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

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

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


Interesting

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


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

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

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

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


_The RealReal smells a fake Birkin_

Fashun

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


The RealReal is still deeply unprofitable, but it's splurging on physical retail

Dow Jones

S&P 500

Nasdaq

Bitcoin

☎️  What's going on with tech stocks? 

__The LinkedIn of gig work...__ might actually be LinkedIn? __[Microsoft](https://robinhood.com/stocks/MSFT)__-owned LinkedIn is launching a gig marketplace called "Marketplaces" (#creative), [according](https://www.theinformation.com/articles/microsofts-new-gig-a-linkedin-freelancer-market-rivaling-upwork-fiverr) to *The Information*'s PFWTM. "Gig" elicits thoughts of delivery drivers, but Marketplaces is targeted to white-collar pros (like: app developers, marketers, and designers). Users will be able to book freelancers straight through LinkedIn. 

- __Marketplaces is slated to launch this fall__, and is expected to replace LinkedIn's $60/month ProFinder service (a skeletal version of Marketplaces).

__"I just came across your profile"...__ The pickup line of professional networking. It's a good time for LinkedIn to beef up its gig offering: ~10M Americans are unemployed, and many are WFH freelancers looking for gigs. Part-time is the new full-time: the number of gig/contract/freelance workers is expected to [triple](https://www.ft.com/content/92c6d068-384e-11ea-ac3c-f68c10993b04) to 42M this year from 2017. 

- __With its massive network of ~740M users,__ LinkedIn has a leg up over freelance sites like __[Upwork](https://robinhood.com/stocks/UPWK)__ and __[Fiverr](https://robinhood.com/stocks/FVRR)__, which generated a combined ~$550M in sales last year. They take a cut  when people get hired. BTW: both stocks plunged yesterday on the Microsoft report.
- __Marketplaces could be a triple whammy sales puppy:__ More ad sales + more subscription sales + *a cut of hiring transactions*. LinkedIn's huge reach poises it to capitalize on the hot gig market. 

Connection

__LinkedIn is the most mature social network...__ because it's the most diversified. __[Facebook](https://robinhood.com/stocks/FB)__, __[Snapchat](https://robinhood.com/stocks/SNAP)__, __[Twitter](https://robinhood.com/stocks/TWTR)__, and __[Pinterest](https://robinhood.com/stocks/PINS)__ each make more than 90% of their sales from pure ads. LinkedIn makes $$$ from business subscription services (like Sales Navigator), ads for job postings, and LinkedIn Premium (for shameless stalking in private mode). In 2020, it made ~$8.8B in revenue. For reference: that's more than double Twitter's yearly sales, but it's a small fraction of Microsoft's $143B 2020 total. Marketplaces could help it level up. 

LinkedIn is reportedly launching a gig-work marketplace (it’s so mature)

__Blimp-worthy news...__ Yesterday, investors received an invite to the biggest tire wedding in America: __[Goodyear Tire & Rubber](https://robinhood.com/stocks/GT)__ has [agreed](https://www.bloomberg.com/news/articles/2021-02-22/goodyear-agrees-to-buy-cooper-tire-for-about-2-8-billion?sref=q3KSFp38) to buy __[Cooper Tire & Rubber](https://robinhood.com/stocks/COO)__ for $2.8B (conveniently, they have the same last name). It's like the Royal Wedding, but for tires: Goodyear is the largest tire manufacturer in the US, and Cooper is #2. Investors celebrated the power couple:

- __Cooper stock soared 29%__, since Goodyear will pay Cooper shareholders a cash and stock premium  (worth [24%](https://corporate.goodyear.com/en-US/media/news/goodyear-to-acquire-cooper-creating-stronger-us-based%20leader-in-global-tire-industry.html) more than Cooper's closing stock price on February 19th). 
- __Goodyear stock jumped 21%__, since investors think the merger will boost sales and cut costs (#synergy). The deal also strengthens Goodyear's position as #1 in the US, and nearly doubles its presence in China (where car sales are surging again).

__Strength in unity...__  and in cost synergy. The happy couple will shave spend by combining corporate functions, R&D, and procurement. Goodyear expects to save $165M over two years from the merger. No manufacturing jobs or plants are being scrapped... *for now*. But the couple sees an opportunity to combine  production in the future. If approved by Cooper shareholders and regulators, the marriage will be finalized later this year.


_Ready for the Royal Tire Wedding_

Tired

__Scale is key...__ to succeed in a commodities-heavy business. Tires are basic products made of basic commodities: rubber and steel. While you might have a preference between iPhone 12 and Samsung Galaxy S21, tires don't have as many differentiating features/components. So companies compete on price. With this marriage, Cooper and Goodyear can join forces to scale production — instead of trying to beat each other. But we don't yet know how/if this will affect prices for consumers.

The Royal Tire Wedding: America’s largest tire companies tie the rubber knot

🖼  LinkedIn does freelance

__Hair oils are thriving...__  __[Walmart](https://robinhood.com/stocks/WMT)__ posted record sales of $152B last quarter, as we stocked up on groceries and #selfcare goodies. In 2020, Walmart filled *7X* more online orders than in 2019 (curbside pickup FTW). But it's projecting slower growth *this* year, so the stock dipped after last week's earnings. What didn't dip: wages.

- __Walmart is raising wages for 425K workers,__ bumping its employee average to ~$15/hour (up from $14). *But it's keeping its starting wage at $11*.
- __Walmart = America's largest private employer.__ With the raises, about half of its 1.5M US workers will earn at least $15/hour. 

__Sounds familiar...__ The Biden admin is trying to raise the federal minimum wage to $15/hour by 2025 (from $7.25/hour). It's [questionable](https://ktla.com/news/nationworld/biden-acknowledges-dim-prospect-of-15-minimum-wage-in-congress-raising-concerns-among-activists/) whether that'll get through lawmakers. A Congressional study [found](https://www.cnbc.com/2021/02/01/democrats-are-trying-to-pass-a-15-minimum-wage-through-reconciliation.html) that a $15 minimum wage would lift 1.3M Americans out of poverty. The *same* study found it may also leave 1.3M jobless because of higher labor costs. This month, Walmart CEO Doug McMillon met with Biden: McMillon supports raising the federal minimum wage, but hasn't yet endorsed a $15/hour minimum. Still...

