__Cue the "high" jokes...__ __[Canopy Growth](https://robinhood.com/stocks/CGC)__, Earth's biggest cannabis company, whipped up a surprise Friday: Stronger-than-expected revenues and a smaller-than-expected loss. Sales were up [62%](https://www.canopygrowth.com/wp-content/uploads/2020/02/200213-CGC-Press-Release-Quarterly-DC-v1.pdf) from last quarter, and operating expenses were down 14%. That combo forms a soothing CBD balm on the bruised cannabis industry:

- __Canada's green wave:__ In October 2018, recreational weed was legalized nationwide in Canada, making Amsterdam feel Puritan.
- __The Willy-Wonka-moment investor dream:__ By early 2019, __[Aurora Cannabis](https://robinhood.com/stocks/ACB)__, __[Tilray](https://robinhood.com/stocks/TLRY)__, and __Canopy__ rocketed to multi-billion dollar valuations — everyone wanted to own a piece of the legal cannabis factory, which was expected to boom.
- __The buzzkill reality:__ Consumer demand [didn't meet](https://snacks.robinhood.com/newsletters/5rc41cYVIJqFIaeHESJL4Q/articles/7oCEM6Su7WwK3R1ovHEKGW) those sky-high expectations — and enthusiastic cannabis co's found they'd over-produced. Didn't help that the US legalization trend (11 states so far for recreational pot) seems to have [stalled](https://www.fool.com/investing/timeline-for-marijuana-legalization-in-the-united.aspx).  
- __The popped bubble:__ Those top Canadian pot stocks started 2020 down by ~60% from the highs they reached just a year before — Tilray's fallen nearly 90%. 

__Aaaand exhale...__ Canopy's strong earnings [lifted](https://www.marketwatch.com/story/canopy-roars-higher-after-better-than-expected-earnings-and-sparks-rally-in-cannabis-sector-2020-02-14) its own stock 13% on Friday. Then it passed the fun to the right — pot peers Aurora and Tilray both jumped almost 8%, and so did smaller cannabis companies in the US and Canada.

Rise

__Is this the end of the dip?...__ Despite the bubble-hype, cannabis can still sit back and enjoy some trends in its favor: It's seen as a safer alternative to opioids, US states have legalized, and CBD-infused-everything is killing social stigma. Young industries just need time to mature, hash out their issues, and self-select leaders. But every cannabis company is different — Canopy rival Aurora just reported an almost [$1B loss](https://www.marketwatch.com/story/aurora-cannabis-shares-rise-after-an-earnings-report-that-was-mostly-expected-2020-02-13) over just 3 months.

Canopy Growth's surprise earnings hint at a cannabis turnaround

__It's like Ben & Jerry's giving up dairy...__ 98% of __[Delta's](https://robinhood.com/stocks/dal)__ hefty carbon footprint is jet fuel, so it's announced a new [bold](https://news.delta.com/delta-commits-1-billion-become-first-carbon-neutral-airline-globally) move: *Become the world's 1st carbon neutral airline by 2030.* Delta's splurging $1B starting in March to get there, but the plan is mostly through carbon offsets (paying for a certificate for someone *else* to plant trees or install solar panels). Sustainability pressure on a majorly polluting industry just hit a fresh milestone.

__Wedding bells...__ __[T-Mobile](https://robinhood.com/stocks/TMUS)__ and __[Sprint](https://robinhood.com/stocks/S)__ won [approval](https://snacks.robinhood.com/newsletters/PmRtD9krW8T3WMf5elaP3/articles/61rPuJhCjslevX0uRucLKO) from a judge for their long-delayed merger marriage — 13 states had sued to block the mega-merger, saying it would reduce competition and lead to pricier phone bills. But the judge doesn't think it's so clear. If this decision stands, we're left with a three-opoly of major carriers: __Verizon__, __AT&T__, and the new __T-Mobile__.










Highs

Who's up...

__Everybody hurts...__ even $1.4T __[Apple](https://robinhood.com/stocks/AAPL)__. On Monday, it [revealed](https://techcrunch.com/2020/02/17/apple-will-miss-revenue-forecast-as-coronavirus-impacts-its-manufacturing-sales/) it doesn't expect to meet its 2nd quarter revenue forecasts — that's less than a month after [posting](https://snacks.robinhood.com/newsletters/1TSUKPobYVfVzeGc1Gkbyq/) its biggest quarterly profit. Ever. Coronavirus has slowed Apple's iPhone supply chain as factories shut across China. Plus, sales in China are already suffering as locals [stay home](https://www.cnn.com/2020/02/14/asia/coronavirus-work-from-home-intl-hnk-scli/index.html) instead of heading to work or shopping for new noise-cancelling AirPods.

__Brand is everything...__ Ecommerce startup __Brandless__ is [shutting down](https://snacks.robinhood.com/newsletters/7DiobMh6pvFOwBiAXdpRIf/articles/6Fi1JZs20TirSMZokP08Xa) after failing to build a brand without a brand. The Softbank-backed company tried to make products cheaper for consumers by saving on marketing costs, cutting out grocery stores, and deleting logos. But its no-frills, health-conscious go-to's ($3 organic cashew butter, cruelty-free moisturizer, etc) weren't able to compete in the crowded direct-to-consumer space where brand wins.

Lows

...and who's down

Dow Jones

S&P 500

Nasdaq

Bitcoin

10-Yr US Treasury

_"Those our sales numbers? Nice."_

🍃Canopy Growth saves cannabis

__Time to get money...__ __[Tesla](https://robinhood.com/stocks/TSLA)__'s stock has been having [a moment](https://snacks.robinhood.com/newsletters/23rAZNGewLgeWZFmLjk94T/articles/2FGrtDgStyRFOOhKpFOiRE) — its [market cap](https://learn.robinhood.com/articles/GByCbiOluG2kcWs1AF6m5/what-is-market-capitalization/) is now $144B, worth nearly double Ford and GM's *combined* $83B value. Now, Tesla is cashing in by issuing $2B worth of new stock — 2 weeks after Elon [said](https://www.reuters.com/article/us-tesla-offering/tesla-seeks-to-tap-into-stock-surge-with-2-billion-share-sale-idUSKBN2071OY) raising money "doesn't make sense." Tesla stock dipped at first (because new shares [dilute](https://learn.robinhood.com/articles/5rlezLS4uMuf3cZTyEAo38/what-is-stock-dilution/) the value of existing shares), but quickly bounced back.

__Unusual move for a large, public company...__ but it makes sense. That's because swings in a stock price don't directly affect the company -— A Tesla stock surge doesn't influence its bottom line. *Unless* the company decides to issue and sell new shares: 

- __IPO:__ An [Initial Public Offering](https://learn.robinhood.com/articles/6UsdUrlnUvxiDpDT4D2bup/what-is-an-initial-public-offering-ipo/) price *does* matter, because the company is directly selling new shares for the first time to the public (the higher the stock price, the more $$$ the company collects).
- __Secondary Market:__ Once those shares are in the hands of regular investors, *we* are the ones who benefit or lose from the stock price's rise/fall. When you own a stock and sell it high, *you* get money, not the company. 



