__Less CBD lotions on your Insta feed...__ Something we can all get behind. And it might happen now that __[Facebook](https://robinhood.com/stocks/FB)__-owned Instagram is [adopting](https://www.cnbc.com/2020/05/27/instagram-ads-coming-to-igtv-with-revenue-sharing-for-influencers.html) YouTube's money-maker strategy: ad revenue sharing with content creators. It starts with IGTV, the one Instagram feature that you (probably) never use:

- __IGTV:__ Instagram launched the video app back in 2018 to compete with YouTube. You can use it separately, or directly through the Insta app to watch/upload up to 1 hour of video.
- __Insta will start running ads on IGTV,__ then give creators a 55% cut of revenue from their vids (__[Google](https://robinhood.com/stocks/GOOGL)__ has the same split for YouTube creators — #Zucked).

__This is a first...__ In 2019, Instagram made $20B on the ads it placed in your feed and between friends' stories — that accounted for 25% of Facebook's total revenue. But Instagram has never shared ad revenue with creators before (even though creators drive usage):

- __"Influencer marketing"__ is the main way creators can monetize their Insta followings — eg: "casually" posing with a tub of protein powder or an oversized watch in the Maldives.
- __"Revenue sharing"__ on IGTV gives influencers a 2nd (and possibly much larger) money-making stream for their personal brands.


Instagram: "_Beautiful day in Ibiza... also link in bio for this CBD wine_"

Stream

__It's all about the user-generated content...__ Creators follow the ad bucks. By intro'ing revenue-sharing, Instagram may woo more famous creators onto IGTV. More popular creators = more popular content = more users = more ad money for Facebook. If Instagram's 1B+ users start tuning into IGTV to see their favorite YouTuber, Alphabet (YouTube's owner) is in a Zuck load of trouble. 

Instagram will share ad revenue with influencers for the first time ever

__Bringing sex apeel to food waste solutions...__ __Apeel Sciences__ is like an anti-aging cream, but for your avocados. And it just [hit](https://techcrunch.com/2020/05/26/preventing-food-waste-nets-apeel-250-million-from-singapores-government-oprah-and-katy-perry/) a $1B+ valuation after raising $250M from investors like Oprah, Singapore's government, and Katy Perry (waiting for the invite to the investor conference);

- __Today, 40% of food grown goes to waste__, [according](https://apeelsciences.com/our-story/) to Apeel. And it's [worse](https://www.politico.com/news/2020/04/05/food-waste-coronavirus-pandemic-164557) in the corona-conomy: with restaurants and colleges closed, milk is being dumped and veggies are turning to mulch.
- __Apeel offers a food-preserving solution:__ Its proprietary plant-based product acts like a 2nd peel on your fruit's skin, slowing water loss and oxidation (aka, rotting). That can triple shelf-life of produce - so far this year, Apeel saved 20M pieces of fruit.
- __The catch:__ Right now, it's only "apeeling" avocados, asparagus, lemons, and limes. Eventually, it could expand to the wider world of fruits and veggies. 

__You can't buy Apeel (directly)...__ Apeel's customers are big grocery chains like Kroger that are looking to shrink their "shrinkage" — aka, how many fruits they have in store vs. how many they can actually sell (no one wants the mush avocado). By reducing food inventory that gets wasted, Trader Joe's can save big money.



_Best man wins the Apeel banana_

Preserve

__"Is this avo apeeled?"...__ If consumers start to ask that question, Apeel has won. Brand labels matter — if shoppers associate Apeel with 3X shelf life, it could gain consumer love (and even more investor $$$). Slapping a label on it for consumers like you and us could boost sales for Apeel, retailers, and fruit producers. 


The Unicorn that won't expire: Apeel raises $250M for food preservation

__"Disneyland on the streets"...__ What __Zoox__ [wants](https://www.wsj.com/articles/amazon-in-advanced-talks-to-buy-self-driving-car-tech-company-zoox-11590538611) to bring to the world — and don't call it a robo-taxi or self-driving car service: Zoox wants to build "an advanced mobility service." In 2018, the self-driving car company (sorry) hit a $3.2B valuation. Now, it might get acquired by __[Amazon](https://robinhood.com/stocks/AMZN)__ ... but reportedly at a lower value.  

- __Zoox tried to differentiate itself__ by bringing the triple whammy of autonomous vehicles together as one: self-driving, electric, taxi. That brought in big investment bucks. But now...
- __Bigger competitors are going for that same hat-trick:__ __[Uber](https://robinhood.com/stocks/UBER)__ acquired a self-driving startup, __[GM](https://robinhood.com/stocks/GM)__ snatched up Cruise Automation, __[Google](https://robinhood.com/stocks/GOOGL)__'s Waymo started testing self-driving taxis, and __[Tesla](https://robinhood.com/stocks/TSLA)__ has [said](https://www.caranddriver.com/news/a32159871/tesla-robo-taxis-still-coming-2020/) electric robotaxis will be ready this year. 

__Amazon might get Zoox at a discount...__ Investors aren't so hot on Zoox anymore now that all these bigger, better-funded companies are going for the robotaxi gold. Amazon is seizing the moment to level up its driverless tech ambitions, without having to build anything from the ground up. Zoox gets some much needed cash, and Amazon gets some much desired tech.



_When you can't get a Zoox_

Drive

__If automation is involved, Amazon is probably interested...__ Amazon is all about speed, effectiveness, and cost. Where it can cut out expensive humans for tireless robots, it likely will. 

- __In 2012,__ Amazon paid $775M to [acquire](https://pitchbook.com/news/articles/ma-flashback-amazon-announces-775m-kiva-systems-acquisition) robotics startup __Kiva Systems__ — now it has 10K of their robots in warehouses fulfilling orders (and potentially saving it billions).
- __Last year,__ Amazon invested $530M in self-driving tech company __Aurora Innovation__ — by acquiring Zoox, Amazon could get even closer to its goal of having driverless vehicles deliver its goods. 

Amazon might acquire a self-driving tech company to help automate deliveries

Dow Jones

S&P 500

Nasdaq

Bitcoin

10-Yr US Treasury

📸 YouTube gets Insta-Zucked

__To infinity, and Elon'd!...__ Cancel your Netflix plans — we’re tuning into [NASA Live](https://www.youtube.com/watch?v=21X5lGlDOfg&feature=emb_logo). Today at 4:33 PM ET, __SpaceX__ plans to [launch](https://www.theverge.com/2020/5/26/21266277/spacex-nasa-commercial-crew-dragon-demo-2-launch-human-mission) its first ever human passengers into space on the Crew Dragon (sounds like an EDM DJ — actually a reusable spacecraft). The Elon Musk-founded and CEO'd space company (valued at around [$36B](https://www.cnbc.com/2020/02/21/spacex-raising-250-million-elon-musks-company-valuation-36-billion.html))  is making history: 

- __For the first time ever,__ a private spacecraft (aka, not gov-owned) will be sending people to space — the Crew Dragon was developed by SpaceX as part of a NASA initiative to get companies' help with sending people to the International Space Station.
-  __For the first time in almost 10 years,__ astronauts will be launched into orbit from US soil. SpaceX has spent six years prepping for this moment — last year, the Crew Dragon successfully made it to the ISS (without humans onboard).

__Soyuz saying you don't need us?...__ Since 2011, NASA astronauts have bummed rides to the space station on *Russia’s* Soyuz capsule, paying a neat $80M/passenger (no SpaceMiles program yet). So NASA awarded billions to SpaceX and __[Boeing](https://robinhood.com/stocks/BA)__ to develop a non-Russian-government option. SpaceX finished first.





