__Came for the workout…__ stayed for instructor Cody. __[Peloton](https://robinhood.com/stocks/PTON/)__ shares surged 22% yesterday after the spin icon [revealed](https://www.cnbc.com/2023/02/01/peloton-pton-q2-earnings-2023.html) healthy growth for its subscription biz — which, FYI, makes more $$ than its hardware biz ($2K spin bikes, fancy treadmills). Last quarter Peloton’s losses narrowed as cash burn fell to $94M, down from $547M a year ago. While Peloton’s hardware sales plunged 52%, subscription revenue from on-demand fitness classes grew 22%. 

- __Speed up:__ Peloton gave a better-than-expected forecast for the year and is aiming to have 1M people sign up for app subscription trials over the next year.
- __Slow down:__ It’s Peloton’s eighth straight quarterly loss, and the stock’s down 43% in the past year. But shrinking losses and subscription growth could signal a comeback.  

__Just keep spinning…__ Peloton thrived during lockdown, but as people hopped off their couches and headed back to the gym, unsold equipment [piled](https://snacks.robinhood.com/newsletters/2aaB9GnrWgVHhjJd7bFJu/) up. To cut its losses, Peloton [outsourced](https://snacks.robinhood.com/newsletters/iw2tCwjTCvnTryUaqDDzb/) manufacturing, canceled plans for a $400M Ohio plant, and laid off over a tenth of staff. Last fall Peloton pivoted from its direct-to-consumer model by striking distribution deals with __[Amazon](https://robinhood.com/stocks/AMZN/)__ and __[Dick’s Sporting Goods](https://robinhood.com/stocks/DKS/)__ to energize demand. It also got itself into thousands of __[Hilton](https://robinhood.com/stocks/HLT/)__ gyms, hoping to lure new customers.

Riding with your favorite instructor (Ezra Shaw/Getty Images)

Spin

__The road less traveled can be smoother…__ Instead of giving up when its core spin-bike biz faltered, Peloton leaned into subscriptions, which are less cost-intensive than hardware. Now it’s trying to return to growth by leveraging its charismatic instructors and mobile-friendly classes. By promoting subs to *non*-Peloton owners, it could ride the fitness-for-all strategy to a gradual recovery. 

Peloton’s subscription pivot helped spin down losses — and spin up its struggling stock

__When all-time highs = industry lows…__ Crypto hackers had a banner year, stealing a record $3.8B last year, __Chainalysis__ [reported](https://blog.chainalysis.com/reports/2022-biggest-year-ever-for-crypto-hacking/). It tops the previous year's record of $3.3B. DeFi (aka decentralized finance) represented 82%+ of those losses:

- __DeFined:__ DeFi protocols (like: __Uniswap__ and Tornado Cash) are permissionless. They let people trade crypto directly without go-betweens like centralized exchanges. 
- __CeFined:__ Centralized finance (CeFi) is more akin to traditional finance (meet: TradFi) because activity runs through a centralized entity like a crypto exchange. 
- __Bridged:__ DeFi protocols like cross-chain bridges — which let people move assets between blockchains — were like catnip to attackers, accounting for 64% of DeFi's losses. 

__Not so CeFine…__ As numerous CeFi crypto lenders went bankrupt last year (think: __BlockFi__, __[Celsius](https://snacks.robinhood.com/newsletters/74Rmw5VlxBTIazWlkKzrHf/articles/3f7BisGSpk0jgZKhOePwTn/)__, __[Genesis](https://snacks.robinhood.com/newsletters/4BoEiy5bSjKJygt8GDtUW3/articles/7tW8jp8mSs2CeUREvHmMNe/)__) and crypto exchange __FTX__ [blew up](https://snacks.robinhood.com/newsletters/5oS3vfl3q3m34Ud64MuTOf/articles/6GVY28qbI5kcW4Y5gvzbIM/), some crypto enthusiasts pointed to DeFi as a path forward. The argument: a CEO like Sam Bankman-Fried couldn't be accused of stealing your crypto if they never touched it in the first place. But as last year’s head-turning crime #s show, DeFi’s not immune either. Case in point: last year North Korea-linked hackers stole $1.1B from DeFi protocols. 

Loot

__You need a solid foundation to BUIDL…__ crypto speak for "build." As CeFi stumbled, some crypto fans believed it could be DeFi’s time to shine. But two straight record-setting years of crypto crime suggest DeFi still has work to do if it wants to provide a path out of CeFi's rubble. One hope: DeFi's public-facing nature means investigators can follow looted crypto across blockchains — suggesting that while hackers can run, they may have trouble hiding.

Crypto hackers set a looting record last year, casting a shadow on DeFi's bright promise

Dow Jones

S&P 500

Nasdaq

Bitcoin

Boeing just made its final 747 delivery, marking the end for the famous jumbo jet

🚲 Peloton’s subscription sprint

__When shuffle plays your fave song…__ Bingo. __[Spotify](https://robinhood.com/stocks/SPOT/)__ shares popped 12% yesterday after the Swedish streamer [reported](https://www.cnbc.com/2023/01/31/spotify-spot-earnings-q4-2022.html) expectation-beating quarterly revenue and upbeat user growth. Spotify had its largest spike *ever* in monthly active users, with listeners up 20% to a whopping 489M. Ad-free paid subscribers jumped 14% to 205M. 

- __Spotify’s top line looks great.__ Its bottom line, *not so much*. Despite its green logo, Spotify is still deeply unprofitable, and last quarter its losses widened to $250M.

__Put it on mute…__ Spotify said its big growth was driven by podcasts. But big pod investments have also fueled big losses. ICYMI: Spotify has splurged $1B+ on pod-related purchases like The Ringer and Parcast, *plus* exclusive shows like “The Joe Rogan Experience” (reportedly for $200M+) and “Call Her Daddy” (reportedly for $60M). Pricey pod-vestments fueled growth, but also burned a hole in Spotify’s pockets. 