_Tesla: "Let's get this bag"_

Raise

__Tesla shares are kind of like second-hand Gucci bags...__ Gucci only makes money off the initial purchase — not when the original buyer sells the special edition purse for a higher price years later. Neither do publicly-traded companies when you sell their shares. But by offering *new* shares to the public, Tesla can raise cash to fund its projects, like the 4th Gigafactory that's currently [finding space](https://electrek.co/2020/02/13/tesla-starts-deforestation-process-gigafactory-berlin/) in a forest near Berlin.


Tesla is finally cashing in on its stock price, offering $2B in new stock

__The classic Heinz ketchup bottle...__ hasn't changed much during the company's 151-year history. Condiment legend Heinz merged with mac-n-cheese icon Kraft back in 2015 to form __[Kraft Heinz](https://robinhood.com/stocks/KHC)__. The food giant's latest 5% drop in quarterly sales knocked shares down 8% Thursday — probably a result of Kraft's lack of healthy food options:  

- __Think of processed pantry puppies__ like Jell-O, Oscar Mayer, Capri-Sun, and Lunchables — all Kraft Heinz brands. All boasting unpronounceable ingredient lists.
- __Consumers have been moving__ away from super-processed foods, towards healthier/trendier "whole" foods snacks like Greek yogurt, almond butter, and protein bars that show off their (lack of) ingredients.

__Kraft's labels are in pain...__ The company had to [write down](https://www.marketwatch.com/story/why-the-154-billion-kraft-heinz-brand-write-down-was-unusual-2019-02-22) the value of its old-school brands by $15B last year — just yesterday, Kraft Heinz announced that Maxwell House coffee is worth $213M less than you thought. Add that all up and Kraft Heinz's stock has plunged over 70% in the past 3 years, and 40% in the past year alone.

__Kraft needs to ketchup to the times...__ because it's getting left behind by its rivals. Its sugary Big Food peers have been busy acquiring cool, health-centric startups — without having to innovate themselves:

- __Kellogg__ bought RXBar, when it was the [fastest growing](http://newsroom.kelloggcompany.com/2017-10-06-Kellogg-adds-RXBAR-fastest-growing-U-S-nutrition-bar-brand-to-wholesome-snacks-portfolio) nutrition bar in the US.
- __General Mills__ bought Annie's Organic and Epic meat-based bars.
- __Hershey's__ acquired SkinnyPop popcorn. 

Kraft Heinz sales fall as it doubles down on processed food

__Not so fast...__ __[Microsoft](https://robinhood.com/stocks/MSFT)__ scored a huge win by snagging the Pentagon's $10B cloud computing contract (aka the "JEDI" deal) back in October. Cloud-competitor __[Amazon](https://robinhood.com/stocks/AMZN)__ wasn't so pleased, so it [appealed](https://snacks.robinhood.com/newsletters/3LqtV85M89Jc6D6iWOYgE0/articles/4oud1BIj8oUwneA9uooyDi/) the decision in December. *Now,* a federal judge ordered a temporary [block](https://www.cnbc.com/2020/02/13/amazon-gets-restraining-order-to-block-microsoft-work-on-pentagon-jedi.html) on JEDI in response to Amazon's lawsuit.

- __JEDI:__ Over 10 years, Microsoft would modernize/build the Department of Defense's IT in the cloud (cloud: think a Google Doc stored on the internet, vs. an OG Word Doc stored on your laptop). Microsoft's servers would store/crunch government data.
- __AWS:__ Amazon's cloud-computing giant makes up 12% of Amazon's revenue, but a whopping __63% of its profit__. Amazon claims President Trump sabotaged its bid because he [doesn't like](https://www.thestreet.com/world/trump-vs-bezos-a-history-of-their-twitter-clashes-14859977) *The Washington Post* (which Amazon CEO Jeff Bezos owns).

__The DoD is America's largest employer...__ That means big data. And big data means big cloud cash — cash that's now on the line because of this temporary block. If the judge decides the DoD needs to reconsider its decision, Microsoft could lose the [biggest cloud contract](https://www.npr.org/2019/11/14/777585675/amazon-appeals-pentagons-choice-of-microsoft-for-10-billion-cloud-contract) in US history.

Block

__Cloud is the new oil...__ Like oil back when everything in the economy needed to be shipped and delivered in trucks, today's economy runs on cloud computing — Companies are moving to cloud providers to store their data and manage their biz apps, instead of doing it themselves. Now cloud leaders like Amazon, Microsoft, __Oracle__, and __IBM__ are increasingly fighting over these big cloud deals.

Microsoft's $10B deal with the Pentagon gets frozen, because of Amazon

💴Tesla cashes in on its high 

__Before [Spotify](https://robinhood.com/stocks/SPOT) and Apple Music...__ You turned to Pandora for "stations" that matched your mood, fiercely skipping to find that one song. But when you tired of Michael Bublé-ish, you'd turn to edgier __SoundCloud__ — your go-to for mashups and 50-minute tropical house mixes. The Berlin-based startup has been out of the limelight for years, but it just got a [$75M investment](https://www.engadget.com/2020/02/11/siriusxm-invests-75-million-soundcloud/) from __[Sirius XM](https://robinhood.com/stocks/SIRI)__ (which, coincidentally, owns Pandora): 

- __Street Cred:__ Described as "the YouTube of music," SoundCloud embraced user-generated tunes and became a place for up-and-coming creators to share their songs. It helped launch Chance the Rapper, Billie Eilish... and Elon Musk's [EDM career](https://soundcloud.com/user-209448905/dont-doubt-ur-vibe)). 
- __Growing Pains:__ Due to difficult licensing and monetization issues, SoundCloud almost went bankrupt. In 2017, it laid off nearly 200 employees and raised emergency funding.
- __Identity Crisis:__ As other streamers struck deals with the big record labels, SoundCloud started favoring ad-revenue-generating music from big stars at the expense of lesser-known artists, introducing paid subscriptions and licensed music.

__Still around...__ SoundCloud made $127M revenue in 2018. But it's moved further from the DIY roots that made it popular, while still lagging on the mainstream/money-making front. FYI, both Twitter and Spotify tried to acquire SoundCloud — and both deals fell apart.

__SoundCloud was late to the 'License Game'...__ Its early biz was more like users uploading songs to YouTube without copyright licenses. Now, record labels [insist](https://www.theverge.com/2017/7/21/15999172/soundcloud-business-model-future-spotify-streaming) on licenses to use their artists' music (they can get paid on streams). __Spotify__ was quick to strike these license deals, letting it to offer many more songs/artists (and draw more subscribers). By the time SoundCloud made its 1st label deal in 2014, Spotify and Apple Music were already leaders.