- __Walmart has to compete__ with its peers for essential workers, especially in online-order fulfillment roles. That's why the raises are only for frontline associates. 
- __[Amazon](https://robinhood.com/stocks/AMZN)__ (aka: Walmart's biggest rival) raised its US starting wage to $15 back in 2018, and has lobbied Congress for a $15 federal minimum. __[Target](https://robinhood.com/stocks/TGT)__ made $15 its starting wage for all workers in 2020. Why isn't Walmart doing the same?

__Profit margin could be a factor...__ explaining Amazon's and Walmart's different stances on wages. Amazon's biz is mainly online, making it more cost-friendly than Walmart's (which includes 11K+ physical stores). Also: groceries make up more than half of Walmart's sales, and they're harder to profit from than tech. While broccoli has a slim profit margin, Amazon's AWS cloud is its biggest profit puppy.  Walmart did more sales in 2020 than Amazon, but its profit was much *smaller* than Amazon's: on $520B in sales, Walmart made $15.2B in profit — on $386B in sales, Amazon made *$21B* in profit. Walmart's biz is more sensitive to wage increases, but it needs them to compete with the 'Zon. 

Walmart raises wages for 425K employees, but it probably won't outdo Amazon

__You used to ping me on my cell phone...__ Cloud company __[Twilio](https://robinhood.com/stocks/TWLO)__ helps *other* companies talk to customers (think: text notifications, emails, support calls). Twilio's 221K customers [include](https://snacks.robinhood.com/newsletters/6SuaBO3rrBO6Jk36GEj3oC/articles/ZDMeTAELMugKjh7xmTgWK/) Uber, Instacart, DoorDash, and Netflix (all those password reset emails). It's a good time to be in remote comms: Twilio shares jumped after it reported expectation-crushing earnings on Wednesday (feat. a surprise adjusted profit). Both sales *and* customer growth accelerated from the previous quarter, and revenue jumped 65% from 2019.

__The Tractor Factor...__ __[John Deere](https://robinhood.com/stocks/DE)__ stock soared to a fresh record last week on killer earnings. Last quarter, Deere's profit more than doubled from 2020 as farming and construction perked up. Sales popped 23%, partly thanks to an efficient new operating strategy. The construction icon could benefit from President Biden's "Build Back Better" plan, which pledges to mobilize American manufacturing for a modern infrastructure (think: roads, bridges, buildings). Deere boosted its forecast for 2021, expecting greener pastures ahead.

Highs

Who's up...

__*Homeland*'s favorite stock...__ __[Palantir](https://robinhood.com/stocks/PLTR)__ is the secretive software company that crunches data for big clients like intelligence agencies. Since [going](https://snacks.robinhood.com/newsletters/5v5XVtc1gTDCrGNZIuANTa/articles/4melLm5tbEOhCjxLIJrNEi/) public in October, Palantir has been a little less mysterious (at least, its finances have): shares plunged 9% for the week after Palantir reported a $148M loss for last quarter — and $1.2B for the full year. Still, average revenue *per customer* was a whopping $7.9M last year. 2020 sales beat expectations, as Palantir won contracts with the US Army, the Air Force, and the FDA (and they probably didn't even get a free trial).

__Up, in a bad way...__ US jobless claims [hit](https://www.bloomberg.com/news/articles/2021-02-18/u-s-initial-jobless-claims-unexpectedly-rise-for-a-second-week?sref=q3KSFp38) a four-week high of 861K for the week ended February 13th, rising for the second week straight. Despite a steady drop in Covid cases as vaccines roll out, ~10M Americans are still unemployed. And the pace of recovery is slowing: in January, the US economy added just 49K jobs. Investors are looking forward to more help from Uncle Sam. Dems are on track to (narrowly) pass President Biden’s $1.9T stimulus package, which includes boosted unemployment aid and $1.4K payments to most Americans.

Lows

...and who's down

_Heavy cart, slim margin_

💵 Walmart, Amazon, and the minimum wage 

__No more doom-scrolling?...__ Last year, Australia proposed a bill to address power imbalances between the news media and digital platforms (read: __[Google](https://robinhood.com/stocks/GOOG)__ and __[Facebook](https://robinhood.com/stocks/FB)__). The solution: force Google and FB to pay news outlets for displaying and linking to their content. The proposed law is expected to pass next week.

- __Google responded__ by making payment agreements with Australian publications, including News Corp. 
- __Facebook responded__ by *banning news in Australia*. This week, FB announced that it'll no longer allow Australians to share or view news content. Woah.

__Stick to the baby panda videos...__ and forget the breaking news on the Vegemite shortage. FB has banned all news-related links in Australia, *including* stories from international publishers. Also: FB users worldwide can't share or view news stories from Australia. The aggressive move could backfire if users see it as a dangerous threat to free expression. For now, it's mainly bad news for publishers:

- __Hot off the press:__ News outlets used to make $$$ selling papers filled with ads. When everything went digital, so did their ads. But Big Tech ads attract much more spend since they're targeted and have wider reach.
- __Hot off the feed:__ In 2019, 52% of Americans got their news on Facebook. And FB got all the $$$ from the surrounding ads. But Facebook says publishers shouldn’t complain, because FB drives traffic to their sites.


Checkmate

__This could be *convenient* for Facebook...__ By rejecting Australian news, it's setting a money-saving precedent. *But it's also embarking on a nationwide experiment*. FB has received massive heat for circulating polarizing content and fake news. CEO Mark Zuckerberg recently said that people don't want politics to take over their feeds. In Australia, FB has the chance to run a no-political-news experiment. If "no news" boosts earnings or user happiness in Australia, FB could expand it. If it hurts ad sales or engagement, FB might pull a Google and pay up.


Facebook bans news in Australia: a convenient "no politics" experiment?

