__All Uber the place...__ __[Uber](https://robinhood.com/stocks/UBER)__'s been on a  consolidation streak lately. First came last week's [sizable](https://snacks.robinhood.com/newsletters/S1Y2OuCckkh8TtunS8W8Z/articles/5Ds7Jd716NHZc7o5G5Sicf/) investment in e-scooter company __Lime__ (and [consolidating](https://usa.streetsblog.org/2020/05/11/lime-just-became-the-biggest-micromobility-company-in-the-world/) it with its own e-scooter/bike biz). Now, Uber has [reportedly](https://www.bloomberg.com/news/articles/2020-05-12/uber-is-said-to-approach-grubhub-with-takeover-offer?sref=q3KSFp38) offered to acquire __[Grubhub](https://robinhood.com/stocks/GRUB)__ (to  consolidate with its own Uber Eats delivery) as early as this month. Let's reacquaint ourselves with the [mafia-style](https://snacks.robinhood.com/newsletters/5H4bzJb2lCpsjW7HA5Czc3/articles/APpX6NGeIEYFrIq5NYcoA/) delivery wars:

- __Uber is 10X bigger than Grubhub__ in terms of [market value](https://learn.robinhood.com/articles/GByCbiOluG2kcWs1AF6m5/what-is-market-capitalization/), but Grubhub has a bigger share of the US food delivery market. 
- __Right now, DoorDash is still__ the leader, controlling [42%](https://secondmeasure.com/datapoints/food-delivery-services-grubhub-uber-eats-doordash-postmates/) of the US market, followed by Grubhub with 28%, Uber Eats with 20%, and Postmates with 9%.
-  __Uber and Grubhub combined would control almost half__ of the market, and Grubhub stock jumped 30% on news of the potential engagement.


__Tackling the promiscuity problem...__ Back in October, Grubhub's CEO famously called its users "[promiscuous](https://snacks.robinhood.com/newsletters/3o0KQAYYbRpqhqULwfOWaD/articles/7m8VoFteAIgGsRXEzlIssk)" — there's no loyalty in the food delivery game, as you switch from app to app according to whoever offers the best promos. 

- __Food delivery is largely unprofitable thanks to these code-diggers.__ To win customers, all the apps compete to offer the best promos (aka give away free money) — this has caused Grubhub some major profit losses. 


_Food delivery wars losing steam_

__Consolidation breeds consolidation...__ And more of it is coming. Once 2 competitors merge to form a mega-competitor, even the biggest competitor in the game will feel threatened, and then be tempted to team up with someone else. If Uber and Grubhub mega-merge, DoorDash might team up with Postmates to regain its don-style market leader status.

Mafia-style delivery wars consolidate: Uber reportedly offers to buy Grubhub

__Test driving the couch...__ You buy socks, matcha powder, and dumbbells from your couch — why not throw a minivan in the cart too? Online used-car seller __Vroom__ [reportedly](https://www.wsj.com/articles/online-car-seller-vroom-files-confidentially-for-ipo-11589152790) just filed to go public — and it's circled the calendar for June. Vroom wants to disrupt the car dealership experience: 

- __Less Haggling:__  By cutting out the car dealer middleman, Vroom [says](https://www.vroom.com/) it's better able to pass on savings to its customers (no haggling). Still, in 2019 over [half](https://www.wsj.com/articles/online-car-seller-vroom-files-confidentially-for-ipo-11589152790) of Vroom's sales came from traditional dealerships. 
- __[Contact-free](https://vroom.zendesk.com/hc/en-us/articles/360042225111-Does-Vroom-offer-contact-free-delivery-):__ The style of Vroom's car-delivery service — this method involves three separate instances of either you or your delivery driver "walking a safe distance away." 
- __7-Day Returns:__ Sweater not the right shade of peach? Return it. Prius not as "magnetic gray" as in the pics? Send it back within a week. 

__Not every company that plans/files to IPO actually does it...__ Postmates, DoorDash, and (cough) WeWork still haven't. But Vroom's plan to IPO in June, in the middle of the corona-conomy, suggests it's confident in its outlook (*or* it just needs to raise money):

- __In December, Vroom raised $250M at a [$1.5B](https://www.wsj.com/articles/online-car-seller-vroom-files-confidentially-for-ipo-11589152790) valuation__, but we don't know what it's worth today. 
- __We *do* know__ that Vroom's bigger/better-known rival __[Carvana](https://robinhood.com/stocks/CVNA)__ saw its share price jump 7X since its 2017 IPO (it's now trading at near-record levels). 

"_Please walk a safe distance away from the Vroom_"

Drive

__Vroom thinks its IPO filing is coronavirus proof...__ Vroom’s S-1 filing (it's still confidential) will give potential investors a lot of info — we're betting Vroom will highlight its corona-conomy strengths: Vroom's anti-human-contact, online-focused biz model. And for people looking to avoid public transit, Vroom's used cars may fit snuggly with economic strain and germ worries.

Online car seller Vroom files to go public — the rare quarantine-friendly IPO

__Never wear real pants again...__ __[Twitter](https://robinhood.com/stocks/TWTR)__ just told employees they'll be allowed to work from home [*forever*](https://www.buzzfeednews.com/article/alexkantrowitz/twitter-will-allow-employees-to-work-at-home-forever). Jobs that require being physically present will still have to come in, but other than that, WFH is officially a forever thing. __Google__ and __Facebook__ and a bunch of others [have](https://www.foxbusiness.com/technology/twitter-employees-work-from-home-forever) already made WFH optional until 2021 — but "forever" takes it to a whole new level:

- __Employees:__  Don't have to pay for a $3K 1-bedroom to work driving distance from Twitter HQ in SF. CEO Jack Dorsey can work from his 10-day silent vipassana [meditations](https://qz.com/1489982/jack-dorsey-missed-the-point-of-meditation-on-his-myanmar-retreat/) in Myanmar. 
- __Company:__ Twitter pays less rent for office space if it scales down (and less on food/snacks/supplies). It can also potentially pay workers less if they're not paying rent in an expensive city. 
- __Cities:__ Could alleviate housing crunches and traffic congestion. 

__But there are a lot of unknowns...__ Do employees really want to work from home *forever*? Will this hurt productivity, collaboration, and collegial relationships? Will Twitter lose talent/applicants to companies with cool, social offices if people don't want a remote office culture? WFH is also almost entirely dependent on services like __[Slack](https://robinhood.com/stocks/WORK)__, which had some [down time](https://www.theverge.com/2020/5/12/21256717/slack-is-down-disruption-outage) yesterday.

_1 year into Permanent WFH_

Work

__This could be the start of a mega-trend...__ But its effects aren't so clear. Permanent WFH hasn’t been tested long-term, so we really don't know how it might affect company/employee success. Guess Twitter can be the guinea pig, if enough employees choose to do it (permanent work from home will be optional at Twitter, not mandatory). 

Twitter will let employees work from home forever. Forever.

Dow Jones

S&P 500

Nasdaq

Bitcoin

10-Yr US Treasury

🏠 Twitter's permanent WFH

__Just got Elon'd...__ __[Tesla](https://robinhood.com/stocks/TSLA)__ has officially [filed](https://techcrunch.com/2020/05/11/daily-crunch-tesla-sues-alameda-county/) a lawsuit against Alameda County, CA. The e-car hotshot says the county's order to keep Tesla's Fremont factory closed is unconstitutional, and threatened to leave California altogether: 

- __The federal gov left reopening up to states —__ California allowed a phased opening of some businesses (including manufacturing) starting last Friday. But CA Gov. Gavin Newsom said local governments can keep stricter lockdown rules if they want. 
- __Tesla argues Alameda's decision to keep closed is arbitrary__ — Tesla's distribution facility in nearby Lathrop has been allowed to operate. But Elon's [beef](https://snacks.robinhood.com/newsletters/CkefbR2DiPaJdPUSjXZTO/articles/2Sz2IfhGP42jRjKCz7ZTfh) with lockdown orders goes wayyy back to early March.