- __Spotify laid off 600 employees__ last week in a reorg that included the exit of its chief content officer, Dawn Ostroff, who was at the helm of huge pod deals. 
- __End of the pod-palooza?__ Spotify execs vowed that 2022 was the year of peak losses (read: they’ll try to get closer to profitability from now on). 
- __On the mic:__ CEO Daniel Ek said that pods have been a drag on profit margins and that some shows haven’t performed as well as expected. 

The end of the pod-palooza era? (Cindy Ord/Getty Images)

Unpod

__“Growth at all costs” comes at a cost…__ and many aren’t willing to pay it anymore. In this uncertain economy, the focus has shifted from supercharging growth to cutting costs and maximizing profits. Ek [summarized](https://deadline.com/2023/01/spotify-ceo-daniel-ek-podcasts-investing-dawn-oststroff-fourth-quarter-losses-subscriber-growth-1235245223/) it thus: “You go for growth first and then you seek efficiency. Generally, you will see us focus on efficiency… not just growth at all costs.”

Spotify adds record users, but the “growth at all costs” pod-palooza could be dead

__Waiting 30 mins for the McRib…__ worth it. __[McDonald’s](https://robinhood.com/stocks/MCD/)__ [served](https://www.cnbc.com/2023/01/31/mcdonalds-mcd-q4-2022-earnings.html) up hearty earnings after more fast-food lovers headed to the Golden Arches last quarter. McD’s same-store sales in the US jumped 10%, thanks in part to the “farewell tour” of its cult fave McRib. Abroad, same-store sales spiked ~13% — and make up over half of all quarterly revenue — thanks to stronger demand in countries like the UK, France, and Germany. 

- __Nugget nostalgia:__ McD’s “adult Happy Meal” promo drove the highest weekly digi-transactions ever in the US. Half of the meals sold out in the first four days.
- __Deep-fried footprint:__ While McD’s execs expect a “mild to moderate” recession this year, they still plan to open nearly 2K new restaurants — 100+ more than they had forecast last year.

__Unwrapping deals…__ Inflation’s finally cooling, but many consumers are trading down from full-service restaurants as budgets stay tight. Nearly a quarter of consumers say they’ve turned to fast-food since it can sometimes be cheaper than cooking at home. But not all combos are created equal: 

- __Fancy fries:__ Menu prices at rivals like __Chick-fil-A__ and __Taco Bell__ rose about 15% from 2021 to last year, while __[Wendy’s](https://robinhood.com/stocks/WEN/)__ prices soared 35% in the same period. 
- __Slow rise:__ McDonald’s — which actually *decreased* prices 5% — said that while lower-income consumers are ordering less, they’re returning more frequently than in previous quarters.

Combo

__Consistency is king…__ but surprise is queen. McDonald’s has been relatively consistent with its low prices and classic McMenu items, but it has also sprinkled in spontaneity with buzzy promos. While rivals have leaned on higher prices to raise revenue, McD’s leans on cult faves and fresh tastes to juice demand. Last year, McD’s celeb-inspired meal [collabs](https://snacks.robinhood.com/newsletters/6lzvLrthhcs2XAAKrGo75i/articles/2tlVc1V2nx6jY75DFlpmKO/) with stars like Travis Scott, BTS, and J. Balvin were key in driving digital sales.

McDonald’s posts tasty growth as inflation-friendly prices and cult faves spark a fast-food frenzy

*🖊️ Like taking a Sharpie to a digital dollar bill…*

The OG crypto is playing catch-up. A recent addition to bitcoin lets people add text, images, or video to individual “satoshis” (think: the smallest unit of BTC). It essentially creates bitcoin-native NFTs. Dubbed "[ordinals](https://www.bloomberg.com/news/articles/2023-01-30/nfts-coming-to-bitcoin-sparks-handwringing-about-crypto-purists)," the new protocol and its on-chain digital artifacts have sparked a mini [controversy](https://www.coindesk.com/tech/2023/01/31/bitcoin-community-erupts-in-existential-debate-over-nft-project-ordinals/), with some in the crypto community saying they'll drive up transaction fees.

DEFI(NE)

Heard on the Block: "ordinals"

Spotify adds record users, but the “growth at all costs” pod-palooza could be over

Lucy Stanton became the first Black woman in America to earn a four-year college degree after graduating from Oberlin in 1850

🎵 Spotify’s profitless pod boom

__More a-Ford-able…__ __[Ford](https://robinhood.com/stocks/F/)__ is following __[Tesla](https://robinhood.com/stocks/TSLA/)__ down the discount road: the Detroit carmaker said it’ll slash prices of its electric Mustang Mach-E crossover by an average of $4.5K. It also plans to boost production from 78K units/year to 130K. The Mach-E helped Ford become America’s second-best-selling EV maker, with 65K+ electric cars sold in the US last year (trailing Tesla’s 500K+). Recently __Tesla__ also announced price cuts, including slashing its Model Y price tag by up to $13K.

- __Less profit:__ With the cuts, the Mach-E will have a starting price of $46K. The markdowns mean that not all Mach-E models will be profitable on a per-unit basis. 
- __More saving:__ Ford expects to offset some of that profit drop with streamlined production and lower commodity costs. FYI: Ford reports on Thursday.
- __Ford stock lost__ 3% yesterday after the news. But investors had reacted positively to *Tesla’s* cuts, hoping that lower prices would boost sales. 

__Everyone wants to be an EV player…__ The markdowns from America’s two largest EV sellers are all about revving up demand as competition booms (partly thanks to subsidies). From old-school players like __[GM](https://robinhood.com/stocks/GM/)__ and __[Toyota](https://robinhood.com/stocks/TM/)__ to electric-first companies like __[Rivian](https://robinhood.com/stocks/RIVN/)__ and __[Lucid](https://robinhood.com/stocks/LCID/)__, carmakers are doubling down on EV ambitions. While the US lags behind China and Europe in electric adoption, full-electric vehicles accounted for nearly 6% of all cars sold in the US last year — up from 3% in 2021. 