SoundCloud just got a $75M investment — but it's going through an awkward phase

__What's a Deepfake, again?...__ __[Facebook](https://robinhood.com/stocks/FB)__, with its 2.5B users sharing billions of posts, just made a new addition to its fact-checking army: a whopping [4 journalists](https://techcrunch.com/2020/02/12/reuters-facebook-fact-checker/). The 4 Reuters journalists will join a US fact-checking team that includes the Associated Press, PolitiFact, Factcheck.org, and thousands of FB-employed contractors. Oh, and don't forget machine-taught AI bots that spot potentially [false news](https://www.facebook.com/help/1952307158131536) and flag ALL-CAPS!!! posts.

- __'Tis the Season:__ Political ads season. Presidential primary elections are happening — and the outflow of political ads and posts is just gonna increase. FB's been in hot water for misinformation on its platform — and the jacuzzi is getting hotter. 
- __Cue the Fact Squad:__ We're calling it: __Factual Accuracy Investigation League__ (*or F.A.I.L., for short*). This crew of moderators, journalists, and bots has *a lot* on its plate (billions of posts per day, including generous servings of misleading, false, and manipulative information). 
- __Blog About It:__ Reuters' 4 journalists will review user-generated vids, pics, and headlines that were flagged or submitted for review. Then, they'll blog about whether something is true, false, or partially true. FB will use those conclusions to label bad info and limit its spread in the News Feed algorithm (by up to [80%](https://techcrunch.com/2020/02/12/reuters-facebook-fact-checker/)). 



Check

__It would really take an army...__ to actually fact-check and verify every single Facebook post for misinformation, since most is user-generated content. Even with its F.A.I.L. army, Facebook has become nearly too big to moderate. And Zuck still insists that it's a social network — not an editorial operation like The Wall Street Journal. Since Facebook is failing to keep up, you'll need to stay vigilent.

Facebook adds Reuters to its fact-checking army against quasi-impossible odds

_Realizing you're no longer as edgy SoundCloud, but also not as mainstream as Spotify_

Facebook adds to project F.A.I.L.

__I approve this relationship...__ Judge Victor Marrero to __[T-Mobile](https://robinhood.com/stocks/TMUS)__ and __[Sprint](https://robinhood.com/stocks/S)__. Approval of the biggest merger in the wireless industry powered Sprint stock up 77% (investors we're expecting this outcome). If the opinion remains unchallenged, we're left with 3 major carrier choices: __[Verizon](https://robinhood.com/stocks/VZ)__, __[AT&T](https://robinhood.com/stocks/T)__, and the new __T-Mobile__ (that ate Sprint). Here's the history of this complex courtship:

- __June 2018:__ T-Mobile's CEO announces that his company has agreed to merge with Sprint. The combo company – valued at $146B – would be split between 3 owners: Deutsche Telekom (T-Mobile's parent), SoftBank (which owns most of Sprint), and retail investors like you and us who own remaining shares. 
- __November 2019:__ The Department of Justice and the Federal Communications Commission approve the merger under certain conditions... But 13 states plus DC sued to block the deal, saying it would hurt competition and lead to pricier phone bills.

__Sprint has been [lagging](https://www.wsj.com/articles/a-decade-of-wireless-change-in-charts-11581459073?mod=article_inline) rivals for a while...__ so the judge doesn't think this deal will substantially hurt competition. Plus, regulators will make sure that __[Dish Network](https://robinhood.com/stocks/DISH)__ enters the game as a viable new service provider. Sprint will have to sell Dish 9M customers, but that'll still be a distant competitor to the Big 3. 



_When the parents approve of your complicated marriage_

Merge

__We have a three-opoly on our hands...__ Here's the pecking order now: Verizon #1, New T-Mobile #2, and AT&T #3. And a three-opoly could affect your bill:

- __Interpretation A: Competition has been reduced__, now that we've gone from 4 major players to 3. When there's less competition, companies tend to charge higher prices. 
- __Interpretation B:__ __Actually, this merger increases competition,__ because Sprint was never a real player and T-Mobile wasn't big enough to compete over future 5G networks. Now T-Mobile + Sprint can effectively challenge AT&T and Verizon. 

We've got a new "Big 3" in wireless: T-Mobile + Sprint gets approved

__Trying to make iPhone jealous...__ __Samsung__ just unveiled a gaggle of new phones at its Galaxy Unpacked event (ironically, it was packed). In 2019, more than 73% of phones globally were Android (even though iPhones are the majority in [all but 14](https://www.pcmag.com/news/mapping-state-by-state-tech-trends-android-vs-ios) US states). And Samsung is the Android leader, so we're looking at what it showed off:

- __S20 Line:__ Magically skipping 10 generations since the S10, Samsung showed off the Galaxy S20, the S20 Plus, and the S20 Ultra (has a superiority complex). It was all about the camera: video in 8K, strong zoom game, AR lenses.
- __Z Flip:__ This one stands out — A folding glass phone [you can flip shut](https://www.cnet.com/pictures/samsung-galaxy-z-flip/) when you feel #sassy (same idea as Motorola's flippable new [Razr](https://www.cnn.com/2019/11/13/cnn-underscored/motorola-razr-foldable-pricing-features/index.html)). Fold it laptop-style for easy video chatting, AKA "Flex Mode." Makes sense. Shipping starts Valentine's Day at a whopping $1,380. 

__Global smartphone growth has stalled...__ So Samsung is looking to maintain its worldly lead by jacking up its and introducing the first line of mainstream 5G phones. Plus, it's going nostalgic with circa 2008 foldable-ness.

Talk

__How far can "better" really get?...__ When cellphones first hit markets, annual improvements were dramatic. You switched from your plastic Nokia button phone to a touch-screen iPhone in just a few years. But now that smartphones are portable computers, that improvement has plateaued. How many more HD cameras can Samsung and Apple really stick on 6 inches of aluminum?



Samsung unveils shiny new toys, including a flip-phone

📞 Bless this T-Mobile & Sprint marriage

__When they congratulate you for something that happened years ago...__ Thanks, I guess? __[Slack](https://robinhood.com/stocks/WORK)__ stock jumped 18% Monday after Business Insider [reported](https://markets.businessinsider.com/news/stocks/slack-stock-price-ibm-biggest-account-global-employees-messaging-platform-2020-2-1028890304) that it snagged __[IBM](https://robinhood.com/stocks/IBM)__ as its biggest client. Huge win, since IBM has *350k employees*.

__Then, trading of Slack stock was strangely [halted](https://techcrunch.com/2020/02/10/what-happened-to-slack-today/)...__ *Then*, this announcement from Slack cleared up the [situation](https://www.youtube.com/watch?v=l0ug31Ksku4): "IBM has been Slack's largest customer for several years..." Slack shares fell 8% after hours. Here's how Slack's relationship with IBM has blossomed:

- __2014:__ Some IBM teams start using Slack, testing the GIPHY and emoji-filled waters of the messaging platform (which launched in 2013).
- __2016:__ Slack [partners](https://fortune.com/2016/10/26/ibm-watson-slack-chatbot/) with IBM's AI tool Watson to improve that friendly Slackbot (and allow Slack developers to make other AI bots).
- __2019:__ IBM has expanded its usage of Slack over time, and (according to Business Insider) decides to go "all in." 
- __2020:__ Slack's relationship with IBM goes public/official. Kind of old news, but the BI report lifts Slack shares. Moral of story: all of IBM's employees use Slack now.
- __Either way__, IBM's usage of Slack validates the app's potential with massive corporations, instead of just start-up-y startups.