_Wondering if this thing has Ludicrous Mode_

Launch

__One small step for man, one giant leap for capitalism?...__ If the intrepid launch goes well, Elon's dream of colonizing Mars (or, at least, commercializing space travel) may not be so far-flung. 

- __Today,__ "space customers" mainly consist of governments paying to launch cargo, satellites, and people into space. 
- __In the not-so-distant future,__ space companies hope to service commercial customers — __[Virgin Galactic](https://robinhood.com/stocks/SPCE)__ already sold spaceflight tickets for [$250K](https://www.nytimes.com/2019/10/16/science/virgin-galactic-spacesuit.html). 
- __One day,__ space tourism could be a major profit puppy for companies — timeshare on Mars? 

Today, SpaceX will be the 1st private company to try to send humans to space

__Summertime, and the living is...__ Uneasy AF, but not as uneasy as before. As the first day of summer (*June 20th*) approaches, temperatures are heating up and states are loosening up: two months after lockdown started, all 50 states have begun some form of reopening. The "new normal" is slowly reverting back to a "new but *kinda* familiar" normal. Americans are:

- __Driving more:__ Requests for driving directions on Apple Maps have [returned](https://www.nytimes.com/2020/05/26/business/dealbook/coronavirus-reopening-economy.html) to January levels (though public transport is still abysmal). 
- __Traveling more:__ Passengers per flight  [quadrupled](https://www.npr.org/2020/05/23/861242027/after-months-of-steep-declines-air-traffic-is-picking-up) since April — on Thursday, the TSA reported the highest number of screenings since March (but still 88% way less than last year). 

__It's not just the travel stats...__ Investor and consumer optimism is shining through some key indicators:

- __Consumer confidence__ (our relationship status with the economy) got a slight boost in May as some businesses started reopening.
- __Weekly mortgage applications__ are down only 1.5% from last year (a month ago, they were down [35%](https://www.cnbc.com/2020/05/20/weekly-mortgage-applications-point-to-remarkable-bounce-in-homebuying.html)) despite 40M Americans being unemployed. 
- __The S&P 500,__ which measures the stock prices of the 500 largest American companies, is just 11% off its record high. 

"_The new (kind of) familiar normal_"

Open

__Optimism should be tempered with caution...__ Reports of new COVID-19 cases are slowing or levelling off in [most](https://www.usnews.com/news/us/articles/2020-05-26/where-us-coronavirus-cases-are-on-the-rise) states. Twenty states reported an increase last week (could also be a result of more testing). Optimism is also fueled by 118 potential vaccines in the works. But the WHO [warned](https://www.cnn.com/world/live-news/coronavirus-pandemic-05-25-20-intl/h_f260b669316ece8af17b56e6dc0ab64b) about a "second peak" of the virus — and lifting restrictions makes transmission more likely...and put this month's economic progress at risk.

50 US states started reopening their economies — markets love it (so far)

🚀 SpaceX: Historic Launch Day

__The EarPod-calypse is here...__ Like a free side of fries with your burger, or a pack of peanuts with your flight, __[Apple](https://robinhood.com/stocks/AAPL)__ has always given away a "free" set of white wired headphones with your iPhone purchase. Those days may be over: Apple [reportedly](https://9to5mac.com/2020/05/20/kuo-no-free-earpods-iphone-12/) *may not* include EarPods with the iPhone 12. Let's untangle the history...

- __First it was the headphone jack:__ *Don't even think* about charging your phone while jamming to EarPods — Apple made that impossible when, starting in 2016 with the iPhone 7, it eliminated the classic headphone jack.
- __Then it was the wires:__ On the same day it forced headphones into a Lightning Connector, Apple casually intro'd its $159 wireless headphones: Airpods. But Apple was charitable enough to continue including a pair of wired EarPods in each sleek new iPhone box. Until...

__The Bluetooth Fairy was extra generous...__ Apple posted a [record](https://snacks.robinhood.com/newsletters/1TSUKPobYVfVzeGc1Gkbyq/articles/7vq1wd9YvQG0Q9ANwNg8zk) quarterly profit in January, largely thanks to a 37% jump in wearables sales (AirPods Pro nailed it). Roughly [60M](https://www.businessinsider.com/apple-sold-nearly-60-million-airpods-in-2019-strategy-analytics-2020-1) pairs of AirPods were sold in 2019 — turn that up over 50% to an [expected](https://appleinsider.com/articles/20/05/20/iphone-12-predicted-to-ship-without-earpods-will-boost-airpods-sales) 94M pairs in 2020. Looks like Apple's 2nd profit puppy, behind just the iPhone (see ya, Macbook and iPad).

"_What do you mean it's 'no longer included?'_"

Listen

__Apple has all the power in its ecosystem...__ From battery life to software upgrades, Apple can influence your purchases. All it takes is a new product release to make wired headphones as vestigial as iPod Nano. By giving away free earphones with each iPhone, Apple potentially hurt AirPods sales. But if the "no free headphone" reports are true, AirPods may get a boost (our drawer of rando electronic extras probably doesn't need another set of EarPods, anyway).


Un-wired: Apple may get rid of free headphones to boost AirPods sales

- __Came for the $3 bronzer...__ Stayed for the $2 angled brow brush. __[E.l.f. Beauty](https://robinhood.com/stocks/ELF)__ shares soared 19% last week [after](https://www.cnbc.com/2020/05/21/elf-beauty-elf-4q-2020-earnings.html) a 13% quarterly sales pop — thank the blush-worthy triple-digit growth in e.l.f.'s online biz. The cruelty-free, no frills makeup/skincare company thrived on dollar-store prices and availability at "essential" Walmart. Plus, Zoomface is a real thing even if you're not going out. 


- __Bezos is sweating...__  __[Facebook](https://robinhood.com/stocks/fb)__ popped 11% as it [intro'd](https://snacks.robinhood.com/newsletters/7Fl0kcKPHzNEVEVwnee0Zp/articles/7GbosmnxcsEDfjk2yPdKh6) Facebook "Shops," which lets businesses set up digital stores across FB/Instagram. FB gets a "small fee" per purchase — indirectly, it'll also get more ad dollars if businesses find success selling on FB platforms. FB gets to diversify its revenue streams while also propping up its digital lifeblood (ad sales) during ad-pocalypse. And its 3B scroll-obsessed users combined with ecommerce could make __[Amazon](https://robinhood.com/stocks/amzn)__ sweat. BTW — Zuck committed to have 50% of workers working remotely in 5-10 years.

Highs

Who's up...

- __Everybody Hertz (sometimes)...__ Rental car icon __Hertz__ [filed](https://www.wsj.com/articles/hertz-preparing-bankruptcy-filing-as-soon-as-friday-night-sources-say-11590182538) going into the weekend. The airport staple is sitting on $19B in debt — most of its 700K cars haven't felt a human touch on their steering wheels in months. Hertz was hurting pre-corona, thanks to competition from peers like __Avis__ and  ride-hailing services. But near-nonexistent travel demand was the final nail in its deflated tire. 