Smells like EV deflation (Frederic J. Brown/Getty Images)

Juicy

__The trend-setter can be the price-setter…__ Tesla made EVs cool and spurred electric adoption with its sleek and techy models, setting the standard for electric luxury. Tesla’s also the world’s leading EV maker, and its price moves set a *price* standard for other EV players. When it cuts prices, other carmakers could feel pressure to do the same to keep demand in check.

Ford follows trend-setter Tesla by slashing EV prices as electric competition revs up

__Beyond the grocery aisle…__ into high-margin style. __[Walmart's](https://robinhood.com/stocks/WMT/)__ going for a new look (which could make it harder for you to reach the grocery section). The big-box behemoth [remodeled](https://www.cnbc.com/2023/01/28/walmart-new-sleek-store-designs.html) six of its SuperCenter mega stores to focus shoppers' attention on clothes, makeup, pet supplies, and furniture — all items with higher profit margins than groceries. A $30 floral dress that costs $3 to produce typically brings home more profit than a box of cereal. 

- __Front and center:__ Picture snazzy mannequins under spotlights at the front of the store, eye-catching cosmetics displays, and colorful pet-supply sections. 
- __Try it on:__ At least 30 more Walmart stores have adopted elements of the fanci-fied makeover. Walmart’s trying to pump profits after posting a loss in its October quarter.

__Come for the juice…__ stay for the jeans. As America’s largest grocer, Walmart has always used affordable groceries as a hook (groceries = over half of Walmart’s sales). As food inflation squeezed budgets last year, higher-earning households switched to Walmart for groceries. Now it hopes it can persuade them to spend on more than just hummus and salmon. But it might not be easy: consumers have been cutting back on discretionary merch spend. 

Dressy

__Dress for the profits you want…__ because new looks can lure new pocketbooks. Walmart became the grocery go-to thanks to competitive prices and its network of 5K+ US stores. By spotlighting its fashion and makeup offerings, Walmart's hoping that grocery-hooked customers will venture past the grapefruits and toward the swimsuits. 

Walmart’s snazzy makeovers aim to put more profitable products front and center

Toyota defended its title as earth’s best-selling automaker with 10.5M cars sold last year

🚙 Ford’s Tesla response

__Ignoring the (three) bears…__ The economy ≠ the stock market, but markets rallied last week after GDP #s showed the US economy grew an expectation-beating 2.9% in the final quarter of last year. The icing on the cake: the pace of growth slowed slightly from the previous quarter, suggesting the Fed's hikes are *gently* cooling the economy rather than freezing it. That’s reviving hopes for a Goldilocks-like "[soft landing.](https://www.bloomberg.com/news/articles/2023-01-27/fed-sees-soft-landing-as-silver-lining-of-temp-jobs-decline)" The ingredients:

- __Not too hot:__ Temp jobs fell for the fifth straight month, raising hopes that the labor market could cool *without* erasing many full-time roles. But fresh layoff announcements from companies like __[IBM](https://robinhood.com/stocks/IBM/)__ and __[Hasbro](https://robinhood.com/stocks/HAS/)__ could change the picture. 
- __Not too cold:__ Inflation cooled again last month, ending the year at 6.5% (still way above the Fed's target). And while job growth is slowing, the labor market’s still historically strong. 

__Juuuust right…__ Experts say continued consumer spending, which rose 2.1% last quarter but ticked down last month, will be key to avoiding a recession. While consumers are starting to rein in their daily budgets, some are "[revenge inflation spending](https://www.wsj.com/articles/inflation-spending-luxury-travel-clothing-food-11674502204)" on major purchases. __[American Express’s](https://robinhood.com/stocks/AXP/)__ CFO said spending on experiential splurges like travel is "off the charts." Still, while consumer sentiment has improved this year, it’s still near historic lows. 

J. Powell preps the porridge (Andrew Caballero-Reynolds/Getty Images)

Golden

__A fairy-tale ending isn’t guaranteed…__ While optimism is up, some experts say there's still plenty of room for concern (and a Q3 recession). The Fed, which meets tomorrow and Wednesday, is expected to continue raising rates over the next two months — though at a slower pace than those past “jumbo” hikes. Fed officials said they don't expect to cut rates this year, but analysts think cuts could come as soon as September. We’ll see whether Fed Chair Powell squashes the market’s optimism.

Investors hope for a Goldilocks-style soft landing, but the proof will be in the Fed’s porridge

__Ad-pocalypse now?...__ __[Google](https://robinhood.com/stocks/GOOGL/)__ and __[Meta](https://robinhood.com/stocks/META/)__ report this week, at a complicated time for the industry. Ads make up 80% of Google’s revenue, and *98%* of Meta’s. But in their last-reported quarters, Meta saw an annual drop in ad revenue while Google’s growth slowed. Meanwhile, Google’s dealing with an existential threat from ChatGPT, with a DOJ lawsuit that seeks to break up its ad biz. Facebook’s growth stalled last year and Insta barely grew as users flocked to TikTok (bringing ad bucks with ’em). Analysts expect lower earnings from the ad titans.

__Apple's core…__ could be softer than usual. A year ago __[Apple](https://robinhood.com/stocks/AAPL/)__ reported record sales in its blockbuster holiday quarter. That could be hard to beat this year, as Covid crackdowns in China disrupted iPhone production (iPhones make up over half of Apple’s sales). Last year, global smartphone shipments posted their largest drop *ever*. The world’s most valuable public company is expected to report lower earnings and sales on Thursday. Still, Apple's the only Big Techie that’s avoided mass layoffs so far (partly since it didn’t do a mass hiring spree). 