__First, the primer...__ The BLM movement put a renewed spotlight on racial discrimination in many areas of society, including the beauty industry. Beauty companies have a history of marginalizing communities of color through non-inclusive marketing and products. In the past year, companies like __Estee Lauder__, __L’Oreal__, and __Unilever__ have been [criticized](https://www.theguardian.com/fashion/2020/sep/02/estee-lauder-reviews-skin-lightening-lines-amid-black-lives-matter-anger) for marketing “skin-lightening” products. LVMH-owned Sephora has been [accused](https://www.bloomberg.com/news/articles/2021-01-13/fewer-guards-more-black-brands-sephora-s-plan-to-win-back-shoppers) of racial bias in stores — including instances of associates not being able to do “dark makeup” for women of color. Recently, beauty retailers have started taking steps to improve inclusivity:

- __Ulta__ pledged to double its assortment of Black-owned brands in 2021. __Sephora__ pledged to increase its Black-owned brands from eight to 16 this year (out of its total ~300). And both are expanding employee training to fight unconscious bias. 
- __Sephora__ also signed the [15% Pledge](https://www.15percentpledge.org/pledged), which calls on retailers to work toward committing at least a population-proportional 15% of their shelf space to Black-owned brands.

__Building a foundation...__ In 2017, Rihanna’s makeup brand __Fenty Beauty__ was hailed as groundbreaking for releasing 40 foundation shades. Many of its darker shades sold out in days. That success [led](https://www.racked.com/2018/5/30/17409524/fenty-effect-foundation-40-shades) to the “Fenty Effect”: Big brands like __Dior__ and __CoverGirl__ followed, launching 40 foundation shades each. But a December 2020 [study](https://www.sephora.com/contentimages/belong/january2021/Sephora_RacialBias_eBook_DES_12-23-20_V12%20(1).pdf) from Sephora shows there’s still much left to be done: 

- __3 in 4__ retail shoppers feel that marketing fails to showcase a diverse range of skin tones, body types, and hair textures.
- __2 in 3__ shoppers think stores fail to deliver an equally-distributed assortment of products for different tastes and preferences.
- __2 in 5__ US shoppers have experienced unfair treatment on the basis of their race or skin tone.


__Beauty brands have a major opportunity...__ to foster inclusivity, help break down societal biases, and cater to an underserved market. In 2017, African Americans spent considerably [more](https://www.nielsen.com/us/en/insights/article/2018/black-impact-consumer-categories-where-african-americans-move-markets/) money in the general beauty marketplace than other groups. Black spending power in the US is expected to hit $1.5T by 2021, and is projected to grow significantly in the years ahead. Black consumer choices also have a halo effect that [influences](https://www.nielsen.com/us/en/insights/article/2018/black-impact-consumer-categories-where-african-americans-move-markets/) mainstream tastes. Addressing racism and catering to Black consumers is key to brands’ success. It’s also an opportunity for beauty companies to move the industry and its standards forward. 


Beauty brands pledge to be more inclusive, but there’s still a long way to go

_The new newsfeed_

🗞  Facebook says "no news, friends"

__To infinity, and Elon!...__ Never gets old. Elon Musk's __SpaceX__ has raised $850M in fresh funding at a ~$74B valuation, [according](https://www.cnbc.com/2021/02/16/elon-musks-spacex-raised-850-million-at-419point99-a-share.html) to CNBC's "people familiar with the financing" (#PFWTF). The privately held rocket company was last valued at $46B in August. In May, SpaceX became the [first](https://www.ft.com/content/e3deff5d-4c55-4e6b-a3e8-e6b5fa6ff162) private company to launch humans into orbit. 

__Starlight, Starlink...__ SpaceX's rockets get most of the love, but its Starlink satellites are pretty cool, too. Starlink: SpaceX's project to build a constellation of ~12K high-speed internet satellites in low Earth orbit. Elon said that Starlink will eventually spin off into a public company.

- __The status:__ Starlink has launched 1K+ satellites so far, and is rolling out a public beta in North America and the UK (it already has [10K+](https://www.cnbc.com/2021/02/16/elon-musks-spacex-raised-850-million-at-419point99-a-share.html) users). It's also [accepting](https://www.cnbc.com/2021/02/09/spacexs-starlink-accepting-99-preorders-as-musk-considers-ipo.html) $99 preorders.
- __The cost:__ SpaceX estimated that Starlink will cost ~$10B to build out — or [5X](https://www.cnbc.com/2019/05/20/spacex-revenue-2-billion-from-rockets-last-year-jefferies-estimate.html) its estimated 2018 rocket launch revenue.
- __The benefit:__ SpaceX believes Starlink could bring in as much as $30B a year (way more than its existing rocket sales).

_When you forget the Starlink WiFi code_

Elonder

__Starlink needs the Tesla playbook...__ to go mainstream. Starlink will [reportedly](https://www.cnbc.com/2020/10/27/spacex-starlink-service-priced-at-99-a-month-public-beta-test-begins.html) cost $99/month... *plus  $499 upfront* for the "Starlink Kit" (router included). When you compare that to the [~$55](https://www.highspeedinternet.com/resources/how-much-should-i-be-paying-for-high-speed-internet-resource) average cost for high-speed internet, it seems way overpriced. But Tesla cars were inaccessible at the beginning, too ([$109K](https://www.britannica.com/topic/Tesla-Motors) for its first model in 2008 — now it's making a [$25K](https://electrek.co/2021/01/08/tesla-25000-electric-car-coming-sooner-than-we-thought/) model). Tesla's first strategy was entering at the high end of the market with a premium product, and then lowering costs as it scaled production (see: [Elon's Master Plan](https://www.tesla.com/blog/secret-tesla-motors-master-plan-just-between-you-and-me)). Starlink is impractical and expensive today, but it could go downmarket tomorrow.