_IBM becomes Slack's biggest customer (again)_

Work

__A mutually beneficial relationship...__ Being chosen by one of the world's largest corporations is a big win for Slack, and its partnership with IBM has prepared it over the years to tailor to larger customers. IBM, on the other hand, is a 108-year-old. When developers at Slack-using startups see IBM's chatbot integrations, they might be more inclined to champion the tech IBM's trying to sell them. 

Slack soars on news that IBM is its biggest customer — falls on exact same news

__Building your brand...__ is not just a LinkedIn gimmick. SoftBank-backed __Brandless__, the ecommerce company that sold frill-less, sustainable grocery/homegoods products for $3 each, is shutting down. In 2017, Brandless launched with direct-to-consumer single versions of almost everything — minimalist basics from organic cashew butter to cruelty-free moisturizer, with no brand on the label. Then:

- __July 2018:__ SoftBank's Vision Fund (which also financed Uber, WeWork, and Wag) invests $240M, valuing Brandless at around $500M. 
- __January 2019:__ Brandless begins [raising](https://techcrunch.com/2019/01/23/brandless-introduces-a-9-price-point-with-the-launch-of-baby-and-pet-products/) its prices beyond $3, introducing higher-priced products like baby and pet food. 
- __October 2019:__  Tries to [expand](https://www.businessinsider.com/brandless-products-brick-and-mortar-stores-2019-10) its products into brick-and-mortar retail stores.
- __February 2020:__ Goes out of business.

__End "the brand tax"...__ That was Brandless' thesis: *Make products cheaper for consumers by saving on marketing costs*. Because if a product's not splurging millions on branding, you can give that $$$ back to customers. But Brandless didn't have enough word-of-mouth and customer loyalty to survive in the highly competitive direct-to-consumer market.


Close

__Companies are built on brand...__  Brand is so important that it often overpowers actual quality, price, *and reason*. Buying an $80 candle doesn't really make sense — but it somehow clicks if it's from Anthropologie or Goop. Especially for direct-to-consumer companies, where you're not seeing the product on a store shelf, branding is crucial (from Allbirds shoes to Warby Parker shades).

Brandless shuts down after failing to build a brand without a brand

__Praising the favorite child...__ __[Restaurant Brands International](https://robinhood.com/stocks/QSR)__ is a Canadian holding company, and also the parent of Burger King, Popeyes, and Tim Hortons. But RBI was especially proud of Popeyes, which outshined its siblings this year with a surge in sales.

- __Burger King__ opened the most new locations in 20 years, but sales were up __barely 3%__.
- __Tim Hortons'__ performance "did not reflect the incredible power of our brand," according to RBI — sales were __down 4%__ (*Sorry, mom*).
- __Popeyes__ sales jumped __34%__ driven by its viral fried chicken sandwich, which was [sold out](https://www.cnn.com/2019/08/27/business/popeyes-chicken-sandwich-sold-out-trnd/index.html) in 2 weeks and caused a chicken shortage that took months to re-supply. The proud parent [called](https://www.rbi.com/file/Index?KeyFile=402720224) Popeyes' poultry dish "iconic" and a "game changer in every way." *Thanks, mom*.

__RBI is latching onto trend foods...__ Popeyes Chicken Sandwich, like the Baby Yoda of food, was a huge win for RBI. Last quarter, the Impossible Whopper drove Burger King US sales up 5%. But trend foods aren't always successful — Tim Horton's Beyond Breakfast sandwich was [killed off](https://www.cbc.ca/news/business/tim-hortons-beyond-meat-1.5444703) after less than a year. 

Grub

__Profit-wise, RBI could do more...__ It's underperforming compared to __[Yum Brands](https://robinhood.com/stocks/YUM)__, the owner of KFC, Pizza Hut, and Taco Bell. Yum is the Lyft to RBI's Uber — both own 3 huge fast-food chains. And they both had about $5.5B in sales last year — but Yum made almost 2X the profit. RBI needs to boost sales and/or lower costs to super size its profits to Yum's levels.

Popeye's had an awesome year, and its brother Burger King is jealous

🤔Groundhog Day for Slack & IBM 

__"Three-opoly" is our favorite made-up word...__ Perfect for an industry that loves making up words ([supercalifragilisticexpialidocious](https://www.youtube.com/watch?v=1Pu1adxqUAg), for example). The music biz is dominated by 3 labels: __Universal Music__, __Sony Music__, and __Warner Music__. The first two are owned by much bigger conglomerates (__Vivendi__ and __[Sony](https://robinhood.com/stocks/SNE)__), but the last one just filed to [become](https://variety.com/2020/music/news/warner-music-group-files-for-ipo-1203495626/) a publicly traded stock. Here's what Warner Music does for a living:

- __Sign artists:__ Kind of like VCs or European soccer clubs, music labels spot talent early, convince them to sign, then try to make them big stars.
- __Pick winners:__ Besides Macklemore [rap/bragging](https://www.npr.org/sections/money/2013/02/08/171476473/the-real-story-of-how-macklemore-got-thrift-shop-to-number-one) about doing it solo, there aren't many musicians who found fame without being signed by a record label.
- __Negotiate with streamers:__ The labels ensure musicians get paid for each stream on Apple Music, Pandora, and Spotify. 
- __Market, monetize, manage:__ According to [Warner's S-1](http://investors.wmg.com/node/10521/html), it makes 86% of its revenues by managing the careers of Lizzo, Metallica, Ed Sheeran, and Madonna and other stars. Warner just took a DNA test and it turns out: *it just made its [highest quarterly revenue](https://www.rollingstone.com/music/music-news/warner-music-files-ipo-949144/) in 16 years*. 

__The music industry was dead. It's almost back...__ thanks to streaming. The industry was popping platinum bottles in the year 2000, aka "Peak CD."  

- __2000 - Peak CD - $14.3B:__ When cars were racing to hold more CDs in their XX disc-changer stereo, musicians made [$14.3B](https://www.wsj.com/articles/music-revenue-surges-on-streaming-subscription-growth-11567708974) selling their music in the US. 
-  __2010 - Peak Free Music - $7B:__ Over 10 years, revenue halved thanks to Napster, Limewire, and other web apps that made musical theft insanely easy. Plus Youtube is/was free (less so now with ads). 
- __2018 - Streaming Comeback - $9.8B:__ Thanks to easy monthly subscriptions to Spotify, Apple, and/or Pandora, people are used to paying for music again.
- __But__ music industry revenues are still below 2000's Peak CD.


Stream

__You can own a piece of your favorite music...__ Wondering why Taylor Swift can't do what she wants with her music? It's [owned by her record label](https://www.thecut.com/2019/11/taylor-swift-scooter-braun-justin-bieber-feud-explained.html). As one of the top labels, Warner Music's stock (ticker symbol is TBD — we're hoping for "JAM") will let investors benefit from the continued rise of the streaming industry... or suffer if the revenue comeback dies. 