Events

Coming up this week

__Prime pills…__ Call it a prescription subscription. Last week __[Amazon](https://robinhood.com/stocks/AMZN/)__ [launched](https://snacks.robinhood.com/newsletters/79pjIuyGvvYRy0vRYusvPY/articles/AsPZberidCKIL3eLBLLEK/) a subscription for unlimited meds. With “RxPass,” 168M Prime members can buy pills and get ’em delivered for $5/month (no insurance needed). RxPass offers 80 meds (think: blood pressure, anxiety, migraines) and targets people with numerous prescriptions. Nearly half of US adults take *two or more* meds daily, and retailers like Amazon, __[Walmart](https://robinhood.com/stocks/WMT/)__, and __[CVS](https://robinhood.com/stocks/CVS/)__ are scrambling to get a bigger chunk of the lucrative prescription pie. Amazon’s differentiator: offering *many* drugs at a flat rate.

__Living for the jump scares…__ Moviegoers are seeing dead people and studios are seeing green. Horror flicks are giving big blockbusters a run for their money. __Universal Studios’__ and __Blumhouse’s__ “M3gan,” which follows a trendy murderous doll, has already raked in [$130M](https://www.cnbc.com/2023/01/21/m3gan-topping-100-million-horror-movies-box-office.html) at the box office — the latest hit in a series of successful horror releases. “Skinamarink,” an experimental horror with a tiny $15K production budget, earned $1.7M in two weekends. Horror could help boost the recovering movie industry, which is still far from prepandemic levels. 

Zoom Out

Stories we’re watching

- __[Listicle](https://snacks.robinhood.com/newsletters/3AfJ5QticYzqpCcokZ516q/articles/3j7AOj9siIxg2ATa4dA6ye/):__ __Meta__ is reportedly paying __[BuzzFeed](https://robinhood.com/stocks/BZFD/)__ millions to generate viral creator content as engagement falls for both. It’s a symbiotic social relationship. 
- __[Searched](https://snacks.robinhood.com/newsletters/5m7fnGl8GCvlx7gfsQcDYc/articles/rbKFyth6EA3WcU7CNJDVw/):__ __Google’s__ bread-and-butter ad biz could be toast with a new Department of Justice lawsuit. Regulators in the US and EU have been cranking the heat on tech giants. 
- __[Swap](https://snacks.robinhood.com/newsletters/5m7fnGl8GCvlx7gfsQcDYc/articles/6bA9qEJZg44MjxYhiiHkmZ/):__ Tech layoffs are intensifying, but last year 80% of laid-off tech workers found a new gig within three months — and over half of those rehired got pay bumps.

 ICYMI

Last week's highlights

Investors hope for a Goldilocks soft landing, but the proof’s in the Fed’s porridge

Only eight countries have won the World Cup

🍦 Soft landings and Big Tech earnings

__Which T. Swift song are you?...__ __Meta__ hopes it won’t get “Anti-Hero.” The social titan is paying BuzzFeed millions of dollars to help it attract more creators to Facebook and Instagram, the Wall Street Journal [reports](https://www.wsj.com/articles/meta-pays-buzzfeed-millions-to-generate-creator-content-for-facebook-and-instagram-11674693687?mod=business_lead_pos6). Refresher: BuzzFeed is the publicly traded media company famous for viral listicles and quizzes like “what your favorite chicken-nugget shape reveals about your personality.” 

- __Deal:__ As part of a reported $10M deal reached last year, BuzzFeed is said to be helping to generate creator content for FB and Insta — and training creators to grow their presence.

- __Reel:__ It’s part of Meta’s strategy to boost engagement as creators flock to __TikTok__, whose users grew 18% last year. Meanwhile, FB’s growth stalled and Insta grew less than 3%. 

__Your favorite condiment will reveal your biggest fear…__ Meta, which reports earnings next week, has been struggling with slowing growth and shrinking profits. BuzzFeed has been losing money and its stock is down over 60% since it went public in late 2021. Like Meta, it also announced job cuts last year. But both are investing more in *creators*. 

- __Human creators:__ Last year Meta said it would stop paying news publishers to feature their content and would reallocate the $$ to growing its creator biz. And BuzzFeed announced it would double its creator network.

- __AI creators?__ Yesterday BuzzFeed said it would leverage ChatGPT maker __OpenAI__ to help it churn out quizzes and other content. FYI: CNET — which was called out for publishing AI-generated articles riddled with errors and even plagiarism — said it was halting its use of AI for content generation.

Listicle anxiety (Drew Angerer/Getty Images)

Buzz

__It’s a symbiotic social relationship…__ between BuzzFeed and Meta. BuzzFeed’s growth has largely relied on content going viral on Facebook, while Facebook has often relied on BuzzFeed to tap into internet culture and trends. In its last earnings report, BuzzFeed attributed declining engagement on its sites partly to declining traffic from FB. By helping FB boost engagement, BuzzFeed could help itself — and earn millions.

Meta is reportedly paying BuzzFeed millions to generate content as engagement falls for both

__Owing money all over town…__ __FTX__'s "creditor matrix" list was finally [unsealed](https://www.cnn.com/2023/01/26/investing/ftx-creditors-wall-street) this week, and it provides some insight into the $8B+ question looming over the exchange's bankruptcy: to whom, exactly, does it owe all that $$? FYI: We learned last year that the exchange owed its top 50 creditors more than $3B, but the identities remained a mystery. Now the 115-page matrix lists companies that had [some](https://blockworks.co/news/ftx-creditor-matrix-more-than-creditors) connection (picture: vendor, account holder, creditor, landlord) to the exchange. Unsurprisingly, the list includes crypto cos like __[Coinbase](https://robinhood.com/stocks/COIN/)__. Surprisingly:

- __What the tech:__ The matrix includes __Apple__, __Amazon__, __Google__, __Meta__, __[Microsoft](https://robinhood.com/stocks/MSFT/)__, and for some reason — __[Netflix](https://robinhood.com/stocks/NFLX/)__.