SpaceX reportedly hit a $74B valuation, but we're more interested in its Space WiFi

__Dire straits...__ Millions of Americans were left without electricity and heat as brutal winter storms continued to wreak havoc across the US. Texas was especially hard-hit, with [~2.7M](https://www.reuters.com/article/us-usa-weather/ice-everywhere-as-texans-wake-up-to-cold-2-7-million-homes-lack-power-idUSKBN2AH0S5) homes losing power, some for the third straight day. In total, [3.4M](https://apnews.com/article/100-million-americans-more-ice-snow-404012f8d8885259968b8d37b13899d6) US homes were still without electricity yesterday — and some also lost water. Businesses are getting frozen out, too:

- __Walmart__ closed more than 600 of its [~5K](https://corporate.walmart.com/our-story/our-locations#:~:text=Today%2C%20Walmart%20operates%20approximately%2011%2C500,for%20a%20nearby%20U.S.%20store%3F) US stores in the South and the Midwest. __CVS__ closed ~775 locations.
-  __FedEx__ and __UPS__ warned of possible nationwide delays, and USPS closed post offices and processing hubs in Texas, Alabama, and Mississippi.
- __GM, Ford, Toyota, Nissan,__ and others, suspended production at car-making plants from Texas to Indiana.

__No one was expecting this...__  Texas is used to hurricanes and tornadoes, but wasn't prepared for extreme temperatures. Neither was its power grid: Texas’ deregulated energy market doesn't incentivize operators to spend on preparing pipelines for a rare winter storm. Meanwhile, demand for heat-providing electricity and gas has soared, putting even *more* strain on the grid. 


__Emergency preparedness should be a full-fledged industry...__ Extreme weather has left Americans powerless multiple times in recent years. In 2017, there were hurricanes and floods on the Gulf Coast. In 2018 and 2020, there were wildfires on the West Coast. Extreme weather is becoming more frequent, so the emergency preparedness industry should bulk up. Companies like __Honda__, __Generac__, and __EcoFlow__, sell portable generators. And __Tesla__ sells (way pricier) home solar powerwalls for when the grid goes down. But if companies can provide an affordable package with all the disaster staples (including alternate power), they would be doing everyone a favor.


Millions of Americans are left without power (again): time for an EP industry

🚀  SpaceX feels a connection

__Lusting after the oceanside Colonial...__ __[Zillow](https://robinhood.com/stocks/Z)__'s last quarterly earnings were as steamy as the Zillow SNL [skit](https://www.youtube.com/watch?v=yEfsaXDX0UQ). Zillow is the real estate marketplace that helps you buy, sell, or rent homes. As homebound Millennials spent late nights in bed scrolling through condo listings: 

- __Record traffic:__ Zillow’s websites and apps racked up *2.2B* visits last quarter, up 27% from the previous year. 
- __Sweet sales:__ Zillow mainly makes $$$ by charging property management companies to advertise listings and selling "Premier Agent" services, like customer leads. In 2020, it made $3.3B in sales, up 22% from 2019.
- __Record stock price:__ Zillow stock soared to a record last week after it dropped the numbers. Shares have nearly 4X'd over the past year.

__Thank the House Hype...__ The Fed has given us near-zero interest rates to stimulate the economy. That led to mortgage rates notching more than a dozen record lows in 2020. Thanks to cheap loans WFH, home demand has skyrocketed. While marketing is still Zillow's main money maker, the home selling/buying segment is catching up:

- __Zillow uses its massive database on homes for iBuying__ — aka: making nearly instant cash offers on homes based on "Zestimates" (and cutting out the agent middleman). It charges sellers commission-like fees, and also profits on flipping homes it owns. 
- __Competitors [Opendoor](https://robinhood.com/stocks/OPEN) and [Redfin](https://robinhood.com/stocks/RDFN)__ started iBuying *before* Zillow, and their stocks are also at record highs. Unlike Zillow with its ad biz, they mainly make money on listing and commission fees.
- __BTW:__ iBuyers accounted for just 0.2% of all US home purchases in the third quarter of 2020 — but there's room to grow as technology continues to disrupt traditional real estate.


Homey

__Data at scale = power to scale...__ While Zillow is newer to iBuying, it has massive scale in terms of its data and traffic. Zillow has a database of 110M+ US homes out of ~139M total US homes, and 201M monthly visitors  (compared to Redin's ~40M). To become the Amazon of home sales in a low-inventory, capital-intensive market, robust data is key to calculating the best prices and turning a profit. 


Zillow hits a high on the scrollable House Hype, but can it become the Amazon of homes?

__V-Day date on the Nasdaq...__ So romantic. __[Bumble](https://robinhood.com/stocks/BMBL)__ stock popped 75% from its IPO price during the dating app's first three days as a public company. It's still not profitable, but says a higher percentage of its female swipers become paying customers than the market average. *But don't call it a dating app*: Bumble's [focused](https://snacks.robinhood.com/newsletters/4LDW0d4MZjMAGreq2aciNX/articles/5ZW2UYVZDhOiDHvv6RDsPv/) on expanding to platonic services like Bumble Bizz for career networking, and Bumble BFF for friend-swiping. If it can successfully monetize those, it could keep you even after you DTR — and potentially gain an edge over dating leader __[Match Group](https://robinhood.com/stocks/MTCH)__ (proud parent of Tinder and Hinge).

__Got me Lyfted, shifted...__ higher than the Hyundai Sonata ceiling. __[Lyft](https://robinhood.com/stocks/LYFT)__ shares jumped 9% for the week, after the ride-hailer revealed its net loss for 2020 shrank from 2019. Now it's aiming to make an (adjusted) profit by the end of 2021. __[Uber](https://robinhood.com/stocks/UBER)__ also reported a smaller annual loss thanks to Eats, which is bringing in more $$$ than rides — delivery bookings last quarter more than doubled from 2019. While rides are (slowly) recovering, Uber has an advantage over rides-focused Lyft.