Warner Music files to IPO — it could become the top "music" stock

__Keep the Baby Yoda memes coming...__  __[Disney](https://robinhood.com/stocks/DIS)__ already has over [28M](https://www.theverge.com/2020/2/6/21126156/streaming-wars-disney-plus-netflix-wall-street-subscribers-hbo-max-peacock) US subscribers for its new streaming service, Disney+ — for CEO Bob Iger, that launch exceed "even our greatest expectations." It took Netflix 5 years to reach 28M subs (it now has 167M globally), but Mickey only needed a few months. That's thanks to a combo of a much-loved brand, nostalgic content, pixie dust, and free year for Verizon subscribers. 

__Who pressed 'Ludicrous Mode'...__ on __[Tesla](https://robinhood.com/stocks/TSLA)__ stock? Tesla surged 54% and added $56B to its [market value](https://learn.robinhood.com/articles/GByCbiOluG2kcWs1AF6m5/what-is-market-capitalization/) in just a few days last week — that makes it #2 most valuable carmaker on Earth (after Toyota). *And* it's worth almost double GM and Ford *combined*... despite being unprofitable and producing [barely 3%](https://snacks.robinhood.com/newsletters/23rAZNGewLgeWZFmLjk94T/articles/2FGrtDgStyRFOOhKpFOiRE) of the number of cars that GM and Ford did last year. Investors think Tesla's future profit potential is bigger than Detroit's. But the ludicrous rally was possibly driven by a [short squeeze](https://snacks.robinhood.com/newsletters/23rAZNGewLgeWZFmLjk94T/articles/2FGrtDgStyRFOOhKpFOiRE) coupled with FOMO buyers.





__It was all a dream...__ __[Casper](https://robinhood.com/stocks/CSPR)__ stock has fallen an anti-climactic 28% since the mattress icon went public Thursday. A month ago, Casper was valued privately at __[$1.1B](https://snacks.robinhood.com/newsletters/6kMejLjAW3nUadbqAQTFJW/articles/3clvgCbPhDFEgLE19oIZVu/)__. When it woke up Friday post-IPO, it was worth __$346M__ as a public company. A charming brand and cut-out-the-middleman biz model hasn't saved Casper from unprofitability (investors aren't into the $80M lost on returned/refunded/discounted mattresses). Now other D2C startups (Warby Parker, Glossier, Allbirds) might second-guess the IPO life.

__Less high...__ __[Aurora Cannabis](https://robinhood.com/stocks/ACB)__. The Canadian pot-company's stock fell 13% after the founder/CEO Terry Booth announced his departure and 500 employees were laid off. When weed was first legalized in Canada and some US states, producers went into full-hype mode building production facilities. But demand's been lower than expected, so overproduction has dropped pot prices. Aurora shares are [down 80%](https://www.barrons.com/articles/the-marijuana-busts-latest-casualty-aurora-cannabis-founder-terry-booth-steps-down-51581026464) since March and other pot producers have fallen over 50% on average in a year.

_You can't be a music boss, but you can own like 1 millionth of one_

🎶The Lizzo IPO

__When you think "Dunkin"...__ you envision a 64-ounce styrofoam cup and a glazed chocolate donut on a frosty January morning before hockey practice in Canton, Mass. Now, that vision is evolving to include espresso shots, alt-meat breakfast sandwiches, and '[power muffins](https://finance.yahoo.com/news/here-comes-the-dunkin-donuts-power-muffin-to-help-solve-one-key-problem-192251400.html).' While __[Dunkin'](https://robinhood.com/stocks/DNKN)__ reported 4th quarter earnings Wednesday, we've noticed that it has been subtly fancy-fying itself:

- __Better coffee:__ Before, coffee meant coffee. Now, Dunkin's [investing](https://ktla.com/2020/02/06/dunkin-pours-60-million-into-plan-to-serve-better-tasting-hot-coffee/) $60M in fancy new brewing equipment at every cafe. It's updated its espresso cups, changed its espresso recipe, and trained its employees to be 'espresso certified.' It also added iced coffee taps and cold brew.
- __More than Donuts:__ In September 2018, Dunkin' dropped 'Donuts' from its name as part of a rebrand. Last year, Dunkin' started selling Beyond Meat breakfast sandwiches and nitro-brews. Now, it's launching oat-milk lattes nationwide.
- __No styrofoam:__ Dunkin' said it would [eliminate](https://news.dunkindonuts.com/news/dunkin-donuts-to-eliminate-foam-cups-worldwide-in-2020) its foam cups worldwide by April 2020. And no more [double-cupping](https://news.dunkindonuts.com/blog/the-double-cup-is-breaking-up) ice coffees in winter.


_"You hear about the styrofoam cups?"_

__Dunkin' doesn't want to alienate its hardcore faithful...__ So it's been stealthy. Kinda like your college friend who studied abroad in Paris and now refuses dining hall coffee – but more subtle. It's because Dunkin' can rake in more $$$ for premium drinks paired with alt-meat sandwiches. And Wednesday's earnings confirmed that fancification is working:

- Espresso sales __surged almost 40%__.
- Dunkin' enjoyed its [biggest](https://www.cnn.com/2020/02/06/business/dunkin-better-coffee/index.html) quarterly sales improvement __in 6 years__. 


Dunkin' is slowly but surely "fancy-fying" itself 

__Can you get night sweats in the daytime?...__ __[Casper](https://robinhood.com/stocks/cspr)__ shares jumped 13% on 2020's biggest IPO yet. The pioneer of Direct-to-Consumer mattresses wants to make the "sleep economy" a thing (like fetch) — yesterday's IPO had more nightmarish vibes. A month ago, Casper was worth __$1.1B__. Today, it's [worth](https://www.nytimes.com/2020/02/06/technology/casper-ipo.html) __$500M__. These 5 numbers from its IPO paperwork caused that:

- __$92M =__ Its (growing) loss in 2019 
- __$80M =__ The money it lost *specifically* on returned/refunded/discounted mattresses
- __$423M =__ The amount it's dropped on marketing since 2016
- __201 vs 9 =__ How many times Casper mentioned "__brand__" vs "__profitable__" in that [S-1 paperwork](https://www.sec.gov/Archives/edgar/data/1598674/000104746920000166/a2240404zs-1.htm)



__You've heard of "private" and "public" markets...__ But there's actually a subtle *3rd* market that touches companies in the short window before their IPO — We're calling it the "Pre-Public Market," and it's what messed with Casper.

1. __The Private Market:__ These are the private Venture Capital firms that stuck money into the startup since 2014 to drive its valuation to __$1.1B__ as you were tempted by Facebook ads to buy its California King.
2. __The Public Market:__ These are the public retail investors (like you and us) who brought its stock up __13%__ yesterday *after* the IPO.
3. __The *Pre*-Public Market:__ These are the institutional investors who got to hear Casper's roadshow pitch in the short month leading up to the IPO — between the Private and Public Markets.
4. Casper was forced to lower its stock price by 55% in order to get those institutional investors to bite, __dropping its valuation to $490M__ just before yesterday's IPO. 