__"Frankly, this is the final straw"...__ In a tweet-storm, a spurned Elon said Tesla will move its operations to Texas/Nevada immediately. But a Tesla exit would be a loss for California:

- __As one of the [largest](https://www.tesla.com/factory) manufacturing employers__ in California and the only big CA-based car maker, Tesla created 51K jobs for the state (its Fremont factory alone employs 10K workers).
- __A Tes-xit would lose CA some serious tax $$$:__ In 2017, Tesla generated $4.1B in direct spending in CA — Elon could also save [billions](https://www.cnbc.com/2020/05/11/elon-musk-could-save-billions-in-taxes-if-tesla-moves-its-headquarters.html) in taxes by moving Tesla HQ to Texas or Nevada (where state taxes are lower). 

_Elon vs. the state_

__Big biz has sway over local government...__ While local government officials might overlook Elon's child being named "X Æ A-12," they'll have a harder time ignoring the loss of an economic powerhouse. Also, other CA companies could follow Elon's lead. Tesla knows this, and Elon ordered a [restart](https://www.theverge.com/2020/5/11/21254871/tesla-fremont-shutdown-factory-production-model-3-y-elon-musk) of production in defiance of the public health order on Monday. Tesla has economic incentives to ditch, but risks losing concentrated engineering talent of the Bay Area (and local love).

Elon vs. California: if Tesla can't restart production, it might ditch the Golden State

__Amazon and AMC sittin’ in a tree...__ M-E-R-G-I-N-G. Just as unconfirmed as that 2nd grade rumor about Billy and Sally, but more interesting. [According](https://www.dailymail.co.uk/money/markets/article-8303833/Could-Amazon-local-cinema.html?mod=article_inline) to British tabloid Daily Mail (which we take with large grains of salt) __[Amazon](https://robinhood.com/stocks/AMZN)__ is considering buying __[AMC](https://robinhood.com/stocks/AMC)__. This potential melange piqued our acquisition fantasy (and made AMC stock soar 30%). Here's what Amazon could get:

- __(More) Influence:__ With 11K+ screens, AMC is the [largest](http://investor.amctheatres.com/investor-faqs) movie theater chain  in the world — this would provide Amazon (even) more global reach. AMC also exerts significant influence over movie studios and execs (see: [*Trolls*](https://snacks.robinhood.com/newsletters/76jnSWZc6iKnCka8DwnCwj/articles/12pFjiFXKs4qKrpQFtdJav) sequel drama). 
- __(More) Prime benefits:__ Amazon could provide discounted movie tix for Prime members and/or free screenings for Amazon Studio-made films. __[Netflix](https://robinhood.com/stocks/NFLX)__  [bought](https://www.wired.co.uk/article/netflix-buying-cinemas) movie theaters in NY and LA to screen its own films, but on a much smaller scale. 
- __Also, Amazon is richer than ever__ on [soaring](https://snacks.robinhood.com/newsletters/7lAyqtqNIjryLcrbEsE1lA/articles/37pobA8bF2kiCprBx9nuEq) sales, while AMC's stock value has collapsed 30% since late Feb — so it would be acquirin' at a discount.

__Amazon wants it all...__  This reported acquisition can also be explained by Amazon's proclivity to world domination. It dominates ecommerce, it leads in cloud computing, it took on streaming, it birthed Alexa, and it even got into the grocery game. Now it would be coming for movie theaters.

_Amazon's "about to acquire AMC" look_

Acquire

__But maybe AMC isn't the best acquisition target...__ Amazon's other physical retail-acquisition (Whole Foods) [hasn't](https://www.forbes.com/sites/andriacheng/2019/08/28/two-years-under-amazon-whole-foods-still-has-its-work-cut-out-to-erase-the-whole-paycheck-image/#4c98be7f4227) yet achieved its "affordable for everyone" promise, and Amazon's grocery operation is still lagging behind major retailers. Also, AMC is saddled with almost [$5B](https://www.dailymail.co.uk/money/markets/article-8303833/Could-Amazon-local-cinema.html?mod=article_inline) in debt and a loss-making biz — that would become Amazon's problem if Bezos snatched it up.

Amazon's (potential) AMC acquisition is the talk of the town — here's how it could go 

__Not a horror movie title...__ The [Halvening](https://learn.robinhood.com/articles/bitcoins-mining-reward-is-about-to-be-cut-in-half-what-investors-should-know-about-the-halvening/). Bitcoin’s long-awaited block reward halving — the 3rd ever since the cryptocurrency's creation — [happened](https://www.theblockcrypto.com/linked/64774/bitcoin-halving-just-happened) (halvened?) yesterday. The reward for verifying a block of Bitcoin transactions has been cut in half from 12.5 Bitcoins to 6.25 (at $8.7K/Bitcoin, that's a $54K reward). A little background...

- __When  bitcoin was created__ by the mysterious "Satoshi Nakamoto," he/she wanted to make sure people wouldn't use it fraudulently (like using the same coin twice), because then it could become worthless. Enter Bitcoin miners...
- __People "mine" Bitcoin__ by using a massive amount of computer power to verify the legitimacy of transactions on the block. With Bitcoin, there's no central bank to validate transactions (no Chase updating your latte purchase in-app) — so miners are critical.
- __Miners get rewarded in Bitcoin__ for successfully adding a block of transactions to the chain (aka updating "ledger"). 
- __Every 210K blocks (around every 4 years)__ the block reward is cut in half — in 2009 it was 50 BTC, in 2012 it was 25 BTC, in 2016 it was 12.5 BTC — now it's 6.25 BTC. 

__Curb your crypt-thusiasm...__ In addition to verifying the legit-ness of transactions, mining also introduces new coins into the system (like a central bank controlling the printing of $$$, but decentralized). Enter Satoshi's halving rule...

- __Halving the reward is a way to prevent inflation__ and control this new supply of bitcoin — slowing the creation of coins helps stabilize price. 
- __Today, about 18.4M bitcoins have been mined__ out of the 21M that will ever be created — in 2140, all 21M coins will have been mined. 
 



_The Halvening_ 

__It's all about getting "priced in"...__ This event has been on calendars since 2016 and Halvenings have happened before. If all investors in the market know that same information (like they did), then they probably already reacted and planned for the Halvening beforehand. That means the event was “priced in” to the current price, so in theory the Halvening shouldn't move the price much — and it didn't. The price of a Bitcoin just inched down yesterday.



The Halvening is upon us: bitcoin block reward gets cut in half

😱 Bitcoin's "Halvening" is upon us

__Honestly horrifying...__ The April Jobs Report. A jaw-dropping __20.5M Americans__ [lost](https://www.wsj.com/articles/april-jobs-report-coronavirus-2020-11588888089) their jobs last month, bringing the unemployment rate to __14.7%__. Just a year ago it was [3.6%](https://www.bls.gov/opub/ted/2019/unemployment-rate-3-point-6-percent-in-april-2019-lowest-since-december-1969.htm). And we thought the [870K](https://www.bls.gov/news.release/empsit.nr0.htm) jobs we lost in March was bad... 

- __It's the worst unemployment rate since the Great Depression__ in 1933, when unemployment hit 25% — it's also the [greatest](https://www.cnn.com/2020/05/08/economy/april-jobs-report-2020-coronavirus/index.html) job loss (by far) since the gov began tracking monthly job gains/losses in 1939. 
- __8.7M jobs were lost during the '08 financial crisis__ — in the decade after that, US employers added __22.8M__ jobs to the economy. The COVID-19 crisis wiped out ten years of job gains in just a month. And probably more...
- __People are only considered unemployed__ when they're actively searching for a new job — many aren't right now, partly because many companies aren't hiring and the stay-at-home orders. If you include these people, the unemployment rate is probably more like [23%](https://www.wsj.com/articles/april-jobs-report-coronavirus-2020-11588888089).

__But Wall Street is popping bottles...__ The stock market saw the unemployment numbers and barely flinched: 

- __The Nasdaq recovered__ all its 2020 losses and is up over 30% since its low on March 23 — the tech-heavy index is now higher than its December 2019 value. 
- __The S&P 500__ — the index which [measures](https://learn.robinhood.com/articles/7kFFEUv46vmMCmMfLuNiRX/what-is-the-s-and-p-500/) the stock prices of the largest 500 US companies — has soared 31% since March 23 (so has [the Dow](https://learn.robinhood.com/articles/13urVTf3GSQYdsr7Eq5fHL/what-is-the-dow/)). 