__Quick comedown...__ Weed stocks soared at the beginning of last week on some canna-good news. First, __[Canopy](https://robinhood.com/stocks/CGC)__ said it expects to be profitable within a year (despite a big quarterly loss). Then, __[Tilray](https://robinhood.com/stocks/TLRY)__ landed a deal to distribute its medical marijuana in the UK — shares *doubled* in value from Monday to Wednesday. Reddit traders may have boosted the buying, potentially bullish on the possibility of federal marijuana decriminalization in the US. But the canna-rally quickly relented, and Tilray shares plunged a record 50% on Thursday. Canopy and __[Aurora](https://robinhood.com/stocks/ACB)__ also tumbled, closing lower for the week.

__Chip-outta-luck....__ Try Pringles? Automakers are hungry for chips to stick in their cars. ICYMI: __[GM](https://robinhood.com/stocks/GM)__ and __[Ford](https://robinhood.com/stocks/F)__ had to shut down plants this year because of a global chip shortage. Last week, GM [said](https://snacks.robinhood.com/newsletters/7Diuno0ArouMGsyNQkshkC/articles/3UpspR6Hfp00vXPger7WZh/) it expects lost production from the shortage to slash 2021 profit by $1.5B to $2B (Ford projects a similar L). GM shares dipped for the week, despite strong quarterly earnings and an upbeat profit outlook for 2021. Lucky for them, the White House is [working](https://www.wsj.com/articles/biden-administration-working-to-address-chip-shortage-affecting-automakers-other-industries-11613066609) to address the shortage. Expect an exec order from President Biden in the coming weeks.


_When the Zestimate is too good to be true_

🏡  Zillow scrolling > Insta scrolling

__*So relatable*...__ You don't need $20M and a yacht registered in the Maldives to invest with __[Goldman Sachs](https://robinhood.com/stocks/GS)__ anymore. The OG Wall Street firm just [unveiled](https://www.wsj.com/articles/goldman-sachs-to-offer-its-investing-know-how-to-the-masses-11613471402) "Marcus Invest," a robo-advisory platform that can get you started with $1K. For a small fee, customers can get their money robo-managed according to Goldman's investment strategies. The $$$ is allocated across stock and bond [ETFs](https://learn.robinhood.com/articles/QkpPOCYYd2fMe76837dvG/what-is-an-exchange-traded-fund/).  

- __It's all part of Goldman's push into mainstream banking__, which is seen as more stable/reliable than its riskier Wall Street trading biz (though the upside potential is lower).
- __In 2020__: Goldman made $1.2B in consumer-banking revenue, up 40% from 2019. But it's still a tiny fraction of Goldman's $44.6B *total* 2020 revenue. 

__Trading the AP for a Timex...__  Goldman has slowly been [expanding](https://snacks.robinhood.com/newsletters/8rq6xjStVvulqFP5BMmt0/articles/7It82ybTlEXso8l4CAMmVd/) its digital consumer banking suite "Marcus," which launched in 2016 with savings accounts and loans. Last year, it shipped an app and added financial insights. It also plans to launch checking accounts. Marcus Invest is the next step toward Goldman's goal of becoming the only banking app on your phone. But the competition is steep.

- __Thirteen years late:__ Goldman is lagging behind __Wealthfront__ and __Betterment__, which pioneered robo-advisory services in 2008. 
- __Dozens deep:__ Most big US banks and brokerages offer some type of automated-investing. And unlike delivery apps which can be easily switched, brokerage accounts tend to be "stickier."


_Microsoft trying to spend $50B_

Yachty

__The retail investor is too big to ignore...__ and big banks want in before it's too late. In 1975, the average fee to place a stock trade was [$49](https://www.wsj.com/articles/BL-MBB-36254) — and investment banks wouldn't pay much attention to you unless your net worth ended in "ion." The rise of commission-free trading apps, pioneered by __Robinhood__ (which owns Snacks), spurred  major brokerages like  __Vanguard__ and __Schwab__ to [cut](https://snacks.robinhood.com/newsletters/3nFFPd0MfjBs5AqG8088gu/articles/5YfrqB1klOSuz0H52tu48Z/) fees. The rest is history: during the first half of 2020, individual investors accounted for 19.5% of all trades, nearly [double](https://www.wsj.com/articles/individual-investor-boom-reshapes-u-s-stock-market-11598866200) from 2010. Now everyone from __JPMorgan Chase__ to __Citi__ has raced to offer retail investing — and Goldman is the latest.

Goldman Sachs launches wealth management for retail investors 

__Finding inspo in a Word Doc...__ feels almost as hard as __[Microsoft](https://robinhood.com/stocks/MSFT)__'s failed acquisition attempts. Last year, Microsoft was trying to buy TikTok’s US operations for a whopping ~$50B. Not only did it lose the bid, but the entire sale got scrapped indefinitely. *Last week*, we [learned](https://www.theverge.com/2021/2/11/22277845/microsoft-pinterest-acquisition-azure-cloud-services-rumors) that Microsoft reportedly tried to buy __[Pinterest](https://robinhood.com/stocks/PINS)__, which is valued at ~$51B. It would’ve been Microsoft's biggest acquisition ever. But it got shut down there *too*, [according](https://www.ft.com/content/f88b8474-e791-4efb-a9f6-54c8222680fe) to the FT. 

__These moves seem as random as Bing...__ which, BTW, Microsoft also owns. Besides Xbox and LinkedIn, which it bought in 2016 for $26.2B, Microsoft hasn't really ventured into the consumery social world. So why does it seem interested in social splurges?

- __Ads:__ The digital ad market is growing fast: __[Facebook](https://robinhood.com/stocks/FB)__, __[Snap](https://robinhood.com/stocks/SNAP)__, and __[Google](https://robinhood.com/stocks/GOOGL)__ all [reported](https://snacks.robinhood.com/newsletters/4xb7z6qlpUK2BEuIpPn3mA/articles/4KWjn4C3xdmPqHHyw5CmsG/) blowout earnings last quarter. Microsoft wants a slice of the pie to better compete with Google and __[Amazon](https://robinhood.com/stocks/AMZN)__ (Bing search ads aren't cutting it). 
- __Cloud(s):__ By acquiring hundreds of millions of users from TikTok or Pinterest, Microsoft would gain a massive base for its Azure cloud platform. FYI: LinkedIn is currently one of Azure's top 10 cloud customers. But...