- __Ordering out:__ __[DoorDash](https://robinhood.com/stocks/DASH/)__, __[Uber Eats](https://robinhood.com/stocks/UBER/)__, __Caviar__, __Margaritaville Beach Resort__, and, yes, __Coachella__ are also listed.

- __Fly away:__ Airlines including __[Southwest](https://robinhood.com/stocks/LUV/)__, __[Spirit](https://robinhood.com/stocks/SAVE/)__, and __[American](https://robinhood.com/stocks/AAL/)__ make an appearance.

- __It’s unclear why__ those companies are on the list ([Coachella NTFs](https://pitchfork.com/news/coachella-nfts-seemingly-unavailable-amid-ftx-crypto-collapse/), anyone?). 

__Badly scrambled…__ __FTX__'s implosion flipped crypto out of the frying pan and into the fire. While a lot of the companies above seem like unexpected casualties, they’re far from the only ones caught in FTX's downfall (think: [bankrupt](https://snacks.robinhood.com/newsletters/4BoEiy5bSjKJygt8GDtUW3/articles/7tW8jp8mSs2CeUREvHmMNe/) crypto lenders). And the fallout hit more than company coffers: as of last month, 60% of Americans in a CNBC survey said they saw crypto investing as “highly risky” and just 8% had a positive view of cryptocurrencies themselves.

Matrix

__Once bitten, twice crypto shy…__ FTX’s creditor matrix, which notably omits the exchange's almost 10M retail customers, paints a picture of just how mainstream FTX was, at least in its business dealings. Now, with bitcoin up 36%+ in the past month and FTX teasing a potential relaunch, investors will have to decide whether — like former spokesman/current FTX creditor Tom Brady once declared — they're in. [271]

From Netflix to Apple, FTX's creditors list reveals the exchange's surprising connections 

🤔 __Sus… Genesis__ [said](https://www.coindesk.com/tech/2023/01/24/genesis-seeks-209m-from-bitcoin-jesus-over-crypto-options-trades-that-werent-settled/) bitcoin-cash evangelist Roger Ver, aka "Bitcoin Jesus," owes it $21M to settle crypto options. Ver suggested he doesn't have to pay Genesis anything as the bankrupt lender's now, well, bankrupt. 

🤹‍♀️ __Quirky… Porsche__ launched (and quickly [shuttered](https://fortune.com/crypto/2023/01/24/porsche-nft-collection-crash-and-burns-after-lackluster-launch/)) an NFT project after selling only 25% of supply. Nearly 2K NFTs, tied to pictures of white 911 Carreras, went for $1.4K apiece.

🌶️ __Spicy… Circle,__ the biz behind the second-largest stablecoin, USDC, said its $9B plan to go public last year via a SPAC [fizzled](https://www.ft.com/content/10bfdb8e-3a16-4bd2-a979-2d4b4c86ea41) because the SEC dragged its approval heels. SPAC-tivity has [plummeted](https://snacks.robinhood.com/newsletters/KzzfFjx1Ng1lyjGJiZJ0W/articles/3ywag1qgBYXGQTzeuSwAkA/). 

HONK

The Crypto Catch-Up…

UK car production hit its lowest level in 66 years

❓ Meta’s BuzzFeed play

__Google’s bread-and-butter ad biz…__ could be toast. This week the Department of Justice filed an antitrust suit targeting Google’s golden goose: *advertising*. The goal is to break up its digital ad biz, which makes up 80% of the search leader’s sales. The suit alleges that Google abuses its role as one of the largest buyers, sellers, and brokers of digital ads and hurts competition. 

- __Big yikes…__ for Google. The suit calls for the divestiture of Google’s ad exchange and the unwinding of “anticompetitive” ad-quisitions like DoubleClick. 
- __Google says__ the suit “attempts to pick winners and losers in the highly competitive advertising technology sector,” arguing it would raise ad fees and hamper growth. 
- __Searching for a friend…__ Eight states, including California and New York, joined the DOJ’s suit. The court battle could have serious consequences for the ad industry. 

__Google can buy itself flowers…__ but it’ll need to buy lots of lawyers, too, to deal with regulatory break-up tensions. This suit isn’t the only legal drama Google’s dealing with: in 2020 the DOJ filed a suit targeting its search dominance (think: how it’s the default in Safari). That case is expected to go to trial in September. Google’s facing three *additional* antitrust suits from state AGs. Oh, and in September the EU fined Google *$4B* after ruling it had broken competition rules — the EU’s second win in a trio of cases.

Getting toasty in here (Stefani Reynolds/Getty Images)

Toast

__Tech’s biggest threat isn’t deceleration…__ it’s *regulation*. Growth slowdowns have been dominating headlines. But while macro trends can be temporary, regulatory crackdowns change a biz forever. Scrutiny has intensified in recent years: the FTC’s suing to block __[Microsoft’s](https://robinhood.com/stocks/MSFT/)__ $75B __[Activision](https://robinhood.com/stocks/ATVI/)__ acquisition, and it slapped Meta with two antitrust suits. The DOJ’s investigating __[Apple](https://robinhood.com/stocks/AAPL/)__, while the EU has opened cases against __[Meta](https://robinhood.com/stocks/META/)__, __[Google](https://robinhood.com/stocks/GOOGL/)__, and others. Meanwhile, President Biden has urged lawmakers to rein in tech titans with legislation.

Google’s profit-puppy ad biz is under threat as regulators crank up the heat on tech giants

__Glancing at the news...__ the job market looks rough — especially for tech workers. More than 57K layoffs were announced in the tech sector this month alone: __[IBM](https://robinhood.com/stocks/IBM/)__ said yesterday it would cut nearly 4K jobs, __Microsoft__ axed 10K, __[Salesforce](https://robinhood.com/stocks/CRM/)__ said goodbye to 8K, and __[Amazon](https://robinhood.com/stocks/AMZN/)__ laid off 18K. Before that, __Meta__ and __[Snap](https://robinhood.com/stocks/SNAP/)__ had let go of a combined 12K+ employees. 