-  __Unicorns falling into a valley...__ That's the (hilariously) grim picture __[Softbank](https://robinhood.com/stocks/SFTBY)__ (literally) painted in its earnings [slideshow](https://group.softbank/system/files/pdf/ir/presentations/2019/earnings-presentation_q4fy2019_01_en.pdf). The Japanese tech investment giant [posted](https://snacks.robinhood.com/newsletters/6U1RbzmR4p7uaUZVMizhlT/articles/KZr5tV9gdPXsuOb1tpLZH) a record-shattering $18B operating loss for its Vision Fund — nearly $10B of that came from a plunge in the values of its __[Uber](https://robinhood.com/stocks/uber)__ and __WeWork__ investments. Now SoftBank is trying to sell $41B worth of its stock in other companies like __[T-Mobile](https://robinhood.com/stocks/TMUS)__ to get cash fast. 

Lows

...and who's down

🎧 Apple's EarPod-calypse

__The Sorting Hat has spoken...__ We knew the Retail-pocalypse was accelerating during the corona-conomy. Now, we've got more [stats](https://www.wsj.com/articles/coronavirus-widens-retail-divide-leaving-macys-and-victorias-secret-behind-11590058503?mod=business_lead_pos2) to confirm just *how much* — and results are more varied than you'd expect. Some retailers have thrived, some have survived, and many have taken a big old [dive](https://www.wsj.com/articles/coronavirus-widens-retail-divide-leaving-macys-and-victorias-secret-behind-11590058503). Let's start with the Divers:

- __L Brand sales plunged 37%__ — now the Victoria's Secret owner is [closing](https://www.usatoday.com/story/money/2020/05/20/victoria-secret-store-closings-2020-bath-body-works-coronavirus/5231836002/) 250 Vicky stores.
-  __[Macy's](https://robinhood.com/stocks/M)__ sales took a 45% nosedive — the big-box retailer expects a $1B loss. Its buddy __[Kohl’s](https://robinhood.com/stocks/KSS)__ suffered a similar fate with a 41% sales drop. 
-  __[TJ Maxx](https://robinhood.com/stocks/TJX)__, which was [winning](https://snacks.robinhood.com/newsletters/1FKKdbQjIpHVV86ywmUIjB/articles/6YscPrg1Mp9jGaNkCngApy) with its "affordable splurge" biz just a few months ago, saw sales drop 52% (and suffered an $877M loss). 
-  And __Neiman Marcus__, __J.Crew__, __[JCPenney](https://robinhood.com/stocks/JCP)__, and __Pier 1__ have all hopped on the bankruptcy train.  

__Onto the essential Thrivers...__ E-savvy — and most importantly, [*essential*](https://snacks.robinhood.com/newsletters/79biJunQ8AVseCaSA7jDwV/articles/539Nuf6xp1N3GNERBcI8a9) — retailers like __[Walmart](https://robinhood.com/stocks/wmt)__, __[Costco](https://robinhood.com/stocks/cost)__, __[Amazon](https://robinhood.com/stocks/amzn)__ (and even __[Lowe’s](https://robinhood.com/stocks/M)__)  have enjoyed skyrocketing sales and decreased competition from shuttered non-essential retailers. 

- __Non-essential Thrivers:__ Despite closed stores, __[Lululemon](https://robinhood.com/stocks/lulu)__ [made it](https://snacks.robinhood.com/newsletters/5f9CgQ6e0OASVb4XOS2NoL/articles/75PhTygJY5kWlZIfo4Mafu) into the Thrivers club with its online-ready biz and versatile work-leisure wear. 
- __Non-essential Survivors:__ __[Best Buy](https://robinhood.com/stocks/BBY)__ sales fell only 6% and it managed to snag a profit (thanks to curbside pickup and in-demand home tech/appliances).

_Which one will it be?_

Survive

__There's no "one-size-fits-all"...__ But non-essential big-box department stores are feeling the most pain — especially those that weren't exactly thriving before (looking at you, Macy's and JCPenney). Retail apparel sales for the year are down a whopping [52%](https://www.visualcapitalist.com/how-u-s-consumers-are-spending-differently-during-covid-19/). Non-essential retailers like Lulu had WFH-friendly products and e-savvy biz models to prop them up — the unlucky rest didn't.  


The Retail Thrivers, Survivors, and Divers of the corona-conomy 

__When the party gets shut down before 9 pm...__ Detroit's Big Three automakers — __[Ford](https://robinhood.com/stocks/f)__, __[GM](https://robinhood.com/stocks/gm)__, and __[Chrysler](https://robinhood.com/stocks/FCAU)__ — all [reopened](https://snacks.robinhood.com/newsletters/6U1RbzmR4p7uaUZVMizhlT/articles/3JcOfurrxCoLEOz3FH4Wcu/) plants Monday. Update: it's [not](https://www.cnn.com/2020/05/20/business/ford-chicago-positive-covid-19-test/index.html) going well for Ford. 

- __Monday:__ Ford's American assembly plants reopen for production (with  health precautions like temp checks and only half of worker capacity).
- __Tuesday:__ Two employees at Ford's Chicago plant test positive for COVID-19 — the plant is shut down.
- __Also Tuesday:__ An employee at Ford's F-150-cranking plant in Dearborn, Michigan tests positive for COVID-19 — spoiler: the plant is shut down. 

__What would Lear do?...__ Lear is the "iconic" car seat maker that, early on, issued a 51-page "[Safe Work Playbook](https://snacks.robinhood.com/newsletters/6jMYrs8xXmNhuDOMY3gXEt/articles/3I1qrIjd6BQyxoW2Vu3bSB/)" for resuming production. In true Lear fashion...

- __Ford shuttered the two factories__ for 24 hours for a little DCD:  "deep cleaning and disinfection." 
- __It also asked__ anyone who had been in close contact with infected employees to self-quarantine for two weeks. If you think this "start-stop model" isn't sustainable, that's because...









"_Start! Stop! Start! Stop!_"

Close

__This "start-stop" model isn't sustainable...__ Shutting down a factory of thousands each time a person tests positive for COVID-19 is not viable long-term. The infected Michigan employees were working a mile away from the main plant — but because parts from their building were brought to the main assembly line, the whole complex had to be shut. As long as COVID-19 is around (or at least until we have a vaccine), this will continue to be an issue.

Ford just reopened its factories — and it just had to "re-close" two of them

__Even storage can be sexy...__ with $55M in fresh venture funding packed in. When you think of storage, you probably picture massive orange __[Public Storage](https://robinhood.com/stocks/PSA)__ facilities on the side of I-95 that inspire horror-thriller movie plots. __MakeSpace__ wants to be the fun, non-horror version of that — and it just packed up an extra [$55M](https://techcrunch.com/2020/05/21/on-demand-storage-startup-makespace-picks-up-another-55m/) in funding:

- __Unlike OG storage companies,__ MakeSpace doesn't want you *ever* to visit its units — its slogan is [literally](https://makespace.com/): "Never visit a self-storage unit again!" Niiice.
- __Order in-app:__ MakeSpace pick ups, stores, and delivers your valuables (or clutter). You don't have to rent a U-Haul or lug anything (MakeSpace really wants you to know: it's [*not*](https://makespace.com/) Public Storage).
- __The catch:__ To keep costs low, units are located in inconvenient places with lower rent — you can't pop by 24/7 to pick up your golf clubs (you get them delivered).

__The storage industry shouldn't be popping...__ Home sales dropped [18%](https://www.cnbc.com/2020/05/21/april-home-sales-drop-18percent-as-inventory-decline-pushes-prices-to-record-high.html) in April, so you'd think there'd be less moving/storing happening. But MakeSpace's sales have grown [30%](https://techcrunch.com/2020/05/21/on-demand-storage-startup-makespace-picks-up-another-55m/) more than expected because it's actually the opposite:

- __People are moving back to their childhood homes in droves:__ New leasing in Manhattan and Brooklyn plunged 70% in [April](https://www.politico.com/states/new-york/newsletters/politico-new-york-real-estate/2020/05/21/citigroup-eyes-suburban-office-space-334860).
- __Corona-Spring cleaning:__ More time at home means more time to clear out and store all that clutter that's been piling up for the past ten years.