Splurge

__Shopping might be the main reason...__ why Microsoft has eyed social apps. In 2019, Microsoft [launched](https://www.cnbc.com/2019/09/23/microsoft-launches-dynamics-365-commerce-taking-on-amazon.html#:~:text=Microsoft%20is%20rolling%20out%20technology,a%20constant%20battle%20with%20Amazon.&text=Retail%20is%20a%20particularly%20fruitful,Web%20Services%20in%20cloud%20infrastructure) a cloud commerce solution to help customers create online shopping experiences. It also bought ecommerce advertising startup PromoteIQ. By buying a company like TikTok, which has started [experimenting](https://techcrunch.com/2020/10/27/tiktok-invests-in-social-commerce-via-new-shopify-partnership/) with in-app shopping, Microsoft could make sure that sales happen *through its own cloud solutions*. It's a triple whammy of cloud growth, ad sales, and valuable customer data that positions it against Rival #1: Amazon. __[Etsy](https://robinhood.com/stocks/ETSY)__ could be a good next target. At $28B, it would be a relative steal for Microsoft.


Microsoft reportedly tried (and failed) to buy Pinterest — we're looking at why

🏦 You don't need a yacht anymore

__Love at first swipe...__ More like: love on first trading day. __[Bumble](https://robinhood.com/stocks/BMBL)__ saw its stock pop as much as 80% during its first day as a public company (#romantic). Shares of the female-focused dating app closed the day up 64% from their IPO price. And Bumble's 31-year-old founder and CEO Whitney Wolfe Herd became the youngest woman to ever take a company public. Women are Bumble's competitive advantage, in more ways than one: 

- __Women make the first move...__ In North America, Bumble has ~30% more female users for every male user compared to the gender mix of users in the freemium dating market.
- __Women make the cash move...__ A higher percentage of Bumble’s female users become paying customers than the market average. 
- __Not just Bumble__: Bumble also owns European dating app Badoo. Between the two, Bumble has ~42M monthly users and 2.4M paying users.

__*But don't call it a dating app*...__ Bumble prefers "preeminent global women's brand." In addition to Bumble Date: it also offers Bumble Bizz for career networking (think: swipeable LinkedIn), and Bumble BFF to connect with new friends (without benefits).  


_Bumble's date with the Nasdaq_

__Bumble wants you for life...__ not just for your "single and ready to mingle" stage. It's a notably different strategy than __[Match Group](https://robinhood.com/stocks/MTCH)__'s Hinge, which calls itself "the app that's designed to be deleted." To provide lifetime value post-DTR, Bumble is expanding into platonic categories. It's even planning to monetize BFF, Biz, and "other potential new categories." We're thinking "Bumble Bark" for dog-lovers.

Bumble goes on the market just in time for V-Day (but don't call it a dating app)

__Like tech Twitter, for audio...__ Nightmare fodder. Buzzy audio-based social network __Clubhouse__ recently [raised](https://snacks.robinhood.com/newsletters/18OQONWGOCQr3BPWg5Pk03/articles/283sRIWUhPjRonHb8qDpJa/) cash at a reported $1B valuation, 10X its valuation in May. Back then: the invite-only app had just 1.5K users and was almost exclusively filled with early investors, their friends, and tech bros. In less than a year, it has gained [5M](https://www.wired.com/story/gadget-lab-podcast-490/) users, mainstream appeal, and a potential Facebook [copycat](https://www.nytimes.com/2021/02/10/technology/facebook-building-product-clubhouse.html). That’s largely thanks to its community of Black users:

- __Since July, Clubhouse’s Black community has grown significantly.__ Black people are driving conversation through interest-focused clubs and community events. Think: Black in Tech, Black Beauty Club, and Black Bitcoin Billionaires. 
- __Black artists have been major growth drivers,__ with stars like Drake, Meek Mill, 21 Savage, and Tiffany Haddish hosting chats. Performances organized by Black creators, like the Clubhouse-rendition of *The Lion King*, have boosted downloads and maxed out chat “room” capacities. Highlighting the importance of Black artists to the platform: Clubhouse’s logo recently featured musician Bomani X, the host of a music-focused room on the app.

__Pull up the stats...__ Clubhouse isn’t the only social app whose growth was propelled by Black communities. In the early stages of __Snapchat__, __Vine__, and __Dubsmash__, Black people were [overrepresented](https://www.latimes.com/entertainment-arts/music/story/2021-02-01/clubhouse-app-hip-hop-black-creatives-billion-valuation) in usage — fueling mainstream adoption by making these apps cool, creative, and relevant. “Communities of color drive the cultural conversation and a lot of the initial wealth creation for apps like Clubhouse,” according Mercedes Bent, partner at Lightspeed Venture Partners. While Black communities drive growth, they don’t reap its financial benefits as much. That’s partly a result of:

- __Unequal access to funding:__ From 2015 to 2020, Black and Latinx founders raised ~$15B, just 2.4% of the total venture capital raised during that period. 
- __Lack of diversity in VC:__ Today, only [2%](https://www.blckvc.com/) of decision-makers at VC firms are Black. And in 2018, just 4% of VC employees were Black.


__Gatekeepers are key to greater inclusion...__ That's why VC firms like __Andreessen Horowitz__ and __[SoftBank](https://robinhood.com/stocks/SFTBY)__ have created funds geared towards BIPOC entrepreneurs. But VCs aren’t the only drivers of change: barriers to inclusion appear at much earlier stages than the VC pitch room, preventing people from becoming entrepreneurs in the first place. That includes the massive racial [wealth gap](https://snacks.robinhood.com/newsletters/bg6FaCgu8qc8z1Zllmofx/articles/3ZVsKmCRQNLUOSaAVHfNJi/), which limits access to loans, capital, and educational opportunities that drive innovation.