__Dominating your LinkedIn feed…__ While tech layoffs turn heads, they pale in comparison to the jobs *added* during the industry-wide pandemic hiring spree. __Google__, which just laid off 12K employees, had added 37K jobs over the past year alone. California, where many tech cos are headquartered, gained 16.2K nonfarm payroll jobs in December, and the unemployment rate in the greater San Francisco area sat at just 2% last month. Meanwhile, Chicago is working hard to [recruit](https://www.bloomberg.com/news/articles/2023-01-25/chicago-seeks-to-lure-foreign-workers-laid-off-by-tech-giants) laid-off foreign tech workers.

- __Let go to level up:__ Last year, 80% of laid-off tech workers found a new gig within three months. And over half of those rehired got pay *increases*. 
- __Musical chairs:__ Three-fourths of let-go tech workers found new jobs in the same industry.

Hired

__The tech market ≠ the job market…__ The "information" sector employs only 2% of US workers. Despite doom-and-gloom headlines, the *overall* unemployment rate is at historic lows and economists [aren’t worried](https://www.barrons.com/articles/economists-tech-microsoft-spotify-layoffs-51674512876) — so far. Just this week: __[Walmart](https://robinhood.com/stocks/WMT/)__, America’s largest private employer, said it's *upping* its minimum wage for store staff to retain and attract workers in a competitive labor market. We'll see whether that strength held up into the new year when January's employment numbers drop next week. 

Tech layoffs are stealing the show, but economists say the job market's still a star

Google’s bread-and-butter biz could be toast as the DOJ tries to break up its ads unit

Two in three Americans couldn’t cover a $400 emergency, a new survey suggests

🍞 Google’s bread threat

__A pack of migraine meds…__ with your monthly TP delivery. __[Amazon](https://robinhood.com/stocks/AMZN/)’s__ doubling down on its pharmacy biz with a [new](https://www.aboutamazon.com/news/retail/introducing-rxpass-from-amazon-pharmacy-a-5-prescription-subscription-that-helps-prime-members-who-take-multiple-medications-save-time-and-money) prescription-drug subscription. Prime members can now buy unlimited meds (and get ’em delivered to their doorstep) for a flat fee of $5/month — no insurance necessary. The subscription (dubbed “RXPass”) offers 80 medications for everything from high blood pressure to anxiety. Amazon’s targeting people who are juggling numerous prescriptions: 150M+ Americans take one or more of the drugs included in the RXPass.

- __Look back:__ Amazon [bought](https://snacks.robinhood.com/newsletters/2wPRmRTzXsZZPrXKhazVKD/) online pharmacy PillPack for $750M in 2018 and splurged nearly $4B on membership-based health-clinic chain __[One Medical](https://robinhood.com/stocks/ONEM/)__ last year.

- __Pill pack:__ So far only 14% of prescription customers know about Amazon’s PillPack online pharmacy, but over a third say they plan to switch pharmacies in the next year.

__Getting crowded…__ Nearly half of US adults take two or more meds daily, and a quarter say it’s difficult to afford the treatment they need. Now retailers are scrambling to get more prescription business. In 2021 __[Walmart](https://robinhood.com/stocks/WMT/)__ added prescription discounts to its Walmart+ membership program. Mark Cuban’s discounted __Cost Plus__ e-pharmacy attracted 1.5M customers just a year after launching. Meanwhile, __[CVS](https://robinhood.com/stocks/CVS/)__ and __[Walgreens](https://robinhood.com/stocks/WBA/)__ have ramped up their prescription offerings with features like mobile ordering and delivery. Amazon’s big differentiator: offering *many* drugs at one flat rate.

Adding pharmacy to cart (Igor Golovniov/Getty Images)

__Old roads can open new paths…__ Amazon’s been moving into healthcare for years, but has yet to make a big mark in the $500B pharmacy retail space. Now it’s using its “old road” strengths (think: 168M Prime subscribers and a massive delivery network) to get ahead. Its bid is promising: nearly two-thirds of brick-and-mortar pharmacy customers have a Prime account.

Amazon unveils a $5/month unlimited meds subscription as retailers race into pill delivery

__Soft landing…__ __[Microsoft](https://robinhood.com/stocks/MSFT/)__ kicked off Big Tech earnings yesterday on an upbeat note. Shares of the software titan spiked 4% after it reported (slightly) better-than-expected earnings, courtesy of solid cloud growth. Microsoft’s cloud-computing unit — aka: the second-largest cloud biz after __Amazon’s__ AWS — grew revenue by 31% from last year, a slowdown from previous quarters. Investors were uplifted by the small earnings beat, but Microsoft’s reality is not so suite: 

- __Far from Excel-ent:__ Total sales grew at the slowest pace since 2016, and profit dropped for the first time in *eight* years (from $18.7B last year, to $16.4B).

- __Iffy Outlook:__ Last week Microsoft said it was slashing 10K workers to prepare for a recession as the remote-work boom wanes. 

__New year, new me…__ Microsoft is the first of the Big Tech Five (__[Apple](https://robinhood.com/stocks/AAPL/)__, Amazon, __[Google](https://robinhood.com/stocks/GOOGL/)__, Microsoft, __[Meta](https://robinhood.com/stocks/META/)__) to report. In 2021, they [demolished](https://snacks.robinhood.com/newsletters/4yfojyZE9WLvdIySo7B6GF/articles/5HHwtkiQ6PZUclm1Kohn61/) earnings with jaw-dropping records. In May of that year, Microsoft posted its strongest revenue growth since 2018, while Apple and Amazon delivered quarterly records. This year, it’s a different story: 

- __The remaining four of the Big Tech Five__ are also expected to release lower quarterly earnings as demand slows, recession fears grow, and layoffs abound.