_Public Storage: the horror movie_

Store

__The return of the non-gig startups...__ A VC-funded storage startup might be inclined to call itself the "Uber for Storage." But MakeSpace employs only full-timers — this no-contractor biz model is becoming increasingly rare in the startup world. This out-of-the-box thinking in a gigi-fied world could be a selling point — Gig icons like __Postmates__ and __Lyft__ [struggle](https://www.npr.org/2020/01/04/793142903/as-california-tries-to-make-contract-workers-employees-industries-push-back) with new gig economy laws, tension with workers, and bad PR.

MakeSpace raises $55M to make storage fun: The Return of the Non-Gig Startups

🛒 Thrive, Survive, or Dive

__Hold the (i)Phone...__ This could be "Bezos is worried"-worthy. __[Facebook](https://robinhood.com/stocks/fb)__ unveiled a new product letting businesses set up full-on digital storefronts across FB/Instagram. It's called Facebook "Shops" — unexciting name, but spicier than __[Shopify](https://robinhood.com/stocks/shop)__'s newly launched "[Shop](https://snacks.robinhood.com/newsletters/3KIfGk8MK4PAq1ROwcvC7x/articles/5oGhhuXd1RJZMtNVbnH0Kw)" app (the "s" is key). Shopify isn't (openly) mad though — it's actually [partnering](https://news.shopify.com/shopify-partners-with-facebook-to-help-businesses-launch-branded-facebook-shops) with FB, providing its ecommerce tech/platform to help get Shops up and running:  

- __In 2016, FB had 60M business pages__ and [4M](https://venturebeat.com/2016/09/27/facebook-60-million-businesses-have-pages-4-million-actively-advertise/) businesses actively advertising — just imagine how many it has today (because we don't know). Take all those FB business pages racking up likes, and add all the Instagram brand pages dropping pastels in your feed.
- __Shops turns these business pages into digital storefronts —__ FB has already dabbled in ecommerce (with Marketplace and Checkout), but Shops is the whole shebang. 

__Let's see the receipts...__ Facebook couldn't have launched this at a better time. With businesses suffering from shutdowns (especially small ones), many who shrugged off the ecommerce life are now moving online out of necessity. 

- __Businesses get:__ A free and easy way to turn their social media pages into storefronts. 
- __Facebook gets:__ A "small fee" per purchase — a key revenue differentiator as its profit puppy ads sales decline during this recession. 
- __It's very much in Facebook's interest to make sure businesses don't go under__, so that these businesses have the money/reason to keep advertising on Facebook/Instagram.



_Facebook Shops-ing spree_

Shop

__Social media + ecommerce is a powerful duo...__ And Facebook is already a Master of One. Many of our purchasing decisions are influenced by the things we see on social, partly because it's where we spend so much of our time. And while __[Amazon](https://robinhood.com/stocks/amzn)__ is the master of ecommerce, it doesn't have [3B](https://www.socialmediatoday.com/news/facebook-closes-in-on-new-milestone-of-3-billion-total-users-across-its-pla/577048/) users scrolling through its feeds for #inspo. 

Facebook expands social media dominance with ecommerce: meet "Shops" 

__The "House Hype" is real...__ Not to be confused with __Tik Tok__-famous Hype House, where teens with millions of followers dance in bathrooms. The "House Hype" refers to the period of time during which we realized we'd be spending all our waking and non-waking hours in one place: the house. One beneficiary of that period was __[Lowe's](https://robinhood.com/stocks/LOW)__ — the big home improvement retailer is doing the Renegade dance to some hype-y [numbers](https://www.cnbc.com/2020/05/20/lowes-low-earnings-q1-2020.html):  

- __Sales surged 11+%__ for the quarter as locked down people finally got around to fixing that door handle that's been loose for 12 years. "BRB honey, emergency Lowe's run for more decorative pillows" — the consequences of boredom (see: [frog bread](https://www.thrillist.com/eat/nation/how-to-make-frog-bread-tiktok-quarantine-baking)).
- __Online sales jumped 80%__, as Lowe's pivoted to ecommerce — it rolled out curbside pickup to accommodate online demand, and its website saw triple-digit traffic growth in April. 
- __Profit popped 28%__ compared to last year, as people realized the best time to DIY-home improve is when you're home 24/7. 


__But...__ Lowe's earnings probably would have looked *very* different (read: bad) if it wasn't blessed with an "[Essentials Club](https://snacks.robinhood.com/newsletters/79biJunQ8AVseCaSA7jDwV/articles/539Nuf6xp1N3GNERBcI8a9)" membership. Some retailers got it (cough, Walmart), some didn't (cough, Kohl's).


_It's like DIY Christmas_

__The House Hype might be over...__ Lowe's CEO warned that such high sales growth likely isn't sustainable, and that sales could be [moderate](https://www.cnbc.com/2020/05/20/lowes-low-earnings-q1-2020.html) going forward (Lowe's stock dropped 4% — there's only so many times you can repaint a kitchen). That's the challenging part of success: it makes it harder to impress investors in the next quarter. Plus, if the housing market suffers on the currently staggering unemployment [rate](https://tradingeconomics.com/united-states/unemployment-rate), Lowe's may too.

Lowe's rides on "House Hype" to soaring quarterly sales: the DIY renaissance

__Ain't no crying in the club(house)...__ There's definitely no crying over at __Clubhouse__ app, the buzzy new social media company that just [hit](https://www.cnbc.com/2020/05/20/clubhouse-app-is-where-mc-hammer-and-jared-leto-chat-with-vcs.html) a $100M valuation after raising $12M in funding. The audio app — which is still in beta — is currently only available to a select group of just 1.5K users (#exclusive). It's so stealthy that it doesn't even have a website yet. 

- __It seems kind of like Houseparty__, in the sense that you can spontaneously join a "room" of people for a live chat — but Clubhouse is all about that audio life. 
- __As an audio-only social network,__ Clubhouse lets you tune into live conversations going on in "rooms" — for example, a discussion on how the pandemic is affecting prison inmates (led by rapper MC Hammer and venture capitalist Marc Andreesen). 


__The first rule of Clubhouse...__ Tell every reporter and celebrity about Clubhouse. The exclusivity, "novelty," and celebrity buzz behind Clubhouse likely helped it snag its latest funding round. TBD whether the app will survive past the hype.

- __While "audio social network" sounds like a fancy name for a phone call__, Clubhouse has the potential to be a place where people tune into live conferences about topics that interest them (minus the hassle of a Zoom setup). But...
- __There's no lack of fad social apps__ that raised a ton of money on early hype, only to later drift into nothingness (even now-shutdown __YikYak__ managed to raise $70M). 




"_The first rule of Clubhouse: tell every reporter about Clubhouse_"

Chat

__Exclusivity as a product...__ If Clubhouse isn't able to scale beyond its "exclusive" user base, maybe it can charge member fees. This membership-based model that leverages exclusivity worked on some "selective" social/dating apps (like __Raya__). It's the opposite of the free, "as many users as possible" ad-reliant strategy of social giants like __[Facebook](https://robinhood.com/stocks/fb)__ and __[Twitter](https://robinhood.com/stocks/twtr)__. But if there's no demand for the product, neither strategy will work. 