Wake

__This just shocked the entire Direct-to-Consumer startup industry...__ __Warby Parker__ *glasses*. __Allbirds__ *shoes*. __Away__ *suitcases*. __Glossier__ *cosmetics*. __Rent The Runway__ *clothing*. These DTC unicorns have been itching to IPO themselves — and they're all valued around $1B. Casper's sad debut could mess with their next private fundraise or maybe even make them rethink IPOs (like trying to get acquired instead).

Casper jumps* 13% on its IPO day (*after its valuation had been slashed in half)

__Back from the spa...__ __[Twitter](https://robinhood.com/stocks/twtr)__ is feeling refreshed after posting $1B in quarterly revenue for the first time. What it really wants you to know: *it's "healthier" now* ("health" was mentioned 8 times in its [shareholder letter](https://s22.q4cdn.com/826641620/files/doc_financials/2019/q4/Q4-2019-Shareholder-Letter.pdf) — more than "profit"). To Twitter, healthy means fewer trolls, less fake news, less trolling. Twitter's self-betterment moves:

- __Made it easier__ to report problematic/abusive content and introduced a feature to hide certain replies — Twitter calls this "proactively limiting the visibility of unhealthy content."
- __Invested in__ __employees and AI__ to help remove deepfakes (photos/videos altered to trick you). On Tuesday, Twitter said it would apply warning labels to tweets with "false" or deceptive media.
- __Banned__ political ads. And labeled actual politicians who are actually running in 2020 elections.


__The Keto-worthy mindfulness cleanse is working...__ Twitter's daily users grew to 152M from 145M last quarter. But more interestingly, there was a 27% drop in bystander reports on tweets that violate the terms of service.







Tweet

__Spa treatments are expensive...__ Twitter's quest to glow up came at a price. It posted lower profit than expected, making $119M vs $225M last year. And it's expecting costs to climb further — Twitter's adding 20% more staff this year. But its newly aggressive focus on "health" could set it apart from the rest of social media, and investors are excited for Tokyo 2020 and the US presidential election driving people to Twitter. 

Twitter posts record $1B revenue as it focuses on self-care

🍩 Dunkin' gets fancy 

__Primed for pod-ification...__ __[Spotify](https://robinhood.com/stocks/SPOT)__ has doubled-down on its podcast offerings. The latest catch: __The Ringer__ — ex-ESPN personality Bill Simmons' podcast network, offering 30 sports pods (+ other topics) and reportedly boasting around [100M](https://www.wsj.com/articles/spotify-adds-subscribers-swings-to-loss-as-it-invests-in-podcasts-11580900543) monthly downloads. Spotify thinks podcasts are the radio of the future, so it's going in big:

- __Last year:__ Spotify shelled out over __$400M__ to buy podcast companies like Gimlet (pod producer), Parcast (original shows), and Anchor (DIY pod recording software).
- __By December:__ [500K](https://podcasters.spotify.com/blog/podcaster-wrapped-2019) podcasts were on Spotify's platform.
- __Today:__ Its pod-ience (pod audience?) has almost [doubled](https://podcasters.spotify.com/) since the start of 2019. More than [16%](https://techcrunch.com/2020/02/05/spotify-q4-2/) of Spotify's monthly users listen to podcasts, and that's [driving](https://www.wsj.com/articles/spotify-adds-subscribers-swings-to-loss-as-it-invests-in-podcasts-11580900543) sign-ups for its paid version.
- __Now:__ It's using the Ringer to up its sports offerings. Because, you know, sports is kind of a popular topic. "*We bought the next ESPN*" — Spotify's CEO Daniel Ek.

__The results are in...__ Spotify added a record number of paying subscribers for the quarter (11M), and now has 124M total (271M including its non-paying users). But that pod-ification has also cost it big. It lost $85M this quarter, in part thanks to its costly pod-cquisitions.

"_I did not see that acquisition coming!_"

Heard

__This could mean pod war...__ __[Apple](https://robinhood.com/stocks/AAPL)__ is #1 in podcasts, Spotify is #2. But Spotify's got a huge lead in paying ears overall with __124M__ subscribers compared to Apple Music's __60M__. The Ringer pods (like most of Spotify's) will still be available on other platforms, like Apple. But someday Spotify might make them exclusive to its app in a gated audio garden — if Apple does the same, it'll be a "choose your side" pod world.

Spotify acquires The Ringer, adding a big, sporty fish to its pod pond

__Do it for the 'gram...__ Or for the $20B. __[Facebook](https://robinhood.com/stocks/fb)__-owned __Instagram__ brought in that much ad revenue last year, [according](https://www.bloomberg.com/news/articles/2020-02-04/instagram-generates-more-than-a-quarter-of-facebook-s-sales) to Bloomberg and PFWTM (*people familiar with the matter*). That Insta-ad money represents over 25% of Facebook's total revenue and beats YouTube's $15B (YouTube's parent, Alphabet, [just revealed](https://snacks.robinhood.com/newsletters/4D3JTyB2h7yyJS20eSh98k/articles/2kSZALjKi3VsktwkcpaC3I/) its revenues this week).

- __YouTube:__ We've all seen (and skipped) the ads before a video. You'd think 2B+ users would mean more ad money for YouTube. Buuut, [over half](https://www.theverge.com/2020/2/4/21121370/youtube-advertising-revenue-creators-demonetization-earnings-google) that ad $$$ goes to video creators.
- __Instagram:__ Doesn't pay creators because it throws ads between friends' Stories and sprinkles them into your feed. Facebook bought Instagram in 2012 for $1B — but since Facebook's now worth $600B and Insta is 25% of its revenues, the 'Gram is arguably worth $150B now.

__The whole family...__ Facebook doesn't disclose revenue for its individual "children," bundling their financial info instead into their so-called "family of apps." 

- __Facebook:__ The old parent, always cracking dad-jokes and sharing pictures of ferns and grandchildren. 
- __Instagram:__ The too-cool-for-school teen child. Super fashionable, always taking Valencia-filtered selfies, and perennially drinking craft coffees while chilling on a white-sand beach.
- __WhatsApp:__ The cool, foreign cousin that's always studying abroad somewhere and reading Kant. 
- __Messenger:__ The distant aunt that you always forget exists but go to when you need some random specific thing. 

_Facebook's daughter, Instagram, talking to cousin WhatsApp_

Post

__Focusing on "the family" could be a strategic move...__ FB's social media dominance is why it's being investigated by the government. Zuck's giant baby could get broken up to restore competition — that could include dropping Insta. Since Instagram [generates](https://www.theinformation.com/articles/how-youtube-and-google-cloud-compare-to-rivals) more ad revenue than NBC, ABC, and Fox combined, Zuck may downplay that alarming fact by keeping Instagram's numbers on the down-low.