Black communities make new ventures relevant, but often miss out on wealth creation 

🐝 Bumble's IPO pop

__As thick as Jack Dorsey's beard...__ __[Twitter](https://robinhood.com/stocks/TWTR)__'s earnings. The little blue bird (apparently named Larry) just delivered 2020 results. It was a news-packed year, to say the least. As usual, Twitter served as the hub for current events convos. 

- __Last year:__ Twitter posted a $1.1B loss, compared to a $1.5B *profit* in 2019. Its yearly sales growth pales in [comparison](https://snacks.robinhood.com/newsletters/4xb7z6qlpUK2BEuIpPn3mA/articles/4KWjn4C3xdmPqHHyw5CmsG/) to __Snap__ and __Facebook__'s.
- __Last quarter:__ Sales jumped 28%, and profit nearly doubled from 2019, suggesting a recovery from the early pandemic ad dip.
- __Post-Trump:__ Twitter banned Trump's account a week *after* its most recent quarter ended. But its January usage was above average compared to recent years, and is expected to remain strong this quarter.

__Larry flying high...__ Twitter stock soared to a record high yesterday. The positive outlook soothed concerns that engagement would drop post-Trump-era. But investors might also be eyeing Twitter's 60-day shopping spree:

- __In December,__ Twitter [bought](https://techcrunch.com/2020/12/11/twitter-acquires-screen-sharing-social-app-squad/) screen-sharing social app __Squad__. The tech could allow users to host live video chats on Twitter, a la Zoom.
- __In January,__ Twitter [snatched](https://snacks.robinhood.com/newsletters/66eEsAltTmjRV2qtUGM2Qk/articles/jBOTGWl8iXG56NxQTMMPm/) up the team behind social podcasting app __Breaker__ to help with its new audio-based social "Spaces" (__Clubhouse__ vibes).
- __Also in January,__ Twitter acquired email newsletter startup __Revue__. Twitter plans to use it to allow people to sign up for content directly on Twitter. 


Fleet

__Twitter is focused on destroying friction...__ and bringing everything a creator needs into one app. Right now: you follow Bill Gates on Twitter, but get his Gates Notes newsletter on Gmail. You follow Elon Musk on Twitter, but attend his live chat on Clubhouse. You follow T Swift on Twitter, but watch her Live stream on Facebook. From newsletters, to live podcasts, and hosted video chats: Twitter wants to make sure that *Twitter* is the final destination for users and creators — instead of an app that redirects you to other platforms.  

Twitter just dropped earnings, but we're more interested in its recent shopping spree

__Get in the e-Hummer, we're going shopping...__ __[GM](https://robinhood.com/stocks/GM)__ stock has been cruising around all-time highs, thanks to its ambitious [plans](https://snacks.robinhood.com/newsletters/HQks7GDlIhzjFEeDazdjv/articles/77nznSEvhjPcvF1dvYL2Ee/) for an all-electric future (phase out gas-guzzlers by 2035). It also just [posted](https://www.wsj.com/articles/gm-earnings-beat-wall-street-estimates-11612961437?mod=hp_lead_pos5) strong quarterly earnings and an upbeat profit outlook for 2021. But GM has a big (tiny) problem: chips.

- __The Great Chip Shortage...__ is unrelated to Lay's, but makes auto makers hungry. The average car contains 50 to 150 chips. Problem: there's a global chip [shortage](https://snacks.robinhood.com/newsletters/31E6cwe7ndD6pM602Hiv9R/articles/3Nn6tVCu3oGQg2XsCbQmyc/). 
- __All the WFH'ing we've been doing devoured the chips.__ When US car sales [rebounded](https://www.cnn.com/2021/01/05/business/us-car-sales-recover/index.html) quicker than expected, car companies realized they hadn't stocked enough chips to meet demand. __[Ford](https://robinhood.com/stocks/F)__ had to [shut](https://www.cnn.com/2021/01/11/tech/ford-plant-shutdown-computer-chip-shortage/index.html) down a plant last month because it was chip-outta-luck.

__Seeing the chip bowl half-empty...__ Despite all the positive news surrounding GM, investors got hung up on its semiconductor problems. Yesterday, GM said it expects lost production from the chip shortage to erode $1.5B to $2B of its 2021 profit. That's about the same L that Ford is expecting to take. GM also plans to extend shutdowns at several of its American factories. 

- __Meanwhile...__  __[Tesla](https://robinhood.com/stocks/TSLA)__ has been using its *own* self-driving computer chip in some car models since 2019. Elon [claimed](https://www.bloomberg.com/news/articles/2019-04-22/musk-boasts-tesla-built-best-chip-in-the-world-drops-nvidia?sref=q3KSFp38) that the Tesla-designed chip is "the best in the world." Whoa.
- __But that doesn't mean it's immune (yet)...__ to the chip drama. Last month, Tesla said it's working hard to manage through the shortage, which may have a temporary impact.

Crunchy

__Car companies will have to become more like tech companies...__ to be successful in the future of electric, autonomous mobility. The competition is steep: GM's Cruise, __[Google](https://robinhood.com/stocks/GOOGL)__'s Waymo, Tesla, and even __[Apple](https://robinhood.com/stocks/AAPL)__, are all [working](https://snacks.robinhood.com/newsletters/bg6FaCgu8qc8z1Zllmofx/articles/69TIKhpJCGDMRD0UH2suPS/) on fully self-driving vehicles. The winner will likely be the car with the best self-driving brain. AI chips are *critical* to that. That's why Tesla, GM, and others, have joined the race for the best autonomous chip. Not only could it make them self-sufficient — but it also could give them the edge they need to stand out. 


GM will take a profit hit on the global chip shortage, while Tesla makes its own chip

_Elon flaunting his chip_

🐦 The Twitter rabbit hole intensifies 

__Call it a trilogy...__ The third of the "stimuli" is coming. In March 2020, we got a massive $2T rescue [package](https://snacks.robinhood.com/newsletters/CLl0evxvaKPwXSPACmU6C/articles/jtOWtkujqwVzIeEa8NYkj/) (feat. $1.2K checks for most Americans). In December, we got a $900B package to tide us over (feat. $600 checks). Now, Congress is closing in on a $1.9T stimulus. House Dems [released](https://www.wsj.com/articles/democrats-stimulus-plan-offers-1400-checks-at-same-income-levels-as-previous-rounds-11612823749) some  juicy deets yesterday:

- __$1.4K payments__ to individuals making up to $75K/year (and $150K for married couples). Payments get smaller after those thresholds, and individuals who make $100K+ get nada. 
- __$400/week unemployment__ insurance payments through August 29th.
- __ETA:__ The goal is to get this through the full House later this month (Congress is busy with Trump's impeachment trial).