Clubhouse hits a $100M valuation — and it only has 1,500 users

🛍 Facebook's big shopping bet

__Maybe she's born with it...__ Maybe it's $3B in funding. __[Moderna](https://robinhood.com/stocks/MRNA)__ is a biotech company based out of Cambridge, MA (classic) that wants to hack coronavirus with its cutting edge tech. It raised $2.3B in funding, then shed its magical Unicorn cape to go public in 2018 (résumé item: Moderna had the largest biotech IPO — ever). On Monday, Moderna elevated markets with [news](https://www.wsj.com/articles/moderna-says-initial-covid-19-vaccine-results-are-positive-11589805115) that phase 1 trials for its COVID-19 vaccine candidate yielded positive results. 

- __Over 100 coronavirus vaccines are currently in development__ around the globe — Moderna's is among the 8 front-runners that have started human trials (including __[Johnson & Johnson](https://robinhood.com/stocks/JNJ)__ and __[Pfizer](https://robinhood.com/stocks/PFE)__).
- __Moderna does things differently...__ Its bread and butter is mRNA, the messenger that sends protein-making instructions from our DNA to our cells (like a DM with a recipe for at-home Power Bars, except not at all).
- __Instead of using a weakened virus to make vaccines,__ Moderna is literally re-engineering mRNA to teach our cells how to make virus-destroying antibodies. If successful, this tech could be modified to target a wide range of viruses and diseases. But...

__No mRNA vaccine has ever been approved for human use...__ Yet. But these gene-based vaccines can be developed more quickly than OG, established ones. Moderna's ambitious plan is to have its vaccine ready for emergency use as soon as this fall. The FDA gave it permission to start the 2nd phase of testing — Moderna's aiming to be in the 3rd/final round by July.

_Let's hack this COVID_

Vaccinate

__Moderna hasn't sold a single thing yet, but it's worth $27B...__ Moderna's got a lot in its [pipeline](https://www.modernatx.com/pipeline), but no sell-able products to show for it (yet). But its pre-product cutting-edge tech is exactly what's getting investors excited — Moderna has almost quadrupled in value this year. Now it's making an opportune [sale](https://www.cnbc.com/2020/05/18/moderna-plans-to-issue-1point25-billion-in-fresh-equity-following-20percent-stock-jump.html) of new stock, hoping to raise an extra $1.3B — couldn't have timed it better.

Moderna gets closer to hacking COVID-19: a $27B biotech selling 0 products 

__Padding required to make it through these aisles...__  __[Walmart](https://robinhood.com/stocks/WMT)__, aka the largest US retailer, just [unveiled](https://www.wsj.com/articles/walmart-sales-surge-as-coronavirus-drives-americans-to-stockpile-11589888464) a value-sized cartload of earnings. The numbers are for February, March, and April — half semi-normal, half full-blown pandemic. Walmart's corona-conomy success is far from shocking, but it tells an interesting story:

- __-5.6%:__ Walmart's foot traffic actually *fell* almost 6%  compared to last year. Buuut...
- __+16.5%:__ Spending per transaction *jumped*, meaning Walmart carts were 16.5% fuller — shoppers visited less, but stocked up more. 
- __+74%:__ Online sales soared, thanks to Walmart's meaty [e-grocery](https://snacks.robinhood.com/newsletters/3GrDekUbeSUHNRq33vbDag/articles/3rC0C91lB3jKOjyrZfutDP) operation— 3.2K locations were hot on curbside pickup, while 1.6K made delivery dreams come true. 
- __+10%:__ How much total sales surged compared to last year. Despite the $900M the 'Mart dropped on COVID-related expenses (like hiring 235K extra workers), it still had a higher operating profit. 


__Like that 21+ ID card...__ Walmart's got a cool ID of its own — it's part of the "Essential Club," aka the group of businesses that are allowed to stay open during lockdown periods.

- __Like Walmart, [Kohl's](https://robinhood.com/stocks/KSS) sells__ clothes, toys, and home essentials (like Walmart, because Walmart sells everything).
- __Unlike Walmart, Kohl's does not sell groceries....__ That's why its sales for the same quarter [tanked](https://www.cnbc.com/2020/05/19/kohls-kss-reports-q1-2020-earnings.html) almost 44% — Kohl's 1.5K stores were shut for almost half the quarter. #Nonessential

_Essentials Club initiation_

__The biggest 2020 stock driver: are you e-ssential?...__ There are two major components that influence a company's corona-conomy  success, and Walmart checks *both* boxes:

- __Essentialness:__ When mandated shutdowns for non-essential businesses started, stores like Kohl's couldn't suddenly start slinging groceries to qualify to not have to close. And sales that would have happened at Kohl's probably happened at Walmart instead (again, because Kohl's was closed). 
- __E-Readiness:__ Companies like Walmart, __[Amazon](https://robinhood.com/stocks/amzn)__, and __[Target](https://robinhood.com/stocks/tgt)__ already had robust ecommerce platforms built out pre-corona (their stocks are trading near all time-highs). Companies that aren't as digitally-savvy suffered — Kohl's stock is trading at 1998 levels.



Walmart's foot traffic falls, but sales soar: it's the "XL-Sized (e)Cart" earnings report

🛒 Walmart's e-ssential quarter

__"Into the valley of the coronavirus..."__ Where __[SoftBank](https://robinhood.com/stocks/SFTBY)__'s founder/CEO Masayoshi Son said some of his beloved tech unicorns had fallen. The Japanese tech and telecom investment giant [posted](https://www.reuters.com/article/us-softbank-group-results/softbank-vision-fund-records-18-billion-operating-loss-portfolio-slides-underwater-idUSKBN22U0KK?il=0) a record $18B operating loss for its Vision Fund — almost $10B of those losses came from the plunged values of its __[Uber](https://robinhood.com/stocks/UBER)__ and __WeWork__ investments (WeWork dropped from $47B value to $2.9B in a year). 

- __SoftBank revealed its depressing results__ in a [slideshow](https://group.softbank/system/files/pdf/ir/presentations/2019/earnings-presentation_q4fy2019_01_en.pdf) — the first 10 slides are dedicated to showcasing everything in the world that coronavirus ruined (complete with stock images of a sad chef). 
- __SoftBank is under pressure__ from activist investor __Elliott Management__ (aka the most [aggro](https://snacks.robinhood.com/newsletters/3o6fm1unqkQI9smatHu2oa/articles/5AT2AeWUMj9xrmIMGk4k80/) fund on Wall Street) to salvage the situation — now SoftBank is aiming to sell $41B of its own investments to get cash.

__"Can I interest you in some T-Mobile shares?"...__ What SoftBank is asking at its big tech yard sale. It's reportedly in talks to sell its __[T-Mobile](https://robinhood.com/stocks/TMUS)__ shares to German carrier __[Deutsche Telekom](https://robinhood.com/stocks/DTEGY)__. Currently, Deutsche owns a 43% stake in T-Mobile, Softbank owns 24%, and common stockholders like us own 33%.


_Waiting for someone to buy those T-Mobile shares_

Sell

__When you're broke, you sell your valuables...__ Companies do the same. Under different circumstances, SoftBank probably wouldn't be selling its T-Mobile shares. After its recent [merger](https://snacks.robinhood.com/newsletters/PmRtD9krW8T3WMf5elaP3/articles/61rPuJhCjslevX0uRucLKO) with Sprint, T-Mobile is the #3 carrier out of the new "Big Three" in the US (after AT&T and Verizon) — and the stock is up 24% in the past six months. But the corona-conomy left Softbank with few choices — and it might have to sell other holdings to make a comeback.