Word

__When the going gets tough, get more going…__ Even as cloud and PC demand slows, Microsoft’s not backing down from big spending: it just announced a multiyear, multi*billion*-dollar investment in ChatGPT maker __OpenAI__ — *and* is still aggressively [trying](https://www.playstationlifestyle.net/2023/01/24/microsoft-activision-deal-sony-subpoena/) to complete its $69B acquisition of gaming company __[Activision Blizzard](https://robinhood.com/stocks/ATVI/)__. By doubling down on generative-AI tools and gaming, Microsoft’s hoping to energize growth with new tech.

Microsoft reports slowing growth and a rare profit drop, but is still investing billions

Amazon rolls out a $5/month unlimited meds subscription as retailers race into pill delivery

Scientists captured a radio signal that was emitted from a distant galaxy 8B+ years ago

💊 Amazon Prime pills

__Forgetting the CVV digits…__ Big banks are joining forces to [launch](https://www.wsj.com/articles/banks-plan-payment-wallet-to-compete-with-paypal-apple-pay-11674433472) a digital wallet that could rival __[Apple Pay](https://robinhood.com/stocks/AAPL/)__ and __[PayPal](https://robinhood.com/stocks/PYPL/)__ and allow their 150M+ card holders to check out online *without* grabbing their plastic. Banks have teamed up before: in 2017 __[JPMorgan Chase](https://robinhood.com/stocks/JPM/)__, __[Wells Fargo](https://robinhood.com/stocks/WFC/)__, __[Bank of America](https://robinhood.com/stocks/BAC/)__, and others launched peer-to-peer payment biz Zelle — which surprisingly moves more $$ than Venmo and Cash App *combined*. Now…

- __Same squad:__ Big banks are planning a digital wallet that’ll be run by Early Warning Service, the bank-owned company that runs Zelle.
- __Fresh wad:__ It’ll start as an online checkout option (with a physical card for in-store purchases), but could eventually work as a swipe-less wallet à la Apple Pay.

__Tap-to-pay anxiety…__ Banks are wor­ried about los­ing customer loyalty as companies like Apple and PayPal promote their own financial products (Apple’s even working on a savings account with __[Goldman Sachs](https://robinhood.com/stocks/GS/)__). Apple Pay has surged in popularity since its 2014 launch: an estimated one in six US consumers uses it at least once a month. Meanwhile, __PayPal__ has 400M+ global users and controls over a third of the online payment market share. 

No wallet, no problem (Duane Prokop/Getty Images)

Swiped

__If you can't beat ’em, join ’em…__ or at least launch a competing product. With deal revenue shrinking, it’s more important than ever for banks to keep their retail customers loyal — especially at the digital checkout aisle. Over half of US consumers tried a new payment method last year, with many using digi-wallets for the first time. The global contactless payment market is forecast to quintuple by 2030. 

Big banks plan a digital wallet to rival Apple Pay as plastic-free payments take over

__More like terminus…__ One of the last big crypto lenders standing officially threw in the towel. __Genesis__, part of the __DCG__ crypto conglomerate, [declared](https://www.bloomberg.com/news/articles/2023-01-20/crypto-lender-genesis-seeks-quick-exit-from-bankruptcy) bankruptcy late last week with plans to get the restructuring ball rolling by May. The goal: break itself apart and sell the pieces to repay creditors — of which there are plenty. 

- __Towering:__ __Babel Finance__, which offers mining and crypto-lending services, says Genesis owes it $150M. 
- __Gemin-high:__ The Winklevoss-helmed crypto exchange __Gemini__ says Genesis owes its customers $900M. It also [reportedly](https://www.theinformation.com/articles/gemini-is-laying-off-10-of-staff-marking-latest-blow-for-winklevoss-crypto-startup) announced job cuts yesterday.

__The end of a chapter…__ and the beginning of Chapter 11. Genesis was a major player in the crypto-lending world, lending out $130B+ in 2021 alone. Cracks appeared when crypto hedge fund __3AC__ collapsed in July, taking $1.2B of Genesis' funds with it. __FTX's__ November implosion, which jolted the market, widened those already deep fissures. Now Genesis follows __Celsius__, __Voyager__, and __BlockFi__ into bankruptcy. 

Chapter

__Crypto lending's “Wild West” days could be over…__ For years crypto lenders acted like banks — lending out customer deposits — but without the same regulations and controls that banks are subject to. As high-profile bankruptcies pile up, regulators are cracking down. The SEC charged Genesis with offering unregistered securities this month, and lenders like __Nexo__ are paying multimillion-dollar settlements. Experts say that to stage a comeback crypto lenders will need to up their risk-management game — or risk going the way of the cowboy.

Genesis follows other crypto lenders into bankruptcy, signaling the end of crypto lending as we know it 

💸 When someone promises to pay you back "and then some"...

Money deposited in a bank usually doesn’t just sit there. Banks can lend out idle $$ and offer their customers interest payments on deposits. Crypto lenders proposed a similar model, attracting deposits by advertising "yield" — (in)famously as high as 18% — on deposited crypto. Now, as crypto lenders topple, some customers are [struggling](https://www.ft.com/content/64648e10-cc09-4304-a274-87b66d37d3bc) to get their deposits back.

Heard on the Block: "crypto yield"

“Avatar: The Way of Water” is the third James Cameron movie to rake in $2B

💳 Banks come for Apple Pay

__Reaching for the grocery-brand peas…__ After years of stimulus-fueled spending sprees, consumers are finally starting to pump the breaks. Last month, US retail sales posted their biggest monthly drop since 2021 as shoppers cut back on holiday splurges. From __[McDonald’s](https://robinhood.com/stocks/MCD/)__ to __[Amazon](https://robinhood.com/stocks/AMZN/)__, most companies have hiked prices to offset higher costs. But as consumers rein in spending, the hiking spree could lose steam:

- __Pantry staple__ __[Conagra](https://robinhood.com/stocks/CAG/)__ said it plans to *stop* raising prices for kitchen faves like Chef Boyardee, Slim Jims, and Birds Eye — but that could change if inflation sticks.
- __Booze giant__ __[Constellation Brands](https://robinhood.com/stocks/STZ/)__ has raised prices of brews like Corona and Modelo more than usual, but is planning “more muted” increases this year as demand slows.
- __Aisle all-star__ __[Procter & Gamble](https://robinhood.com/stocks/PG/)__ saw sales and profit fall last quarter while shoppers cut back on price-hiked brands like Tide, Charmin, and Crest as they opted for cheaper alts. 