_The economy vs. the stock market_

Rise

__The stock market isn't the economy...__ And stock prices don't necessarily reflect economic health (as we're seeing today) — *they reflect future expectations*. 

- __The economy is like a soccer player__ who just broke his/her leg, and the stock market is like fans hoping the player will heal quickly and win matches. 
- __Because of its forward-looking nature,__ the market can recover faster than the economy. The current rally reflects optimism about health-related [progress](https://snacks.robinhood.com/newsletters/32i4L3GVINjOcpAioPFFfZ/articles/3lA4W9nM9yhoIa57AKcEU), government [intervention](https://snacks.robinhood.com/newsletters/CLl0evxvaKPwXSPACmU6C/articles/jtOWtkujqwVzIeEa8NYkj), and the resilience of big tech companies (which affect market indexes heavily because of their large [market values](https://learn.robinhood.com/articles/GByCbiOluG2kcWs1AF6m5/what-is-market-capitalization/)).
- __TBD if the optimism is justified__ — it could take a while for jobs (and the economy) to bounce back to game shape. Oh and remember the [trade war](https://www.cnbc.com/2020/05/09/us-china-trade-trump-torn-over-phase-one-deal.html)? 


20.5M Americans lost their jobs in April, but the stock market rallies — what gives?

- __You don't look like your voice....__  Even with podcast listening down, __[Spotify](https://robinhood.com/stocks/SPOT)__ [grew](https://snacks.robinhood.com/newsletters/76jnSWZc6iKnCka8DwnCwj/articles/6v6GwaZchj6ENCj6xHmuoE/) its paid subscribers by 31% in the 1st quarter. Now the Swedish audio streamer is coming for your eyes: Spotify is [testing](https://www.theverge.com/2020/5/6/21249389/spotify-video-podcast-test-upload-content-test-youtube) video podcasts in its app, starting with two major YouTube stars. Reportedly, the plan is to expand video to many more podcasts — with its 286M paying subscribers, Spotify could snag viewers away from Google-owned YouTube.

- __Spinning away the "quarantine 15"...__ __[Peloton](https://robinhood.com/stocks/PTON)__ shares hit a [record high](https://snacks.robinhood.com/newsletters/2FM1iMyeVeUcmesr5FeXMu/articles/1AzQxmgq3tbqbN9ybVg8oS/) since the at-home-spin company reported explosive demand. Sales of Peloton's $2.2K spin bikes and $4.3K treadmills were up 66% for the quarter, and paid subscribers nearly 2X'd to 886K. Oh, and 176K people who *don't* own any Peloton hardware are also paying $19/month for fitness classes on the app. All that extra sweat led to a record-breaking 44M Peloton workouts over just 3 months.

Highs

Who's up...

- __February 2020 seems like forever ago...__ Back then, __[Uber](https://robinhood.com/stocks/UBER)__ [expected](https://fortune.com/2020/02/06/uber-q4-2019-profitability-plan/) to be profitable by year's end. Reality: Uber [lost](https://techcrunch.com/2020/05/07/uber-eats-grew-like-hell-in-q1-but-ubers-still-lost-nearly-3b/) $2.9B last quarter, a massive L (even for Uber's famous [cash-burns](https://snacks.robinhood.com/newsletters/2HXLsqjbZ5lE7XcosxSKJc/articles/2xoUEA0qXJ5vWn0legHv4y)). Even though gross bookings for Uber Eats soared 54%, Uber's ride-hail biz plummeted [80%](https://www.theverge.com/2020/5/7/21251111/uber-q1-earnings-rides-loss-eats-delivery-coronavirus) in April. But around [two-thirds](https://www.marketwatch.com/story/uber-admits-that-ride-hailing-is-worth-less-because-of-coronavirus-but-investors-still-think-uber-is-worth-more-2020-05-07) of Uber's quarterly loss was caused by its tanking investments in Asian ride services __Didi__ and __Grab__.

- __Baby Yoda eating Mickey Mouse churros (alone)...__  __[Disney](https://robinhood.com/stocks/DIS)__'s profit [fell](https://snacks.robinhood.com/newsletters/7kUCvPmXZ2AB4lOFC3m77C/articles/1FLj6gpv6tXolPZxSGju70/) 91% this quarter — Its Parks division suffered an un-magical 10% sales dip (parks have been shut since March 16). Disney's cable networks (like ESPN) are suffering on zero live sports, depressed ad sales, and accelerated cord-cutting. As a sour cherry on top of the corona-loss sundae, the release of studio blockbusters like Mulan had to be put on hold. 

Lows

...and who's down

🤔 Stocks rally. Economy suffers.

__Turn up the resistance...__ Lockdown orders have caused the number of crunches and mountain climbers done on living room floors to skyrocket. But since there are no Push-Up Mutual Funds or Burpee ETFs, we're looking at __[Peloton](https://robinhood.com/stocks/PTON)__. The spin bike company's shares soared 16% Thursday to a record high as demand for its at-home fitness product exploded:

- __Sales up +66%:__ Its $2.2K spin bikes and $4.3K treadmills rode off shelves — and then you pay $39/month to stream classes. A shocking 176K are subscribed to the app without Peloton hardware (aka, DIY Peloton bike on iPad — or one of its other workouts). 
- __But, a loss:__ Peloton boosted its sales forecast for the year on all those endorphins, but still posted a $56M loss last quarter.

__SoulCycle addicts have withdrawal...__ The corona-conomy brought Peloton new types of customers who wouldn't have considered buying before the pandemic. People who usually work out at studios or in group classes through their gym memberships caved under cabin fever:

- __+94%:__ Paid subscribers nearly 2X'd since last year to [886K](https://www.wsj.com/articles/peloton-gains-as-consumers-work-out-at-home-11588801735). A record 23K people streamed Peloton's largest class ever. 
- __44M:__ Peloton logged a record-shattering 44M workouts in the quarter (490K workouts per day on average), up from 24M in the December quarter.


_Trying to resist the Peloton craze_

Ride

__Investors predicted this success...__ Peloton shares more than doubled in the past 1.5 months because investors eyed critical leading indicators. Lagging indicators (like Peloton's earnings report) tell us the result from the past, while leading indicators are more forward-looking. Take Peloton's 7-9 day normal shipping time — it increased to over a month, indicating surging demand, which translates to future sales boosts.

Peloton sales surge on booming corona-conomy demand

__No more unlimited free samples...__ You know, because... germs. Maybe that's why __[Costco](https://robinhood.com/stocks/COST)__'s sales fell for the first time since July 2009. The Disneyland of bulk retail, Costco represents more than just a store to be shopped — *it's an experience to be lived*. Let's re-live the past three months:

- __February sales jumped 12%:__ 'Twas the beginning of the lockdown panic — shoppers flocked to Costco for boatloads of food and cleaning supplies, flashing membership cards like pandemic status symbols.
- __March sales spiked 10%:__ People who didn't panic hoard in Feb started panic hoarding — the Feb panic hoarders had to restock Kirkland bacon. Also, [TP panic](https://snacks.robinhood.com/newsletters/1lDDrudmsmZqlefmRUywxS/articles/2Ldz75Us2KdusEsPlkc8lm) took hold. 
- __April sales fell 5%:__ Thanks to strict stay-at-home orders and scaled back service in areas like the Costco food court (no more deliciously greasy pizza and impossibly long churros). But one item really hurt April's numbers...


__Blame the gas...__ Gas sales make up 11% of Costco's revenue. Too bad oil prices took a violent nosedive in April, even going [negative](https://snacks.robinhood.com/newsletters/3Q7KEWCIGgm4NA6zYBCUa0/articles/581oe4aDAiPbPtcdsz1vzh/) at one point. On top of that plunge, Costco members were driving way less (and not filling the old tank as much). Costco blamed 70% of its April sales drop on low gas prices/demand. 