Instagram reportedly makes more ad money than YouTube 

 🎶 Spotify acquires its "ESPN"

__Seriously getting out of hand...__ __[Tesla](https://robinhood.com/stocks/TSLA)__. It's now the world's 2nd most valuable carmaker (behind __Toyota__), despite never having made an annual profit. The stock's almost __*quadrupled* in value__ since October. It's almost *boring* to even bring it up anymore... But the rally also has half your coworkers beginning every meeting asking: *when will it end?*

- __The Past Week:__ Tesla stock surged __54%__ — and it's added $56B to its value (that's almost 4 Lyfts)
- __The Good:__ A string of feel-goods  fueled some of the rally: rising sales/deliveries, a new factory in China, and its 2nd straight quarter of profitability. Oh, and Tesla's battery partner __[Panasonic](https://robinhood.com/stocks/PCRFY)__ also posted its first quarterly profit for its battery biz. 
- __The Reality:__ Tesla's value is __[double](https://snacks.robinhood.com/newsletters/69T8jIdyvII6POb1h9ZKt0/articles/30CrqDhIYKxOTgR082doiH)__ that of __Ford__ and __GM__'s combined, yet Ford and GM produced 39X as many cars as Tesla did [last year](https://snacks.robinhood.com/newsletters/69T8jIdyvII6POb1h9ZKt0/articles/30CrqDhIYKxOTgR082doiH) (14M vs 367K). And they were hugely profitable last year, unlike Tesla.

__Tesla is like a young avocado tree...__ Hot, in-demand on plenty of toast, and primed for growth. OG carmakers like GM and Ford are like mature orange trees. OJ used to be on every breakfast table, but now its demand is [slowing](https://foodinstitute.com/focus/americans-are-drinking-less-orange-juice). And investors care most about *future* profit/growth potential, and they're not convinced it's there for the Detroit-based orange growers.

_Tesla stock rally viewing party_

Rally

__The rally could also be an effect of FOMO hype...__ Investors hopping on the soaring Tesla bandwagon drive the stock higher, rinse, repeat. It could also partly be a "short squeeze." When you invest "long," you hope to buy low and eventually sell higher. "Short" sellers are the opposite — they're betting a stock will go down.

- Given all the people [Doubting Elon's Vibe](https://www.theverge.com/2020/1/31/21116427/elon-musk-song-edm-soundcloud), Tesla is __aggressively shorted__ — many investors hope the stock falls. They "borrow" and then sell it, hoping that when it's time to give the stock back to their broker, they can buy it at a lower price and turn a profit.
- When TSLA shares rise, __that puts pressure on short-sellers__ to buy shares back sooner (because the more it rises, the more they lose).
- Those buy-backs to close out shorts can help __drive Tesla's stock higher__... which then __squeezed__ even more short-sellers to buy back the stock and cut their losses.







Tesla is officially in ludicrous mode — now Earth's 2nd most valuable carmaker

__Meeting the $5 dollar credit card minimum...__ You added extra oat milk to your cold brew, swiped your card, and walked out of the store with your caffeine. But what went on behind the spending scenes is way more complex. Merchants like your bodega and coffee shop pay [$100B+](https://www.bloomberg.com/news/articles/2020-02-04/visa-is-planning-the-biggest-changes-to-swipe-fees-in-a-decade?sref=q3KSFp38) a year in interchange fees (aka "Swipe Tax") for your credit card usage. Now __[Visa](https://robinhood.com/stocks/V)__'s changing its fee structure for stores. Some background:

- __Merchants' Cost:__ The coffee shop pays that Swipe Tax every time you pay with a card (usually ~1.8% of your payment). Enter, credit card minimums.
- __Banks' Cut:__ Most of that fee $$$ ends up in the pocket of the bank that issued your card (Chase, Citi, etc.) — because the bank is the one actually *paying* the merchant and *lending* you the money via credit (aka, covering your latte). 
- __Network's Cut__: A much smaller cut of the fee goes to the network that facilitates the payment, like Visa or __Mastercard__. They don't usually issue the plastic or credit, but they make sure money moves from your bank to your coffee shop (and that cold brew charge magically appears on your card statement).

__Now, Visa wants to raise fees for some merchants...__ and cut them for others.

- __Raise Fees:__ For non-swiping, ecommerce companies that you likely gave your credit card info to (think Amazon, DoorDash, and Uber).
- __Lower Fees:__ For companies that require you pay by check to avoid the swipe fees (think real estate, like your monthly rent).



Swipe

__Visa's optimizing, not disrupting itself...__ It's milking more money out of your credit card purchases. That's why it's raising fees for no-brainer "I'll use credit" purchases, and lowering them where you don't typically swipe (like rent payments). Visa is the world's largest payments processor, but that doesn't mean merchants won't complain. Kroger even [banned](https://www.usatoday.com/story/money/2018/08/01/kroger-ban-visa-credit-card/881228002/) Visa cards in 2018 because of fees, before [reversing](https://www.businessinsider.com/kroger-reverses-visa-credit-card-ban-2019-10) the ban the next year.

Visa's making a big change to the "swipe tax" from every time you swipe

__Took [Netflix](https://robinhood.com/stocks/NFLX) 10 years...__ to reach the 68M US subscribers it has today. After just 2 months, __[Disney](https://robinhood.com/stocks/DIS)__'s almost halfway there with 28.6M. That's the headline from Disney's 4th quarter earnings report. It sounds good, but Disney+ actually hurt Disney's profits badly — those new subscribers drove revenues up 36% overall for Disney, but sank profits by 23%.

- __Disney+'s 28M:__ 20% of those Mickey lovers aren't even paying the already low $6.99/month for Disney, they're getting it for free from a Verizon promotion.
- __And it's expensive:__ The cast of *The Mandalorian* and the CGI gal who whipped up Baby Yoda aren't free. The streaming segment (which also includes Hulu and ESPN Plus) lost $693M last quarter (maybe the $7/month isn't enough).
- __PS:__ A new series about Obi-Wan Kenobi is being developed for next year.  



__Remember Walt's character ecosystem...__ He drew it on a napkin back in [1957](https://hbr.org/2013/05/what-makes-a-good-corporate-st). Unlike HBO, Netflix, Quibi, and NBC's new Peacock streaming service , Disney+ doesn't need to make profits. It can set a low price to maximize the number of people who fall in love with Baby Yoda, then cash in on its other divisions:

- __Media Networks:__ The division that's still making bank thanks to cable TV packages is still its profit puppy — it made $1.3B in profit in the last quarter.
- __Theme parks:__ 10% more Americans visited its US parks, but this current quarter is expected to feel some pain from coronavirus (an estimated $130B of lost profit). 
- __Merchandise:__ Lunch boxes, stuffed toys,  *Frozen* dresses — they're all bundled in with the Disney+ division, so we can't say exactly how sales did.
- __Studio Entertainment:__ Disney is the [undisputed](https://www.businessinsider.com/disney-movies-with-1-billion-at-box-office-2019-8#4-captain-marvel-4) king of movies, and *Star Wars Episode IX* helped profits triple in that division compared to the year before (a *Star Wars*-free year). 