SoftBank Vision Fund lost $18B, so it's trying to sell its T-Mobile shares 

__If you're not writing a novel...__ then you don't belong in a __Peet's Coffee__. Peet's was founded in Berkley, CA in 1966 by a man [who](https://www.peets.com/learn/alfred-peet) "ignited a revolution that forever changed the expectations of American coffee drinkers." Today, it's owned by the privately held (and weirdly [mysterious](https://www.businessinsider.com/jab-holding-building-a-coffee-and-bagel-empire-2017-4)) German conglomerate __JAB Holding__ — JAB also owns Panera, Krispy Kreme, Stumptown, and Keurig Dr Pepper. Now...

- __JAB is looking to take Peet's public (again),__ aiming to raise $2.2B in an IPO (according to [#PFWTM](https://www.wsj.com/articles/peets-coffee-owner-brews-2-2-billion-ipo-11589812486)) — it would be one of the biggest IPOs this year so far.
- __While many of Peet's 200+ shops are closed,__ *80% of Peet’s coffee is actually sold for home consumption* (those fragrant bean blends hitting you at grocery stores). 
- __Ground coffee sales at US groceries jumped 11%__ in April, proving that demand for "Arabian Mocha-Java" bags is even stronger in the corona-conomy (people are trading $5 store-bought lattes for bags of beans).



__But first, coffee...__ Caffeine-obsessed JAB is creating its own special blend of coffee (companies). Back in December, it [mixed](https://www.jacobsdouweegberts.com/company-news/jde-and-peets-coffee-to-combine-and-explore-ipo/) Peet's with Dutch brand JDE — its portfolio includes "iconic household names" like L’OR, Tassimo, and Pickwick. That combo is what is IPO'ing, and is expected to generate $7.5B in annual revenues.

_When you find out 1 company owns your entire sugar/caffeine fix_

__JAB thinks coffee is pandemic-proof...__ As the most widely used psychoactive substance in the world, coffee is one of the most popular (and most addictive) consumer staples. In a recession, humans don't drink less coffee — they just drink *cheaper* coffee. That's why JAB will probably lean in *even more* into its pandemic-proof, at-home coffee biz. 

Peet's Coffee might get a $2.2B IPO: it has more than just shops up its (coffee) sleeve

__Chicago had Jordan, Pippen, and Rodman...__ Detroit's Big 3 are carmakers: __[GM](https://robinhood.com/stocks/GM)__, __[Ford](https://robinhood.com/stocks/f)__, and __[Chrysler](https://robinhood.com/stocks/FCAU)__. And they're [reopening](https://apnews.com/6eff35c0c71383df417ed015f7acf48d) their factories, which have been closed since mid-March. Based on recent upticks in demand in China, automakers are hopeful that sales will follow when production restarts in the US:

- __133K American workers are expected to return__ to Big 3 plants across the country — Ford alone is bringing back 47K workers this week. 
- __If the regular speed limit is 60, automakers are cruising 30:__ They're only bringing back around half the full capacity of workers, and are implementing precautions like: temperature checks, face shields, plexiglass barriers, and staggered shifts.


__When times get tough, the profit puppies get more attention...__ While automakers are taking health/safety precautions, another COVID-19 outbreak could spell another major closure. That's why the Big Three will focus on producing its profit puppies — trucks & SUVs — while they can. 

_Ready to roll_

Produce

__This is about much more than Detroit Big Three...__ It's about the fate of all their auto industry buddies, like auto parts suppliers and car dealers. A whopping [3M](https://www.bls.gov/iag/tgs/iagauto.htm) Americans work in the [auto industry](https://robinhood.com/collections/automotive), and rely on automakers to fuel their businesses. Car part-making companies have already begun cranking production this week for the highly anticipated factory reopenings. 

Detroit's "Big 3" reopen for business this week — this is bigger than carmakers

☎️ SoftBank's tech yard sale

__The "G" is  hard...__ Mark Zuckerberg must have been blasting Will Smith's 1997 [banger](https://www.youtube.com/watch?v=3JcmQONgXJM) as he signed the papers to [acquire](https://about.fb.com/news/2020/05/welcome-giphy/) GIPHY for [$400M](https://www.axios.com/scoop-facebook-to-buy-giphy-for-400-million-4a75a359-833b-484d-b15b-87e94d3de017.html). The GIF-sharing platform will join __[Facebook](https://robinhood.com/stocks/FB)__ as part of Instagram  — its library of LOL-inducing moving images will be more deeply integrated into Insta as well as FB's other apps. FYI - GIPHY won't get banned from non-FB apps, like __[Twitter](https://robinhood.com/stocks/twtr)__ and __[Slack](https://robinhood.com/stocks/work)__.

- __Ever wonder where all those GIFs come from?__ They're born in the GIPHY [website](https://giphy.com/gifs/entertainment-drink-negroni-stanley-tucci-H7ICsepAOmIap3iqN1) — hundreds of [millions](https://www.axios.com/scoop-facebook-to-buy-giphy-for-400-million-4a75a359-833b-484d-b15b-87e94d3de017.html) of users contribute to this library with billions of looping vids.
- __GIPHY doesn't own the rights to the vids__ used in GIFs, so it makes money by showing sponsored results to searches (you search for "funny cow" and get a __Dairy Queen__ GIF). 
- __Experiment:__ Try searching for a "Lip Gloss" GIF on Instagram DM — A glossy mouth with __Maybelline__ branding comes up as a top result. 


__What's in a GIF?...__ While FB says it acquired GIPHY to help people better "express themselves," __50% of GIPHY’s traffic already comes from__ Facebook's "[family of apps](https://snacks.robinhood.com/newsletters/2NAQjqWOY8CUQ4E7cSgLSV/articles/1B3z0zVanj31Zf7eHDXXjY/)" (Facebook, Instagram, WhatsApp, and Messenger) – 25% of that traffic comes from Insta alone. So it's gotta be something else...

_Gettin' GIPHY Wit It_

Acquire

__GIPHY is the secret sauce to Facebook's ad-reliant burger...__ Facebook and GIPHY are free, but make money by promoting sponsored content — Facebook does ad sales on a ginormous scale.  By making GIFs a more prominent part of its apps, Facebook can make more $$$ from GIPHY's brand partners by exposing them to its [2.5B+](https://techcrunch.com/2018/07/25/facebook-2-5-billion-people/) users.

- __GIPHY could be Facebook's Trojan Horse into every social and messaging platform:__ GIFs are already so ingrained into  popular culture that FB's competitors can't drop them.
- __It's actually in Facebook's interest *not* to ice out competitors from GIPHY:__ Say you search for a "burger" GIF on Twitter  — Facebook could potentially get paid to have  __In-N-Out__ be the top result fetched from GIPHY's site. 
 



Facebook buys GIPHY, cementing control over the spirit of social media


- __Hit me with the "high" puns...__ __[Aurora Cannabis](https://robinhood.com/stocks/ACB)__ stock soared 70% after the Canadian pot producer [reported](https://www.barrons.com/articles/aurora-cannabis-reported-higher-pot-sales-the-stock-soared-67-today-51589584343) higher-than-expected quarterly sales — it was Aurora's [biggest](https://www.marketwatch.com/story/aurora-cannabis-stock-jumps-as-pot-sales-grow-faster-than-expected-2020-05-14) daily gain (ever). Aurora really needed a good hit, especially after its stock nearly [crashed](https://finance.yahoo.com/news/aurora-cannabis-acb-stock-buy-165651495.html) over '18 and '19. After losing almost $1B in the previous quarter, Aurora cut costs and was able to beat its comedown — sales jumped 18% compared to last quarter.