_Secured the last Costco pizza before the Food Court shut down_

Shop

__Costco is about to face the budget question...__ In a recession, one of the first places people look to cut is fixed costs (like streaming subscriptions or cable). Unlike other retailers, Costco has subscription memberships (starting at $60/year) — in 2019 Costco had a ridiculously high 91% renewal rate. TBD if a corona recession will help or hurt that. 

Costco sales fall for first time in a decade — here's why April was different

__Miss the old Game Boy Advance...__ But __[Nintendo](https://robinhood.com/stocks/NTDOY)__ doesn't crush sales by getting nostalgic over an old console that flips closed like a mini laptop. Fun fact: Nintendo was founded as a playing card company back in 1889 — over a century later, the Japanese gaming giant still appears to be playing its cards right:

- __Annual profit soared 41%__ from a year ago to __$3.3B__, Nintendo's [biggest](https://www.cnn.com/2020/05/07/tech/nintendo-earnings-intl-hnk/index.html) surge in nine years.
- __Nintendo Switch sales jumped 34%__ compared to a year ago — it even recently [sold out](https://www.cnn.com/2020/05/07/tech/nintendo-earnings-intl-hnk/index.html) on several websites, despite the fact that it was released in 2017 (and is suffering production delays).
- __Nintendo's Animal Crossing: New Horizons__ game became the fastest selling title ever on Switch. Apparently lots of people wish they were on some colorful, animal-filled, pandemic-free island somewhere. 

__Good software drives hardware surges....__ The hit success of Animal Crossing drove demand for Nintendo's Switch, which has been out for almost four years. For Nintendo, content is key to spurring sales of its console hardware. And Nintendo hit a goldmine with Animal Crossing — people are so into it that they're hiring [interior designers](https://www.newser.com/story/290538/animal-crossing-interior-designers-offered-50-an-hour.html) for their island decor.





_When Bank of Nook cuts interest rates on savings_

Play

__TBD whether the creative hits will continue...__ The surge in Switch sales was driven largely by Animal Crossing's success, but Nintendo reportedly [doesn't](https://www.reuters.com/article/us-nintendo-results/after-the-triumph-of-animal-crossing-a-thin-pipeline-for-nintendo-idUSKBN22J0UG) have many new games in its pipeline. Nintendo even said it's predicting a fall in software sales this year because game developers can't come to the office. And unlike the other game consoles (Playstation and Xbox), Nintendo designs most of its own games (85% of them). 

Nintendo surges on Animal Crossing and Switch sales — but can the hits continue?

🍕Costco's once-in-a-decade sales drop 

__My plant-based brings all the boys to the yard...__ And they're like, "it's better than pork." __[Beyond Meat](https://robinhood.com/stocks/BYND)__ can teach you, but it has to charge (a lot). Beyond Meat, known for its patties made of pea-protein, saw sales rise 141% last quarter. It even turned a $1.8M profit. Not huge, but significantly better than the $6.6M loss it took last year. Beyond's facing a coronavirus see-saw situation:

- __The Up:__ WFH and the closure of restaurants has caused supermarkets sales to rise as people cook more meals at home. Plus, national corona-caused [meat shortages](https://www.cnn.com/2020/05/05/business/wendys-beef-shortage/index.html) position Beyond to gain new customers.
- __The Down:__ Restaurants are closed, meaning Beyond is no longer supplying plant-based meat to all those sit-in diners — Beyond's sales [dropped](https://www.cnbc.com/2020/05/05/beyond-meat-bynd-earnings-q1-2020.html) at the end of March as eateries shuttered.

__Too pricey for that frozen aisle life...__ Restaurant sales made up just [42%](https://www.cnbc.com/2020/05/05/beyond-meat-bynd-earnings-q1-2020.html) of Beyond’s total sales last quarter, down from 59% the previous quarter. Corona-conomy poses a perfect opportunity for Beyond to beef up its grocery game — but... 

- __Beyond may be too expensive__ for big grocery growth: Beyond Burgers are sold as 2-patty packs for around $5.99 — that's [$12/pound](https://www.barrons.com/articles/beyond-meat-price-comparison-51559339044), compared to $5/pound for real ground beef at Whole Foods (and you can buy beef in bulk, unlike Beyond). That's why...
- __Beyond is  now planning to offer [discounts](https://www.reuters.com/article/us-beyond-meat-results-prices-idUSKBN22H2T7) and value packs__ to some US retailers — it's hoping that offering lower prices and larger packages will allow it to capitalize on corona-conomy hoarding needs. 

_Beyond Meat Krabby Patty playing it safe_

Grow

__We think Beyond is too young to be chasing profits...__ It should focus on growth instead. Beyond's profit was mainly because its plant-based meat enjoys a high price tag. But it's still [lagging](https://www.forbes.com/sites/andriacheng/2020/01/17/beyond-meat-is-the-biggest-beneficiary-in-the-growing-plant-based-meat-market-study/#3c785c9a1a53) cheaper meat-substitutes from MorningStar and Conagra in terms of market share. The value packs and discounts are a step in the right direction — they'll cut into profit in the short-term, but set Beyond up for increased growth.

Beyond Meat turned a profit last quarter, but that may be a bad thing 

__The emptiest place on earth...__ Mickey and Cinderella have been living off stale churros since March 16,  waiting for Disneylands to reopen. __[Disney](https://robinhood.com/stocks/DIS)__'s net profit fell a whopping [91%](https://www.wsj.com/articles/disneys-income-falls-as-coronavirus-takes-hold-11588710935) this quarter, and the magical company took an un-magical $1.4B hit on its earnings — blame corona-conomy, which is affecting all aspects of Disney's empire (some more than others):

- __Parks/cruises:__ Disney's Parks, Experiences, and Products division (a key profit driver) was the worst hit, with a [10%](https://www.wsj.com/articles/disneys-income-falls-as-coronavirus-takes-hold-11588710935) sales dip and a massive 58% drop in operating profit. 
- __Cable networks:__ Disney's ESPN has no live sports to stream, and ad sales are falling since advertisers aren't splurging on commercials for things you probably won't buy.
- __Studio entertainment:__ With movie theaters shut, Disney decided to put its expensive blockbuster releases (like Mulan) on [hold](https://www.cnbc.com/2020/05/05/disney-to-evaluate-movies-on-a-case-by-case-basis-amid-coronavirus.html). AMC's CEO [loves](https://snacks.robinhood.com/newsletters/76jnSWZc6iKnCka8DwnCwj/articles/12pFjiFXKs4qKrpQFtdJav) this decision.
- __Streaming:__ Disney's Direct-to-Consumer segment — which includes Disney+ and Hulu — was up [260%](https://www.wsj.com/articles/disneys-income-falls-as-coronavirus-takes-hold-11588710935) and raked in $4.6B in sales (Disney+ now has an impressive 54.4M subscribers). The streaming surge helped Disney's 21% overall sales growth. 


__Disney is like a microcosm of the corona-conomy...__ As the world's largest entertainment company, it encompasses media, experiences, retail, and even travel (cruises).

- __Like the corona-conomy,__ Disney benefited from the surge in digital entertainment, but was overburdened by overall losses in key areas. All divisions of Disney's franchise machine affect each other (no Mulan movie = no Mulan toys).
- __Disney's future was as brilliant as fireworks just a few months ago__ — now it's furloughing 100K workers, cutting dividends, and shaving exec salaries. 


Overheard at Disneyland: "_All the humans, where are?_"

Imagine

__Disneyland's reopening will be a major morale indicator for the US...__ Whenever it happens. It'll mean things are *relatively* back to "normal." In China, Disneyland Shanghai is scheduled to [reopen](https://www.cnbc.com/2020/05/06/shanghai-disneyland-will-offer-a-blueprint-for-reopening-other-parks.html) on May 11 — but with temperature screenings, masks, and capacity capped at 30% (and Snow White will have to keep a [distance](https://www.wsj.com/articles/disneys-income-falls-as-coronavirus-takes-hold-11588710935) from guests). Disneyland Shanghai was closed on [Jan 25](https://www.cnbc.com/2020/05/06/shanghai-disneyland-will-offer-a-blueprint-for-reopening-other-parks.html) — almost 2 months before US Disneylands closed.