__Why now...__ The stock market is at record highs thanks to low interest rates, strong tech earnings, and this upcoming stimulus. But the US economy isn't doing so hot: in January, the economy added only 49K jobs — and the unemployment rate barely budged, falling to 6.3%. That’s still a big improvement from April, when unemployment hit 14.7% after the US lost ~22M jobs. Buuuut...

- __10.1M Americans are still unemployed__, at a rate that’s nearly double pre-pandemic levels. This has [especially](https://fortune.com/2021/02/05/covid-unemployment-rate-january-jobs-report-2021-jobless-job-loss-us-economy-working-women/#:~:text=More%20than%202.3%20million%20women,labor%20force%20since%20last%20February.&text=The%20ongoing%20employment%20crisis%2C%20which,and%20other%20%22essential%22%20industries.) hurt women of color, who disproportionately work in "essential" industries. To make things worse...
- __The pace of recovery has slowed__ each month since June. And some of the improvement is coming from people *dropping out* of the labor force (they aren't counted as unemployed). 
- __2.3M+ women have dropped out of the labor force__ since February 2020, compared to ~1.8M men. Women’s labor force participation is at its [lowest](https://www.cnbc.com/2021/02/08/womens-labor-force-participation-rate-hit-33-year-low-in-january-2021.html) level since 1988, partly because of child care needs. 


_The Stimulus Trilogy_

Stim

__This is (hopefully) the final stretch...__ but it might be the longest and toughest in the road to recovery. It’s getting harder each month for the US economy to gain back jobs, and it could be even harder to bring back people who dropped out. And [GDP](https://learn.robinhood.com/articles/29d9WQgPq119raQYS1Wm6H/what-is-gross-domestic-product-gdp/) is taking a hit: the US economy shrank 3.5% in 2020, the largest shrinkage in 74 years. On the upside, GDP is expected to return to pre-pandemic levels by mid-2021 (thanks partly to stimulus spending). But employment isn’t [expected](https://www.wsj.com/articles/u-s-economy-expected-to-reach-pre-pandemic-peak-by-mid-2021-cbo-says-11612195200#:~:text=Gross%20domestic%20product%20is%20expected,through%202025%2C%20the%20CBO%20said.) to bounce back for several years.


What’s in the big $1.9T stimulus (and what’s in it for the economy)

__Adorable little alien robot...__ __Reddit__'s logo is cute, but its threads don't always fit that description. This year, Reddit has been at the center of a social-driven retail trading [frenzy](https://snacks.robinhood.com/newsletters/31odJOl6c3lLq4SuSoWt9z/articles/5ZO850evnEJXwTwEDdxKTk/). On Sunday, it made headlines again for spending its entire marketing budget on a five-second Super Bowl [ad](https://www.youtube.com/watch?v=_wkvH0qBMP8&feature=emb_logo) (inspired by the trading frenzy). Now it's making headlines for a different (but also likely related) reason:

- __Reddit raised $250M__, doubling its valuation to $6B from $3B in 2019. Reddit's fresh cultural relevance and an influx of new users lured VCs.

__Craigslist aesthetic...__ The internet has transformed since Reddit launched in 2005 — but Reddit has stayed true to the early 2000s vibes. That's fitting, since it thrives on being the dark horse of social media. Though Reddit and __[Facebook](https://robinhood.com/stocks/FB)__ were founded just one year apart, they couldn't be more different – especially in the eyes of advertisers: 

- __Design:__ FB gets a Millennial-friendly facelift every few years. Reddit is still sporting the text-heavy Craigslist look.
- __Identity:__  Redditors are anonymous, with obscure usernames and no headshots. FB makes you send 10 forms of ID to change your name.
- __Discoverability:__ FB is all about a single feed for following friends. Reddit loves interest-specific communities and hard-to-find threads.
- __Size:__ Reddit has 50M+ daily users. Facebook has 1.84B, including Instagram and WhatsApp.
- __Moderation:__ Facebook gets the brunt of regulatory and media scrutiny around moderation, and has hired thousands of reviewers. Reddit relies on user volunteers and is known for moderation-light policies.
- __Advertising:__ Facebook is basically a digital billboard (worth $84B in ad sales last year). Reddit is far from a powerhouse, with $100M in 2019 ad revenue. But that could change...


Thread

__With more funding comes more pressure...__ to cater to advertisers and make $$$ for investors. Reddit [said](https://redditblog.com/2021/02/08/fueling-reddits-future/) it's using some of its new funds to  grow its ad biz, and noted that ad sales jumped 90% last quarter from the previous year. But to *really* capitalize on its engaged communities and cultural relevance, Reddit will likely have to address some of its non-ad friendly traits — *and possibly become more like FB* (not necessarily a good thing). Most importantly, it'll have to revisit its laissez-faire moderation. Reddit has been [criticized](https://www.nytimes.com/2021/02/08/technology/reddit-raises-250-million.html) for [allowing](https://www.theverge.com/2018/4/11/17226416/reddit-ceo-steve-huffman-racism-racist-slurs-are-okay) racist/sexist/offensive dialogue on its platform. That could scare off marketers. 


☎️ What's going on with tech stocks?

🖼 LinkedIn does freelance

💵 Walmart, Amazon, and the minimum wage

🗞 Facebook says "no news, friends"

🚀 SpaceX feels a connection

🏡 Zillow scrolling > Insta scrolling

🏦 You don't need a yacht anymore

🐝 Bumble's IPO pop

🐦 The Twitter rabbit hole intensifies

💰 Stimulus round #3