-  __Make Lululemonade...__ Despite its 400+ closed stores, __[Lululemon](https://robinhood.com/stocks/LULU)__ [found](https://snacks.robinhood.com/newsletters/5f9CgQ6e0OASVb4XOS2NoL/articles/75PhTygJY5kWlZIfo4Mafu) zen in the corona-conomy — 33% of its sales were happening online *before* lockdowns, so going 100% ecommerce didn't make it break a sweat: online sales tripled compared to April 2019. Lulu's products happen to be season-less and stay-at-home versatile (we call it Work-leasure). __[Under Armour](https://robinhood.com/stocks/UA)__ and __[Nike](https://robinhood.com/stocks/NKE)__ stocks are both deeply down this year — Lulu is up almost 6%.


- __Don't push your luck(in)...__ __[Luckin Coffee](https://robinhood.com/stocks/LK)__ [faked](https://snacks.robinhood.com/newsletters/1cblBuDtgtokNEYEzCvie4/articles/1krUG6u9IaHRyq4K1dx9Fo) its 2019 sales numbers by $310M (#FakeBrews) — so shares have been halted from trading since April when it plunged 80% on the fraud. Yet it still [opened](https://www.bloomberg.com/news/articles/2020-05-14/luckin-coffee-still-expanding-full-steam-despite-sales-scandal?sref=q3KSFp38) *10 stores every day* last quarter. And it's pivoting: The techie coffee chain is becoming a digital convenience store, [now selling](https://techcrunch.com/2020/05/14/china-luckin-coffee-sells-lifestyle-products/) lifestyle products from sanitizing wipes to beauty masks in the app — seems random, but random add-ons to apps are more common in Chinese tech. 

- __Cult classic movie *Office Space*...__ may become a historical fiction. Last week, __[Twitter](https://robinhood.com/stocks/TWTR)__ [announced](https://snacks.robinhood.com/newsletters/3zyhoJMmhQdMulq2nhX3S/articles/4znTtL8CtP3I7k00WQ2pOn/) it's giving employees the option to WFH *forever*. But companies that rely on you coming to the office — aka the ["Work from Work"](https://snacks.robinhood.com/newsletters/3jWvja1E6QgDf3tDbH7uqa/articles/6jYsJEjG2gKZzpwNNZoj5v) — could lose big if permanent WFH becomes a trend. __[JP Morgan](https://robinhood.com/stocks/jpm)__ and __[Morgan Stanley](https://robinhood.com/stocks/MS)__ both said it's highly unlikely that all employees will return to offices post-corona. Commercial real estate giant __[CBRE](https://robinhood.com/stocks/CBRE)__'s stock fell nearly 13% for the week, while __[Office Depot](https://robinhood.com/stocks/ODP)__ is [planning](https://www.cnbc.com/2020/05/15/office-depot-plans-store-closures-13100-job-cuts-by-2023.html) store closures and 13K job cuts by 2023.

💃  Facebook gets GIPHY with it  

__When life gives you Lululemons...__  make Lululemonade. __[Lululemon](https://robinhood.com/stocks/LULU)__'s 400+ stores have been closed since mid-March. The yoga, spin, and pilates studios where people show off matching Lulu outfits are equally shuttered. But the corona-conomy hasn't stopped the athleisure icon:

- __33%:__ Online sales already made up [33%](https://www.wsj.com/articles/lululemons-surge-could-have-long-legs-11589470142?mod=hp_featst_pos2) of Lulu's total sales *before* lockdowns started, making it well-position for a shift to full ecommerce. 
- __+50%:__ How much Lulu's online sales [jumped](https://www.wsj.com/articles/lululemons-surge-could-have-long-legs-11589470142?mod=hp_featst_pos2) in April (aka, mid-corona crisis) compared to January of this year.  
- __+200%:__ How much Lulu's online sales soared in April compared to April 2019. 

__Just as flexible as its $90 leggings...__ In a recent WSJ [survey](https://www.wsj.com/articles/lululemons-surge-could-have-long-legs-11589470142?mod=hp_featst_pos2), 24% of people chose athletic/athleisure wear as a top-three category of what they would spend their stimulus checks on.  The 24/7 stay-at-home life mainly consists of chilling, working, exercising, and sleep. Lululemon is cruising because it checks  3 of those 4 boxes:  


- __One legging, many leg things:__ Lulu clothes are athletic enough for an at-home yoga sesh, stylish enough for an Erewhon run, and comfy enough for a Netflix  binge. 
-  __The rise of "work-leisure":__ Lulu also leaned into styles that look like work clothes, but feel like sweats — this anti-khaki innovation helped sales of menswear jump almost [40%](https://www.wsj.com/articles/lululemon-tests-how-far-men-will-stretch-11576069203?mod=article_inline) in the December quarter. 


_Didn't even need to change out of work clothes_

Stretch

__Versatility is market strength...__ That might be why Lululemon stock is performing way [better](https://www.wsj.com/articles/lululemons-surge-could-have-long-legs-11589470142?mod=hp_featst_pos2) than that of its more singularly-focused athletic peers. Lulu stock is up 1% for the year — while that doesn't sound incredible, __[Nike](https://robinhood.com/stocks/NKE)__ is down 15%, __[Adidas](https://robinhood.com/stocks/ADDYY)__ is down 32%, and the intensely athletic house-protecting __[Under Armour](https://robinhood.com/stocks/UAA)__ is down almost 65%. 

Lululemon finds its zen in the WFH era — flexibility is its greatest strength

__So, this is awkward...__ Pre-corona, __[SmileDirectClub](https://robinhood.com/stocks/sdc)__ was one of the worst-performing IPOs of 2019. The direct-to-consumer brand [sells](https://snacks.robinhood.com/newsletters/3tA1ji9npZdhYI7tTpkCre/articles/2PBg5mVruGMykGGlrhBQQD/) teeth-straightening aligners online (think cheaper DIY Invisalign), along with electric toothbrushes, tooth-whitening kits, and dental device cleaners. You'd think the lockdown economy would be perfect for its D2C biz model — but things are actually *worse*:

- __In the corona-concomy, tele-everything is winning__ — __Zoom__  soared on teleconferencing, __Netflix__ is rejoicing on streaming subs, and __[Teladoc Health](https://robinhood.com/stocks/TDOC)__ stock has more than 2X'd in the past six months.
- __While telemedicine is [thriving](https://venturebeat.com/2020/04/27/medici-raises-24-million-as-telehealth-demand-surges/),__ SDC's sales growth rate plummeted from 50% to 11% in just one quarter — it also posted a [loss](https://investors.smiledirectclub.com/news-releases/news-release-details/smiledirectclub-reports-first-quarter-2020-financial-results) of $107M. 
- __SDC orders were down nearly 40%__ throughout April into May. After its disappointing earnings, SDC's shares are down a whopping 62% since its September IPO.


__"Challenging times"...__ Mentioned twice in SDC's earnings statement. Invisalign-maker __[Align Technology](https://robinhood.com/stocks/ALGN)__ also reported a significant earnings [miss](https://finance.yahoo.com/news/align-technology-algn-q1-earnings-141202755.html) for the quarter — but that can be explained by the fact that Invisalign requires patients to actually visit an orthodontist/dentist in person. SDC is mainly direct-to-consumer, so it doesn't have the same excuse. 