Disney's profits plunge on empty parks (and more): a reflection of corona-conomy

🍔 Beyond's profit misteak

__What would Michael Scott do?...__ Our thoughts when we heard  NBC was pulling *The Office* out of Netflix. Now __[Comcast](https://robinhood.com/stocks/CMCSA)__-owned cable king __NBCUniversal__ is embarking on a broad restructuring of its entire media biz — NBC is moving its news network, cable channels, and streaming all under 1 giant umbrella:

- __The new unit, NBCUniversal Television and Streaming__ (that's a mouthful), includes  NBC's news networks (NBC, CNBC, MSNBC), cable channels (like Bravo, USA and E!), and NBC's new streaming service Peacock. 
- __Peacock is the new kid among NBC's old cable types —__ it launched on April 15 to Comcast subscribers, and will launch nationwide in July.



__If you thought Peacock was just a fun little dip into streaming...__ you were wrong. NBC is now putting streaming at the [center](https://www.wsj.com/articles/nbcuniversal-to-combine-tv-streaming-operations-in-broad-restructuring-11588622043?mod=business_lead_pos5) of its media operations and future aspirations. The barely-launched streamer is getting a head seat at the table with NBC's established old guard. 


- __CEO Jeff Shell hopes the new structure__ will set NBC up for future success  "during this transformational time in the industry.”
-  __Cord-cutting has [accelerated](https://snacks.robinhood.com/newsletters/3VYgq4XRGydXCiWCpJd3rW/articles/5XPdRwH7GPf2fZGiyykxV5/)__ in the corona-conomy, and ad sales are suffering on fallen spending — NBC might see its subscription streaming service as a way to fill those gaps.

_When you find out you now have the same boss as Peacock_

Stream

__NBC is cutting its own cord...__ Despite cable's decline, many still stick with it for live sports, news, and award shows. NBC has that on lock, from the NFL to SNL to America's Got Talent. Now it can combine live broadcasts and on-demand video *all on one platform* (Peacock). To be competitive, NBC would have to offer a way lower price than Hulu+ Live TV, which is already doing this on-demand + live streaming content model for $55/month (not that different than cable). 

NBC's Peacock streaming service disrupts itself

__Zooming from a teal Daulton Side Chair...__ __[Wayfair](https://robinhood.com/stocks/W)__ is the  somewhat-chic, kind-of-techy, relatively affordable online furniture and home decor store — you probably know someone under the age of 30 in Boston who works there. Now Wayfair is winning in the lockdown economy:

- __Sales jumped 20% last quarter__ as people flocked to Wayfair websites to make their homes (and home offices) more palatable for 24/7 lockdown living. 
- __Despite the sales boost, Wayfair lost $286M__ last quarter. Still...
- __Wayfair stock shot up 24% to its highest point in a year__ and is now up 132% in a month. 

__If it acts like tech...__ Wayfair doesn't call itself a furniture company. It [calls](https://www.cnbc.com/2020/05/05/wayfair-w-earnings-q1-2020.html) itself "the e-commerce leader in home." Despite its furniture fame, Wayfair doesn't actually manufacture any of the [14M](https://www.vox.com/2019/8/28/20833645/wayfair-many-brands-websites) products it sells across its five websites — it just connects furniture-makers with customers and takes a cut (so it doesn't really have to touch your geometric area rug). 


_Wayfair home office setup_

Furnish

__Online-only doesn't mean business runs cheap...__ At first glance, we marvel at why techy companies like Lyft (with seemingly just an app and a few offices to run) are still losing billions a year. It's because they've got massive (though not immediately obvious) expenses:

- __Wayfair still hasn't been able to turn a profit__, since it's dropping major $$$ on costs like marketing, customer service, and delivery.
- __In 2018 Wayfair splurged over [$1.3B](https://www.vox.com/2019/8/28/20833645/wayfair-many-brands-websites) on marketing__ alone, which helped erase the profit it made on $7B worth of goods sold. 

Wayfair sales soar because it puts the "home" in WFH — but still no profit

__Not the good Corona & Lime combo...__ You used to see people with wind-swept hair cruising on __Lime__ scooters, which littered sidewalks and street corners in flocks of neon green. Now, not so much. Lime has seen its business evaporate through the course of the pandemic — now it might be getting juiced by __[Uber](https://robinhood.com/stocks/UBER)__:

- __Come-Up:__ Lime is the 2nd [fastest](https://www.npr.org/sections/money/2020/04/14/833577679/unicorn-riding-scooter-in-fatal-crash) startup to have reached unicorn status, after its scooter peer/frenemy __Bird__. Love them or hate them, scooters were hot venture capital fodder.
- __Come-Down:__ In March, Lime voluntarily [suspended](https://snacks.robinhood.com/newsletters/7EOWpp9lfAXJUTVcflke2X/articles/6TpDhX7wVjbZonCanvFVEZ) service in almost all its locations, laid off almost 20% of its staff, and only had around $60M in cash left out of $700M raised. 
- __Come-Downer:__ Uber is [reportedly](https://www.theinformation.com/articles/uber-in-talks-to-lead-170-million-lime-investment-at-lower-valuation) in talks to lead a $170M investment in Lime that would slash Lime's valuation by almost 80% compared to its last one (from $2.4B to just $510M).


__Scooting my way DownRound...__ Money raised in a down round reduces a company's valuation because shares are offered at a lower price than they were in the previous funding round — it's kind of a desperate move, and Uber's squeezing it for what it's worth:

- __Uber already owns a small stake in Lime__, but under this fundraise it would get to significantly up its control (at a big discount). 
- __Uber would get to transfer its uber-unprofitable Jump line__ of e-scooters/bikes to Lime, offer both services in its app, and eventually get the option to buy out Lime at a set price in a few years.







_Uber and Lime_

Scoot

__Consolidate or bust (in a buyer's market)...__ Despite its swift rise to unicorn-status, Lime was [losing money](https://snacks.robinhood.com/newsletters/1TSUKPobYVfVzeGc1Gkbyq/articles/54sXmAAxdrwcihZipbi4sT/) even pre-corona. But the pandemic seems to have pushed it to the verge of bankruptcy — Uber's taking advantage of that desperation to consolidate the scooter market. With its core rides biz nearly non-existent right now, Uber isn't cruising itself. But if scooter/bike travel returns to life faster than ride-share, Uber will have way more control of the market. 

Uber is reportedly leading a $170M investment in (desperate) Lime

🛋 Wayfair puts the "home" in WFH

__All's fair in love and War(ren)...__ With air travel down around [95%](https://www.usatoday.com/story/travel/airline-news/2020/04/08/coronavirus-tsa-passenger-screenings-fall-below-100-000-record-low/2967806001/) compared to a year ago, airlines are getting pummeled — and their plight just got worse now that one of their top investors expressed zero confidence in their future. Over the weekend, Warren Buffett's legendary [holding company](https://learn.robinhood.com/articles/682uX0w1nPHFh1ckCvPwD3/what-is-a-conglomerate/) __[Berkshire Hathaway](https://robinhood.com/stocks/BRK.B)__ revealed that it sold its entire airline stake. 

- __Flirtation:__ After avoiding airlines for years, Warren was finally seduced by steady profits and began investing in 2016. 
- __Commitment:__ Big Berkshire money poured into shares of America's 4 largest airlines — Berkshire gained an 11% stake in __[Delta](https://robinhood.com/stocks/DAL)__, 10% of __[American](https://robinhood.com/stocks/AAL)__ and __[Southwest](https://robinhood.com/stocks/LUV)__, and 9% of __[United](https://robinhood.com/stocks/UAL)__. 
-  __Break-up signs:__ Back in April, Berkshire [sold](https://snacks.robinhood.com/newsletters/6HPBNbId480E2UpCBSnv1U/articles/6Qy1Y04jEMjasDA06IVql3/) 18% of its Delta stake and 4% of its Southwest holding as the pandemic destroyed profits. 
- __Cold turkey split:__ Berkshire has now sold *its entire* airline holding. The shares were acquired for around [$7.5B](https://www.forbes.com/sites/sergeiklebnikov/2020/05/02/warren-buffett-sells-airline-stocks-amid-coronavirus-i-made-a-mistake/#7e99c5165c74), and are  being sold for around $4B — a massive loss. Berkshire announced a record [$50B ](https://www.bbc.com/news/world-us-canada-52518186)loss for its first quarter. 