Disney+ grows to nearly half as big as Netflix... in just 2 months

🤯 Tesla. Officially in ludicrous mode. 

__We're sensing friction...__ Remember when the maker of Schick razors was [going to buy](https://snacks.robinhood.com/newsletters/5KQnhplGGxiwLheVjAX4Vo/articles/1laOwntGNSB2gsJijpAmmq/) trendy subscription shave-startup __Harry's Razors__ months ago? Probably not happening now. The Federal Trade Commission just sued to block the $1.4B acquisition of Harry's by __[Edgewell Personal Care](https://robinhood.com/stocks/EPC)__. 

- __Anti-Competitive__: The FTC claims  the deal would eliminate a major competitive force in an industry that's mainly being [controlled](https://www.wsj.com/articles/ftc-sues-to-block-shaving-merger-11580751409) by 2 companies. 
- __Duopoly:__ __[Procter & Gamble](https://robinhood.com/stocks/PG)__ and __Edgewell__ dominate the shave market — P&G is #1 with Gillete men's razors and Venus women's razors making up around [50%](https://apnews.com/fd828326b90e4a15ad874f042762740e) of the market. Schick is #2 with 10%.
- __Newbies' Edge:__ Startups like Harry's and __Dollar Shave Club__ pushed shaving giants to lower their prices and offer more options.
- __But:__ Now that Dollar Shave was acquired by Unilever for $1B and Harry's was (nearly) scooped, the FTC's concerned that Big Shave brands are buying up startup rivals so they can resume their price-increasing, anti-competitive ways. 

__Investors feel smooth and relieved...__ Edgewell shares actually __jumped 13%__ on news of the FTC's deal-blocking lawsuit. Turns out, investors weren't so crazy about a company with a $1.6B [market cap](https://learn.robinhood.com/articles/GByCbiOluG2kcWs1AF6m5/what-is-market-capitalization/) dropping $1.4B on a fast-growing (but money-losing) startup. That's why shares [plunged](https://snacks.robinhood.com/newsletters/5KQnhplGGxiwLheVjAX4Vo/articles/1laOwntGNSB2gsJijpAmmq/) 16% when the deal was announced back in May. Still, Edgewell wants fast-scaling Harry's to grow its older slowing razor biz.

_Cutting off the deal_

Shave

__If razors are getting such sharp scrutiny...__ maybe the Justice Dep't and FTC will finally go after the real giants of American biz. Right now, there are multiple ongoing government-led [investigations](https://www.vox.com/recode/2020/1/22/21070898/big-tech-antitrust-amazon-apple-google-facebook-house-hearing-congress-break-up) into __Amazon__, __Apple__, __Google__, and __Facebook__. Could Instagram be forced to split from Facebook? Or AWS broken off from Amazon? YouTube from Google?

Harry's Razors $1.4B acquisition by Schick might not happen 

__It's my time to shine...__ YouTube finally got its moment in the __[Alphabet](https://robinhood.com/stocks/GOOG)__ earnings spotlight. First, the Google-parent [reported](https://www.cnbc.com/2020/02/03/alphabet-discloses-youtube-cloud-revenues-for-the-first-time.html) a disappointing performance for its core search-ads biz. Then, for the first time ever, Alphabet revealed YouTube and cloud revenues (probably to distract from its buzz-kill ad earnings).

- __YouTube:__ Needs no introduction. Google bought it in 2006 for $1.6B and just revealed that YouTube brought in over $15B revenue in 2019 (up from $11B in 2018). Your "Babies & Puppies Compilation" views are sandwiched with ads — YouTube says it forwards most of those ad bucks to video creators.
- __Cloud:__ That includes G-Suite favorites like Google Drive, Docs, and Sheets, which "magically" save your edits and make them shareable in real-time (aka, the internet). Those upgraded storage cloud accounts brought in almost $9B, compared to nearly $6B in 2018.

__Back to the core biz...__ Google's an ad company. Its overall revenue, mostly made up of online ads, rose *only* 16.5%, sending shares down 5%. Profits still topped estimates though, thanks in part to an extremely low tax rate for the quarter. Alphabet set aside just [$33M](https://www.businessinsider.com/alphabet-google-q4-2019-earnings-search-ads-youtube-google-cloud-2020-2) for taxes (0.07% rate), down from $1.1B in the same quarter last year.




Watch

__YouTube may get milked...__ Despite the less-than-expected revenue, last month Alphabet became the 4th US company to hit a $1T valuation (that's 1,000 billions). But with success comes fresh challenges: government investigations threaten to break up Google's biz, while rivals like Amazon are gaining in the ad space. That could affect YouTube:

- Alphabet might have to start milking more profit out of YouTube.
- Google's CEO: *There is “significantly more room” to make money off YouTube’s users.*


Google's parent Alphabet finally shows off YouTube

__Pass the Purell...__ We've been hearing plenty about companies shutting down stores in China (Apple, Starbucks), cancelling flights (Delta, American), and overall losing millions from the coronavirus spread. Travel, oil, tech, luxury goods — all lost out. But some companies and industries have surprisingly benefited...

- __Cleaning/Hygiene:__ Clorox wipes. Hand sanitizers. Masks. Humans are reaching for cleansing options during a viral outbreak, sending shares of __Clorox__, __Procter & Gamble__, and __Colgate__ all up [last week](https://www.cnn.com/2020/01/27/investing/clorox-cleaning-products-coronavirus/index.html). The CEO of __3M__ is ramping up production of mouth/nose-covering masks too (currently in a [shortage](https://www.businessinsider.com/wuhan-coronavirus-mask-shortage-causing-price-increase-2020-1)).
- __Video Conferencing:__ The [biggest Work-From-Home experiment](https://fortune.com/2020/02/03/coronavirus-offices-closed-work-from-home/) ever is going on in China right now. People who need to be in the room during big meetings can't enter their offices. Hence, video conferencing. __[Zoom](https://robinhood.com/stocks/ZM)__ shares have climbed [25%](https://www.marketwatch.com/story/zoom-video-stock-jumps-more-than-10-as-coronavirus-makes-face-to-face-meetings-less-attractive-2020-02-03) over the past week on hopes it'll get tried — and kept.
- __Pharma/Biotech:__ Mostly companies that say they're in the process of working on a coronavirus vaccine. __Vir Biotechnology__ surged [111%](https://www.cnbc.com/2020/02/01/heres-your-guide-to-biotech-companies-working-on-coronavirus.html) over the past month, while __Novavax__ popped 91%, and __Inovio__ Pharmaceuticals is up 37% (even though a working vaccine could be years away).





Sanitize

__And let's not forget these other investments...__ When things in the stock market get bumpy, some investors look for perceived "safer" places to put their money (think gold, treasury bills, and bonds). These "safe-haven" assets aren't usually as affected by market drops as stocks are. Unrelated, but also thriving in uncertainty: Bitcoin, which has gained [30%](https://www.cnn.com/2020/02/01/investing/bitcoin-prices-coronavirus/index.html) since the end of 2019. 