_Nothing to smile about_

Grin

__SmileDirectClub (ironically) has a word-of-mouth problem...__ It doesn't have a cultural "fan" following — even Invisalign got mentioned in a Billie Eilish [song](https://www.youtube.com/watch?v=DyDfgMOUjCI). SDC just slashed its marketing spend by [90%](https://investors.smiledirectclub.com/news-releases/news-release-details/smiledirectclub-reports-first-quarter-2020-financial-results), and demand for its kits fell 40%. Meanwhile, Peloton is cutting  advertising and still has too much demand. Either SDC needs to be more effective with its marketing, or users just aren't spreading the word about the product.


SmileDirectClub should be the Peloton of oral hygiene right now — but it's not

🧘‍♀️ Lululemon's work-leisure win

__To the Loon and back...__ __Loon__ is the LTE balloon company spun out of Google's secretive X Lab of [moonshot](https://snacks.robinhood.com/newsletters/17UIm0XkpjsTSi823N7RR7/) projects. Loon balloons (Loons?) fly twice as high as planes (*12 miles up*), casting internet down to areas with underdeveloped infrastructure. Now the __[Alphabet](https://robinhood.com/stocks/GOOG)__-owned floating phenom just sealed a key [deal](https://techcrunch.com/2020/05/13/loon-signs-deal-to-expand-commercial-internet-service-to-mozambique/) in Mozambique. 

- __Loon inked that with mobile carrier Vodacom__, expanding Voda's commercial internet service in Africa — from its super-high Loons. 
- __Only 40% of people in Africa have internet access__, and just [21%](https://www.internetworldstats.com/stats1.htm) of people in Mozambique do (FB stat: in December, Mozambique had 2.4M Facebook users out of a population of 31M) — so this is a huge untapped market for online companies. 

__The problem is lack of infrastructure...__ Many rural/remote or underdeveloped areas around the world lack the strong ground infrastructure needed for internet connectivity. Loons solve that problem by basically acting as floating broadband cell towers. 

- __Cell towers aren't economical in rural areas,__ but Loons are [12 miles](https://qz.com/africa/1325552/googles-project-loon-to-use-balloons-to-beam-the-internet-in-kenya/) up into the stratosphere (rad), and are able to economically cover more rural regions. 
- __By expanding its service in nearby African markets (Loon is in Kenya, too),__ Loon can strategically position its balloons to consistently cover multiple areas even when air currents change. 

_Loon balloon launch party_

Float

__Google can get paid twice with Loon...__ First, by signing deals with cell carriers like Vodacom and getting paid to expand coverage with its floating balloons. Second, by connecting more of the world to the internet, getting more people Googling, and therefore selling more ads. Around 42% of the world doesn't have internet access — that's over 3B people Loon/Google could potentially make money from (twice).

Google's Loon expands internet-connecting balloons in Africa 

__Can hear a pen drop in the office lobby...__ Yesterday, we talked about __[Twitter](https://robinhood.com/stocks/TWTR)__'s [decision](https://snacks.robinhood.com/newsletters/3zyhoJMmhQdMulq2nhX3S/articles/4znTtL8CtP3I7k00WQ2pOn) to let its employees work from home *forever* (AKA, permanent optional WFH). Today, we're looking at the companies that could lose out most if enough employees don't return to offices. Let's start with a bankable [example](https://www.nytimes.com/2020/05/12/nyregion/coronavirus-work-from-home.html):

- __Before corona-crisis:__ __[JP Morgan](https://robinhood.com/stocks/JPM)__, __[Morgan Stanley](https://robinhood.com/stocks/MS)__ and __[Barclays](https://robinhood.com/stocks/BCS)__ were some of NYC's largest commercial tenants, shelling out major moolah on rent for employees in glassy 50-story skyscrapers.
- __Now:__ Everyone's WFH, and all 3 banks say that it's very unlikely all employees will return to offices, even post corona-crisis. Research firm __[Nielsen](https://robinhood.com/stocks/NLSN)__ expressed a similar view, per [NYT](https://www.nytimes.com/2020/05/12/nyregion/coronavirus-work-from-home.html) reporting.

__Some companies/employees are getting comfortable with WFH...__ (noticing more pajamas on Zoom calls?). And if too many start permanently allowing WFH, we'll see some corporate offices empty out. That directly hurts "Work from Work" companies relying on you going into the office:  

- __Real Estate:__ Commercial real estate investment companies that rent office space will lose. __[Vornado Realty Trust](https://robinhood.com/stocks/VNO)__ and __[CBRE](https://robinhood.com/stocks/CBRE)__ stock are both down around 12% for the week.  
- __Supplies/Food:__ __[Office Depot](https://robinhood.com/stocks/ODP)__ stock is down 7% for the week because offices aren't restocking Post-its. Meanwhile, corporate catering companies aren't catering, and local restaurants lose out on big lunch orders. 
- __Cities/States:__ They'll miss real estate taxes and public transit work commutes. Real estate taxes make up over [30%](https://www.nytimes.com/2020/05/12/nyregion/coronavirus-work-from-home.html) of NYC's revenue.

_So this is Work From Work_

Work

__Work from Work companies may have to WFH...__ If widespread WFH actually takes hold (still questionable, despite hype) then Work from Work companies will have to shift business models, or risk going under. Catering and office supplies companies could start offering company-sponsored at-home subscription packages — but shifting will be much harder for commercial real estate businesses and cities, which rely on office revenue. 

Work from Work businesses are panicking: the companies that rely on company offices

__Sounds cheesy...__ Pizza ordering app __Slice__ just [raised](https://techcrunch.com/2020/05/12/slice-series-c/) $43M in fresh dough to help small pizzerias go online. For the Big Four players in the mafia-style [delivery wars](https://snacks.robinhood.com/newsletters/3zyhoJMmhQdMulq2nhX3S/articles/7uGwKzgedJAjF1GbyMgs73/) – __DoorDash__, __[Grubhub](https://robinhood.com/stocks/grub)__, __[Uber Eats](https://robinhood.com/stocks/uber)__, and __Postmates__ — *more is more* (1,578 different pad thai options within delivery-range). But for Slice, less is more, and *pizza is everything* (we don't blame it):

- __Slice helps small pizzerias compete with big chains__ — it provides all the tech, payment systems, customer service, and marketing that these mom-and-pop shops need to make it in the heated $46B US pizza market. Call it PaaS (pizza as a service).
- __Unlike the Big Four food platforms__ — which can [take](https://sf.eater.com/2020/4/3/21207395/postmates-uber-eats-doordash-commissions-fees-delivery-coronavirus) more than a 20% cut on orders through various fees — Slice [charges](https://venturebeat.com/2020/05/12/slice-raises-43-million-to-help-pizzerias-go-online/) a set $2.25 commission + 4% processing fee per order (though it doesn't actually deliver the pizza). Still, steep fees can be killer especially for smaller businesses. 


__Slices on Slice are well positioned in the corona-conomy...__ 90% of its 13K pizza partners have stayed open during lockdowns — That's because of pizza-nomics (the economics of pizza). Pizza joints were doing takeout/delivery on their own well before apps were a thing, unlike your neighborhood tapas spot and most other food options.

"_You want pizza, pizza, or pizza?_"

__Platforms need sellers *and buyers*...__ And up-and-coming Slice will need to conquer the (pizza) sellers before it can corner the (pizza) buyers. Right now, 10-year-old Slice is still focused on attracting great pizza joints to its platform — once it has your go-to local pie shop on board, it has a way better chance of attracting you (aka, the buyer). We expect new consumer-focused features, like loyalty points, to hit the app next.