__It's not you, it's me...__ Warren said that investing in airlines was *his* mistake, and that the "excellent CEOs" of the 4 airlines did nothing wrong. Still, the fact that long-term investment icon Buffet sold his entire investment at a significant loss suggests a dire outlook for airlines.

"_It's not you..._"

Sell

__Airlines' pain could be a long-term issue...__ Even after the COVID-19 situation improves:

- __Airlines will have to take money-draining precautions,__ like leaving middle seats empty and running half-full flights. 
- __Fear/germophobia could continue long-term__, so people could end up flying less. Plus, some may not even have the money to anymore. 
- __The WFH experiment will likely reduce biz travel__ in the future, as companies realize those business class trips to London may not have been that necessary.
- __Even when airlines start making some money again,__ the massive debt they will have racked up may overshadow any gains.


Warren Buffett breaks up with the skies: Berkshire Hathaway sells entire airline stake

__Next up on Chrissy's Court...__ __Quibi__ gets served. Quibi is the mobile-centric, ridiculously well-funded short video streaming app that launched in April. One of its most distinguishing features and differentiators is "Turnstyle," which lets you seamlessly switch between horizontal and vertical phone viewing — it's also the reason Quibi's getting [sued](https://www.wsj.com/articles/hedge-fund-elliott-management-to-finance-lawsuit-against-streamer-quibi-11588536108):

- __Interactive video company Eko is accusing Quibi__ of stealing its patented tech. Reportedly, Eko showed the tech (including its code) to Snap employees, who were later poached by Quibi. Quibi denies any foul play or code-swiping.
- __To spice things up further,__ Quibi founder Jeff Katzenberg [met](https://techcrunch.com/2020/03/10/quibi-and-eko-are-in-a-legal-battle-over-video-tech/) with Eko's founder Yoni Bloch in 2017 about an investment opportunity. Then in 2019, former-Snap/current-Quibi employees met with Eko peeps again.

__And the plot thickens...__ To win against billions-backed Quibi in a lawsuit, Eko needs serious cash. Enter Wall Street's most-hardo hedge fund, __Elliot Management__ (see: [ultimatum'd](https://snacks.robinhood.com/newsletters/42WzDwJTA1ARzGFwlhSQCA/articles/63XF0Ex7GVtXqkWpEfixWt) Jack Dorsey). 

- __Elliot is bankrolling Eko's lawsuit__, in exchange for a "substantial" stake in the company — [according](https://www.axios.com/elliott-management-quibi-patent-lawsuit-turnstyle-8de1840e-cef8-4b21-a1af-2bb0ff6d20b9.html) to #PFWTM. 
- __If Eko/Elliot wins the suit__, Quibi would likely have to stop using the signature turnstyle tech *or* license it from Eko.

"_Secure the turnstyle tech_"

__Patents like "Turnstyle" make companies...__ That's why Elliot is financing this lawsuit. It's just like how Gore-Tex doesn't make North Face or Patagonia jackets, but rakes in money when brands pay to use its patented weather-tech. Elliot/Eko could enjoy a major opportunity if other apps license its turnstyle technology (if they win in court, that is). 

Quibi's lawsuit drama includes Snapchat and the most aggro fund on Wall Street

__What is 'Chambray' and why is it $78?...__ __J.Crew__, the purveyor of breathable blazers, slim-fit khakis, and pastel-colored cableknit sweaters, has officially [filed](https://www.marketwatch.com/story/the-twitter-response-to-j-crew-filing-for-bankruptcy-has-been-savage-but-it-has-a-point-2020-05-04) for bankruptcy — it's the first big retail victim of the corona-conomy, but its issues go waaay back.... 

- __J. Crew was public until 2011__, when 3 private equity firms took it private by borrowing almost $3B (aka, [leveraged buyout](https://learn.robinhood.com/articles/4k8rIELUsxMYz5pj31wW22/what-is-a-leveraged-buyout-lbo/)). J.Crew got saddled with this massive debt. Then it got worse....
- __In 2015, J.Crew's formerly fresh/innovative style began [losing](https://www.nytimes.com/2020/05/04/style/j-crew-bankruptcy.html) relevance__ as tastes shifted. It got stuck in an awkward spot: too expensive to be fast-fashion (like Zara), but not desirable enough to be splurged on as a higher-end brand.
- __Now it's stuck with almost [$1.7B](https://edition.cnn.com/2020/05/04/business/j-crew-bankruptcy/index.html) in debt__. The bankruptcy filing will allow it to stay in business and sell online (until stores can reopen), all while loading your inbox with 60% off sale emails. 

__You're not having deja-vu...__ J.Crew narrowly [avoided](https://fortune.com/2020/05/04/jcrew-bankruptcy-pandemic-sales/) bankruptcy in 2017. Then it tried to spin off its *faster*-growing __Madewell__ brand into a public company *this year* so it could raise $$$ to pay back its boatload of debt. But that IPO never got a chance to put on its NYSE blazer (because, coronavirus).


_Heading to the J.Crew clearance sale_

Close

__Corona-conomy didn’t cause this bankruptcy — it accelerated it...__ For almost a decade, J. Crew has been saddled with massive debt that only grew worse as its popularity [diminished](https://www.marketwatch.com/story/the-twitter-response-to-j-crew-filing-for-bankruptcy-has-been-savage-but-it-has-a-point-2020-05-04).  Now it gets an expensive "fresh start" under Chapter 11 [bankruptcy](https://learn.robinhood.com/articles/7AeTSsM5Qpjlv5voS83tn3/what-is-bankruptcy/).

- __Bankruptcy doesn't mean J.Crew is finished__ — it means it can't pay back its debts. Now it gets time to potentially restructure and reduce its debt load, if the judge agrees.
- __TBD if it will survive longer-term__ Even with a restructuring, J.Crew isn't out of the New England woods just yet. It'll eventually need to pay back debts under the new plan — but it won't be able to do that unless it transforms its struggling brand reputation.
- __FYI__ it's sadly gone through 4 CEOs in 2 years to figure all this out.

J. Crew becomes the 1st major retailer to file for bankruptcy — but its struggles are pre-pandemic

"_Heading to the J.Crew clearance sale_"

👚 J. Crew shrinks

__Be humble. Sit down....__ "You may want to take a seat" is not exactly a phrase shareholders want to hear in an earnings announcement. But that's exactly what __[Amazon](https://robinhood.com/stocks/AMZN)__ [told](https://ir.aboutamazon.com/news-release/news-release-details/2020/Amazoncom-Announces-First-Quarter/default.aspx) investors to do as it reported results from the Jan - March quarter. First, Amazon dropped [key stats](https://ir.aboutamazon.com/news-release/news-release-details/2020/Amazoncom-Announces-First-Quarter/default.aspx) that revealed a lockdown-related sales surge (hoarding, *confirmed*):

- __+26%:__ How much Amazon's sales jumped — the 'Zon racked up over __$75B__ in total sales, their [biggest](https://www.wsj.com/articles/amazons-sales-jump-as-coronavirus-prompts-surge-in-online-shopping-11588278740) 1st quarter leap ever (it's usually the slowest quarter). 
- __-29%:__ How much Amazon's profit fell — Bezos took home a smaller-than-expected $2.5B in profit, despite the sales boom. Amazon brought in way more money, but spent *even way more*.

__Okay, now actually take a seat....__ Amazon proceeded to explain that in the upcoming quarter, it expects to make around $4B in profit. Then, Amazon explained that investors can kiss that $4B in profit goodbye:

- __Amazon plans to spend the entire $4B__ "and perhaps a bit more" on corona-related expenses like getting products to customers on time and keeping worried workers safe while they're working in warehouses.
- __COVID-19 testing [facilities](https://qz.com/1836550/amazon-is-building-its-own-covid-19-testing-lab-for-employees/),__ PPE equipment, and higher wages for hourly employees are all on the docket.
- __Amazonians ≈ Sarahs__. After hiring 175K extra workers to handle increased demand, there are now as many Americans getting an Amazon paycheck (840K) as there are Sarahs ([842K](http://howmanyofme.com/search/))
- __Amazon stock has fallen nearly 8%__ since the announcement, dragging the market down with it. Guess some bummed investors got up from their seats.

