpAxjp2bEBL6w/articles/30QY0VGpvgwP9J9BKSTkLB) a full-year profit. Instead of building its own assembly lines and battery factories, Nikola can use GM's to scale faster and more cheaply.


Nikola stock soars 40% after GM makes a massive investment in its e-trucks

🧘‍♀️ Lululemon's big digital flex

__BRB, deleting Venmo...__ The US is *kind of* like that person who racked up more in Venmo requests than they can pay. US debt has been growing for decades, but it skyrocketed in the corona-conomy. From April-June, America's debt became *larger* than the size of its economy on a quarterly basis. Last week...

- __US debt reached its highest level__ relative to the size of the economy since WWII. Next fiscal year, debt is [projected](https://www.wsj.com/articles/u-s-debt-is-set-to-exceed-size-of-the-economy-for-year-a-first-since-world-war-ii-11599051137) to be bigger than the US' GDP *for the full year* — a 1st since 1946. 
- __GDP:__ [That's](https://learn.robinhood.com/articles/29d9WQgPq119raQYS1Wm6H/what-is-gross-domestic-product-gdp/#:~:text=Robinhood%20Learn,a%20set%20period%20of%20time.) the total value of all goods and services produced by a country over a period of time (usually a year). 
- __$27 trillion:__ That's America's [national debt](https://www.wsj.com/graphics/us-national-debt-visualized/). It's [~10X](https://www.wsj.com/graphics/us-national-debt-visualized/) the size of every African country's GDP *combined* and it's $82K per American.

__One shrinks, one explodes...__ The US GDP shrank at a record rate last quarter as consumer spending and manufacturing declined. Instead of that $5 Starbucks latte, you made WFH iced coffee. Meanwhile, debt ballooned:

- __Government spending spiked__ an extra [$3T](https://www.washingtonpost.com/us-policy/2020/08/07/congress-coronavirus-stimulus-trump/) this year on corona-related rescue programs. Think: $1.2K stimulus checks, enhanced unemployment, and loans to businesses.  
- __But government revenues fell__ 10% this spring compared to 2019. As corporate profits disappeared and millions [lost](https://snacks.robinhood.com/newsletters/6L8oUYD63XWJRiPR4Z6Ksd/articles/1JOaxMxJMDwJYr7IbGzC9r/) their jobs, way less payroll and income tax $$$ flowed to the government. 
- __More gov't spending + less gov't income = bigger deficit:__ The federal budget deficit is expected to hit __$3.3T this year__, more than [triple](https://www.cnbc.com/2020/09/02/budget-deficit-to-hit-record-3point3-trillion-due-to-virus-recession.html) 2019's deficit and the biggest mismatch between income & spending ever.


__Tomorrow's generations will have to repay today's debts...__ The bigger the debt, the more the US has to pay back — *with interest*. Right now, the  US ([counterintuitively](https://apnews.com/2e22a5f94e414f65429d9f91b7525c49#:~:text=Next%20year%2C%20the%20federal%20debt,the%20first%20time%20since%201946.&text=That%20amounts%20to%2016%25%20of,broadest%20measure%20of%20economic%20output)) enjoys record low interest on government debt despite the massive IOU. But in the long term, higher interest rates on debt could force the US government to cut spending on services like healthcare, education, and defense — and/or raise taxes. Big spending is necessary right now to prop up the economy, but it's trouble for future generations.


US debt will exceed the size of the economy for the 1st time since WWII

__Abnormally Happy Hour...__  __[Zoom](https://robinhood.com/stocks/ZM)__'s profit soared *3,300%* last quarter compared to the same time last year. In 3 months, the video conferencing icon made double the money that it made last year. Zoom's sales more than quadrupled to $663M and it significantly raised its full-year forecast, so investors sent the stock zooming up 40%. Zoom is growing [abnormally](https://snacks.robinhood.com/newsletters/0zpHLW1IB8pix8YUTXac2/) fast for a public, relatively mature company (even compared to other corona-conomy winners).

__Trying to sneak the Red Vines in...__ __[AMC](https://robinhood.com/stocks/AMC)__ shares soared 15% on  Friday after America's largest movie theater chain [said](https://www.cnbc.com/2020/09/02/amc-shares-rise-as-70percent-of-theaters-will-be-open-this-weekend.html) 70% of its US theaters would be open on Labor Day weekend. Chris Nolan's much-hyped thriller "Tenet" also dropped on Friday, kicking off US theaters' 1st big weekend since March and bringing in [$20M](https://variety.com/2020/film/news/tenet-box-office-opening-weekend-christopher-nolan-1234759699/). In June, AMC said it was "generating effectively no revenue" (niiice)  and doubted it could remain in business much longer. Since then, AMC stock has soared 70% on the reopening hype.


__Elon gets rejected from the club...__ __[Tesla](https://robinhood.com/stocks/TSLA)__ stock [plunged](https://www.cnbc.com/2020/09/04/tesla-falls-after-sp-500-adds-etsy-and-two-others-bypassing-carmaker.html) 7% Friday on news  that the [S&P 500](https://learn.robinhood.com/articles/7kFFEUv46vmMCmMfLuNiRX/what-is-the-s-and-p-500/#:~:text=The%20S%26P%20500%20is%20like,millions%20of%20stock%20market%20activities.) added __[Etsy](https://robinhood.com/stocks/ETSY)__ to the famous index, but *not* the e-car maker. Tesla became eligible for an S&P 500 Club invite in July after [posting](https://snacks.robinhood.com/newsletters/6511HaDUMXpAxjp2bEBL6w/articles/30QY0VGpvgwP9J9BKSTkLB) 4 straight profitable quarters. If Tesla *did* get in, funds that track the S&P would need to buy over [120M](https://www.cnbc.com/2020/09/04/tesla-falls-after-sp-500-adds-etsy-and-two-others-bypassing-carmaker.html) Tesla shares, likely driving up the stock price. Turns out Elon hasn't made it past the S&P bouncer yet. 

__Throwing profit puppies out the emergency exit...__ *Desperate move.* __[United](https://robinhood.com/stocks/UAL)__ said it's permanently [dropping](https://snacks.robinhood.com/newsletters/7o4Om1Hzq8GXG0zovTZVwd/articles/2lN1BN3aZ8PX3uFiW5SxJA/) its $200 change fee for domestic flights. __[Delta](https://robinhood.com/stocks/DAL)__ and __[American](https://robinhood.com/stocks/AAL)__ predictably followed suit. Profitable add-ons like change fees have 5X'd over the past decade and made up 15% of US airlines' sales last year. Buuuut: travel is still down ~60% from 2019 and airline bailout money runs out in October. Between pandemics, hurricanes, and fires, booking a flight with a $200 change fee is... *risky*. Airlines hope that killing those fees will boost sales.