Don Bezos to shareholders: "_Please. Take a seat._"

Spend

__Profiting from a disaster is a bad look...__ and Amazon doesn't want to look like it's doing that, especially since its sales surge was clearly related to the pandemic. For Amazon, the way customers and employees perceive it in the long run is more important than a few billion in profit. That's why Amazon went on to list 34 [bullet points](https://ir.aboutamazon.com/news-release/news-release-details/2020/Amazoncom-Announces-First-Quarter/default.aspx) about everything it's doing to help employees, customers, and communities. It chose PR over profits. 

Amazon sales soar, but shares plunge as Bezos puts good PR and worker health over profits

- __Biggest non-shocker of the year...__ You wouldn't have imagined it in 2019, but by now even your salamander knows that __[Clorox](https://robinhood.com/stocks/CLX)__ is crushing it. Sales jumped a lemon-scented  15%, Clorox's [biggest](https://www.reuters.com/article/us-clorox-results/bleach-boom-lifts-clorox-outlook-after-best-sales-growth-in-a-decade-idUSKBN22D58B) quarterly sales jump in ten years. Cleaning products jumped 32% on their "*99.9% of germs*"-killing prowess. But what shocked investors is how Clorox even raised its economic forecast for the year — it thinks obsessive germ-quashing isn't a fad, but a long-term behavioral shift. 

- __Team(s) work makes the dream work...__ __[Microsoft's](https://snacks.robinhood.com/newsletters/CkefbR2DiPaJdPUSjXZTO/articles/7Lb4yOwRykxuFULX1h4HBR/)__ last quarter was [barely](https://snacks.robinhood.com/newsletters/CkefbR2DiPaJdPUSjXZTO/articles/7Lb4yOwRykxuFULX1h4HBR/) affected by the corona-conomy (if anything, they got a boost). Investors couldn't hear anything but the deafening sound of Microsoft's cloud success and 22% pop in profit. Remote collaboration tool Microsoft Teams was the belle of the earnings ball: daily users soared 70%, from 44M in mid-March to 75M at the end of April. Oh btw — Teams has video conferencing built in, so it's now coming for __[Zoom](https://robinhood.com/stocks/ZM)__'s head, which it basically calls a one-trick pony. 


- __I'm blue, Da-ba-dee, A-di-das...__ Stan Smith legend __[Adidas](https://robinhood.com/stocks/ADDYY)__ saw its profits fall [*96%*](https://www.cnbc.com/2020/04/27/adidas-q1-2020-earnings.html) last quarter — the sportswear brand blamed the fact that 70% of its global stores were shut. According to Adidas' CEO, sales abruptly fell off a cliff mid-March. A 35% jump in online sales wasn't enough to offset massive in-store losses — Now Adidas predicts sales will plunge another 40% over the next 3 months.

- __Not the good kind of burn...__  Plane-making giant __[Boeing](https://robinhood.com/stocks/BA)__ burned through $4.7B last quarter, as coronavirus losses and 737 Max issues continue to widen the gap between how much money it's shelling out (a lot) and how much it's bringing in (not much). It only delivered 50 planes, compared to 149 during the same period last year. And Boeing still has big bills to pay each month — that's why it just raised [$25B](https://www.forbes.com/sites/jeremybogaisky/2020/05/01/boeing-25-billion-debt/#319f6b7841f8) in debt on top of the $15.5B in cash it already had. It's eager to prove to investors that it won't have a layover in Chapter 11 bankruptcy.


🎤 Amazon picks good *PR* over profits 

__Congratulations, it's a profit!..__ __[Tesla](https://robinhood.com/stocks/TSLA)__ cutting its earnings reveal cake. The electric car icon made investors smile after posting its 3rd straight quarter of profitability (its longest streak ever), despite corona-related production disruptions like the shutdown of its key Shanghai and Bay Area factories. Tesla can thank a combo of cost cuts + sales bumps for that:

- __[+32%](https://techcrunch.com/2020/04/29/tesla-turns-q1-profit-on-cost-reductions-rising-car-margins-credits/):__ How much Tesla's sales increased compared to first quarter 2019.
- __-13%:__ The drop in Tesla's operating expenses compared to 2019. 
- __$16M:__ Tesla's __profit__ on $6B in sales —  it *lost* $702M during the same quarter last year.
- __25.5%:__ Tesla's [gross margin](https://learn.robinhood.com/articles/2jlpKewku8iEaalz6xrKna/what-is-profit-margin/) (how much sales $$$ it actually keeps after expenses) — up from 20.2% last year. 


__PR's having whiplash...__ Tesla's PR team barely had 5 minutes to bask in this post-earnings glow when Elon decided to leave no doubt about where he stands vis-a-vis lockdowns (this all happened mid-earnings call, btw). Spoiler: he *hates* them. 

- __"[Forcibly imprisoning](https://www.cnbc.com/2020/04/29/elon-musk-slams-coronavirus-shelter-in-place-orders-as-fascist.html)"__ — What Elon thinks the gov-sponsored lockdowns are doing (against people's constitutional rights). He called enforceable orders to stay at home "fascist."
- __"[Dumb](https://twitter.com/elonmusk/status/1236029449042198528)"__ — What Elon called the coronavirus panic back in early March.  He also [predicted](https://www.npr.org/2020/04/29/848093173/teslas-elon-musk-rants-again-calls-lockdowns-forcible-imprisonment-and-fascist) there would "probably" be "close to zero" new US COVID-19 cases by end of April.
- __"A serious risk"__ — Musk is worried that Tesla won't be able to resume operations at its major factory in the SF Bay Area. In March, Elon [defied](https://www.foxbusiness.com/markets/tesla-defies-california-shelter-in-place-order-keeps-factory-open) state-wide lockdown orders to keep the plant open (but was later  compelled to shut it down). Now the Bay Area has [extended](https://techcrunch.com/2020/04/27/stay-at-home-order-for-7-million-bay-area-residents-extended-to-end-of-may/) its stay-at-home order through all of May.

_A member of Tesla's PR team_

Earn

__Two sides of the "end corona-conomy" debate...__ The more publicly touted, less media-stirring position is that current lockdowns are necessary until COVID-19 infection rates fall more. __Facebook__'s Zuck [is worried](https://www.nytimes.com/2020/04/30/business/dealbook/musk-zuckerberg-coronavirus-lockdown.html) reopening too fast will lead to future outbreaks and worse health/economic consequences. Then there are biz leaders like Elon who believe the biggest threat is the actual effect of the locked down economy (rather than the virus). Zuck vs. Musk. 

Tesla makes a (surprise) profit, Elon makes a (surprise?) outburst — A Tale of Two Outlooks

__Don't call it soft...__ The world's most valuable publicly-traded company, __[Microsoft](https://robinhood.com/stocks/MSFT)__, just revealed extra strong quarterly earnings. Success in its high-flying cloud biz offset corona-related losses (like interruption of Surface laptop/tablet production). The OG software star seemed to barely feel any pandemic business pain at all. *Au contraire...*

- __Sales jumped [15%](https://www.wsj.com/articles/microsoft-earnings-jump-aided-by-cloud-computing-demand-during-pandemic-11588192187)__ to __$35B__ and profits came in at a thick $11B — that's [22%](https://www.axios.com/microsoft-earnings-coronavirus-6651f6d7-6d7d-4016-bff9-a79735152c48.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosmarkets&stream=business) more profit than what Microsoft squeezed out of the same quarter last year.



__Just crushed earnings, BRB...__ Have to go crush my rival now. Microsoft’s remote workplace tool, Teams, has been referred to as a less-sexy version of __[Slack](https://robinhood.com/stocks/WORK)__. But Teams DGAFs because its daily users __jumped 70% from 44M in mid-March to [75M](https://www.wsj.com/articles/microsoft-earnings-jump-aided-by-cloud-computing-demand-during-pandemic-11588192187) today__. On 1 day in April, a whopping 200M people were logged into Teams. And Teams' new enemy isn't Slack... it's __[Zoom](https://robinhood.com/stocks/ZM)__: 

- __“Teams is not just about having lots and lots of video meetings...”__ it's about "actually getting work done where meetings and video is one part" —  Microsoft's CEO [threw down](https://venturebeat.com/2020/04/29/microsoft-teams-passes-75-million-daily-active-users/) this (not so) subtle shade at Zoom. 
- "__Videoconferencing is not enough__": What Microsoft wants Zoom to know — Teams offers video, but also a bunch of other collab functions.

Microsoft to Zoom: "You are not enough"

Thrive

__"One & Only" companies have weaknesses...__ "One & Only" companies like Zoom do just 1 thing really well. But a "One & *Many*" company like  Microsoft can offer better integration with its existing products (think Word/Excel/PowerPoint and a broader suite of services to scale. Unless a company is a just-born young startup, it's more likely to go with a familiar option like Microsoft long-term over Zoom's single-product. 

Microsoft crushes earnings — now it's ready to crush an unlikely competitor

🚗 Tesla's profit, Elon's outburst

__Grab the popcorn...__ Things are getting spicy between __[AMC Theaters](https://robinhood.com/stocks/AMC)__ and __[Comcast](https://robinhood.com/stocks/CMCSA)__'s Universal Pictures. Yesterday we [talked](https://snacks.robinhood.com/newsletters/3KIfGk8MK4PAq1ROwcvC7x/articles/3diWOghGensK1l7I1zoR5e) about the unexpected triumph of the *Trolls World Tour* movie, and how it could change "movie math" forever: 

- __Because of theater closures,__ Universal released its Trolls sequel directly to streaming services, instead of respecting the usual [75-day](https://www.theverge.com/2020/4/29/21241463/regal-amc-universal-trolls-world-tour-vod-streaming-warner-bros-disney) "theatrical window." 
- __Universal made more $$$__ on 3 weeks of the sequel's online rentals (for $19.99) than it did *after 5 months of the original Trolls' theater release* (theaters take a bigger cut than streamers). 

__Who knew Trolls could cause so much drama?...__ NBCUniversal CEO Jeff Shell was *so thrilled* with the digital success that he [said](https://www.cnn.com/2020/04/28/media/trolls-world-tour-universal-amc/index.html) Universal will release movies in both theaters *and* digital when theaters reopen. AMC, the world's [largest](https://www.hollywoodreporter.com/news/amc-theatres-refuses-play-universal-films-wake-trolls-world-tour-1292327) movie theater chain, was not about it (at all) — So its CEO wrote an aggressive open letter:


- __Charm:__ It started with that, with the letter addressed to "Dear Donna" — then it went from passive aggressive to aggressive.
- __The Indignation:__ AMC's CEO called Universal's decision to cut out theaters in the future "categorically unacceptable." So...
- __The Strike:__ *"Effective immediately AMC will no longer play any Universal movies"* in any of its theaters around the world.
- __Plus:__ "Any movie maker who unilaterally abandons current windowing practices" will be subject to AMC's wrath. Wowza.  


_Oh, it's on..._

Watch

__Pre-emption is key...__ AMC struck fast and hard against normalization of the one thing that could destroy its biz forever: digital releases. Movie theaters aren't in the strongest position right now — but they can set expectations ASAP. Regal Cinemas also [warned](https://www.theverge.com/2020/4/29/21241463/regal-amc-universal-trolls-world-tour-vod-streaming-warner-bros-disney) Universal to respect the theatrical window. Now Universal is backtracking, [saying](https://www.cnn.com/2020/04/28/media/trolls-world-tour-universal-amc/index.html) it "absolutely" believes in the theatrical experience and AMC misunderstood. 

Trolls, the sequel: AMC (aggressively) strikes back against Universal

__A double, wouble-whammy...__ __[Boeing](https://robinhood.com/stocks/BA)__'s dealing with it. The plane-making giant posted its 2nd consecutive quarterly loss and burned [$4.7B](https://www.wsj.com/articles/boeing-cuts-workforce-production-in-response-to-coronavirus-11588162409) in 3 months. Last year, Boeing enjoyed positive [cash flow](https://learn.robinhood.com/articles/1QCiYedr0qDRD2EoXHJuI5/what-is-cash-flow/) — more $$$ was coming in than out. But to start 2020 it burned a $4.7B-sized hole. Investors were actually *relieved* — given Boeing's 2 major issues, they were expecting losses to be even worse:

- __Coronavirus:__ Airlines aren't ordering planes because nobody's flying. Boeing's plane deliveries dropped [66%](https://finance.yahoo.com/news/boeing-earnings-coronavirus-737-max-220222327.html) this quarter, from 149 last year to just 50 this year. 
- __737 Max:__ The disastrous plane model was grounded after 2 crashes and now drains Boeing's wallet, piling up in billions of losses (picture hundreds of planes stuck in a parking lot). 

__Feeling the (cash) burn...__ Spending more than you make is not sustainable forever. The more cash you burn each month, the quicker your cash pile is going to run out. 

- __Like people, companies have expenses__ that they have to pay each month, even if they're not bringing in any money. Think rent, debt payments, and "keep-the-lights-on" expenses. 
- __Boeing is kind of like someone who got laid off,__ but still has to pay rent, food, and utility bills. That's why it ditched dividends and is now cutting [10%](https://www.cnn.com/2020/04/29/business/boeing-loss-staff-cuts/index.html) of its 161K employees.

_Wondering if the cash runway is long enough_

Burn

__Cash is the difference between surviving and flopping...__ At least in the corona-conomy. Boeing still has it better than most corona-hit companies: it's got $15.5B in cash and a $9.6B credit line (aka some runway to survive). Plus, as America's 1 big commercial plane manufacturer (and the [2nd largest](https://www.wsj.com/articles/airbus-focuses-on-cash-in-crisis-but-positions-to-out-distance-boeing-11588156918) on Earth), Boeing is too important for the US gov to let it sink. Small businesses won’t be so lucky if they run out of cash. 


Boeing's got a big cash burn problem — but it's still better off than many corona-hit companies

__"Every day now looks like the weekend”...__ Dope [quote](https://www.theverge.com/2020/4/29/21240953/spotify-q1-2020-earnings-coronavirus-covid-19-morning-listening-habits-change-ad-revenue-down) straight out of __[Spotify](https://robinhood.com/stocks/SPOT)__ corporate. Because of WFH, lockdown life has all but erased commuting habits — so our listening habits have changed too:

- __Podcast listening is down,__ especially in cars and on smartwatches. Buuut — Spotify listening through TVs and game consoles is up more than __50%__. Despite the dip, Spotify didn't lose any paid subscribers or monthly users. In fact...
- __Spotify grew its paid subscribers by [31%](https://qz.com/1736762/spotify-grows-monthly-active-users-and-turns-profit-shares-jump-15-percent/)__ since last year — it now has [286M](https://www.wsj.com/articles/spotify-adds-subscribers-lowers-revenue-guidance-amid-ad-pullback-11588154575) monthly users (some on the free version) and __[130M](https://www.wsj.com/articles/spotify-adds-subscribers-lowers-revenue-guidance-amid-ad-pullback-11588154575) paying  subscribers__. The result was a fresh __$490M profit__ (its 2nd ever). 

__Same biz, different biz model...__ Spotify and __[Netflix](https://robinhood.com/stocks/NFLX)__ are both content streamers with monthly subscriptions that cost roughly the same price. And they're both relieved that they haven't been hit by the corona-conomy. But unlike Netflix...

- __Spotify doesn't own/create much of its content__ — the record labels do. So Spotify has to share revenue with companies that rep the musicians in your playlist. 
- __Spotify has a free version supported by ads__ — that makes it more vulnerable to the ad-pocalypse: its ad sales dropped 32% since last quarter. Still...

_Weekend vibes over at Spotify_

Listen

__Spotify has no reason to play "sad vibez" playlist...__ Despite a few pandemic-related hiccups, Spotify's 1 key metric (paid subscribers) is looking good: paid subscribers grew 31%, which is better than last quarter's 29% growth — and that's what investors are looking at. Spotify's stock soared 12% on the earnings beats. 