__Charging it to the card…__ Despite stubborn inflation, consumer spending has stayed strong during the pandemic — thanks partly to padded stimulus savings. But Americans are running out of cash, and a fifth of adults say their monthly expenses are higher than their earnings. US credit-card debt is at an all-time high, and the personal-savings rate fell to a 17-year low in October. Meanwhile, big biz leaders like __[Chase’s](https://robinhood.com/stocks/JPM/)__ Jamie Dimon and Elon Musk are warning of a global recession this year.

Skipping the name brands (Matt McClain/Getty Images)

Pinched

__It could get worse before it gets better…__ While spending’s slowing and prices are *finally* cooling, inflation’s not where the Fed wants it to be (read: still abnormally high). Plus, the labor market is still going strong. While the central bank has started to reduce the size of rate hikes, officials like Fed Chair Jerome Powell doubled down on their hawkish stance last week. A quarter-point hike is expected next month, and it could take until the end of the year (or later) for the Fed to actually start *cutting* rates.

From Tide to Slim Jims, consumers are cooling their spend — but rates could keep heating up

__Cloudy with a chance of growth stalls…__ __Microsoft__ kicks off Big Tech earnings tomorrow during a *rough* time for tech titans. Seemingly everyone from Amazon to Google has announced mass layoffs this year — __Amazon’s__ even ending its charity program to cut costs. Last week Microsoft said it was slashing 10K workers to prep for a recession. It’s expected to report its slowest sales growth in five years and its first earnings drop in *eight*. It’s not alone: __[Apple](https://robinhood.com/stocks/AAPL/)__, __Google__, __Amazon__, and __[Meta](https://robinhood.com/stocks/META/)__ are also expected to release lower quarterly earnings. 

__Big Gas energy…__ From __[Exxon](https://robinhood.com/stocks/XOM/)__ to __[Marathon Petroleum](https://robinhood.com/stocks/MPC/)__, oil giants raked it in last year as gasoline prices soared, notching historically huge profits. In the first quarter, __[Chevron’s](https://robinhood.com/stocks/CVX/)__ earnings more than *quadrupled*. Energy was the only stock sector that ended last year in the green. But prices at the pump have been falling: US gas prices fell 9.4% in December from November, and were down for the year. Still, *overall* energy prices were up 7% from last year. Chevron and Valero are expected to report revenue growth this week — but at a slower pace than last year.

__IOU anxiety…__ The US hit its $31.4T debt limit last week, risking a scenario where the US government can’t pay its bills. Refresher: the govt spends more than it collects in taxes, so it constantly borrows. But there’s a limit to how much the Treasury can borrow through bonds/bills. Now the US risks defaulting on its debt, which would be disastrous. A default has never happened since lawmakers passed legislation to raise or suspend the ceiling every time (100 times since WWII). Treasury Secretary Janet Yellen plans to use “extraordinary maneuvers” until June to give lawmakers more time to agree on a solution. 

__AI lawsuits are here.…__ Generative AI tools like ChatGPT and DALL-E are trained on billions of texts or images scraped from the internet — many of which are copyrighted by human creators. Last week artists [sued](https://snacks.robinhood.com/newsletters/31MZjQaxwyvgzBaiazKUYy/articles/6JYfIJADVE53b21M5kUtl1/) AI-art generators __Stability AI__, __Midjourney__, and __DeviantArt__, arguing they unlawfully used their copyrighted images. __[Getty Images](https://robinhood.com/stocks/GETY/)__ sued Stability AI over the same thing. There aren’t clear rules around genAI use, but suits could set precedents for how to handle these cases. It could get thorny for companies like __Microsoft__, which plans to integrate genAI into its products. 

- __[Wednesday](https://snacks.robinhood.com/newsletters/4Anxo2cnMEReQ6L4UxR1Za/articles/62GSVOtnhFGuX17dBbM6ow/):__ __[Netflix](https://robinhood.com/stocks/NFLX/)__ surged after reporting *3M* more new subs than expected. But its revenue and profits were nothing to celebrate, and the “one-number era” could be over. 
- __[420](https://snacks.robinhood.com/newsletters/6rSw3Ie5AUUIfYOAD2njtZ/):__ Elon Musk went to court over his infamous “funding secured” tweet about taking Tesla private. He’s used to ruffling feathers, but this trial could hit __[Tesla’s](https://robinhood.com/stocks/TSLA/)__ rep. 
- __[Swing](https://snacks.robinhood.com/newsletters/4Anxo2cnMEReQ6L4UxR1Za/articles/3ntwYcSOdZ6nSpvGmIOTol/):__ Saudi-backed __LIV Golf__ signed its first TV deal in the US with tween-fave network __CW__. LIV’s beef with the PGA has made it harder to secure revenue streams.

ICYMI

EVs made up a record 10% of all new cars sold globally last year

🍽 The spending reset 

__Autoplaying the next episode…__ just one more. __[Netflix](https://robinhood.com/stocks/NFLX/)__ shares surged 7% after the bell yesterday after it announced a subscription shocker: *millions* more subs than expected. The streaming OG added 7.7M paid subscribers last quarter — way better than the 4.5M forecast — as folks signed up to binge faves like “Emily in Paris.”

- __Top quarterly hits:__ “Wednesday” was Netflix’s third most popular series *ever*, while “Harry & Meghan” was its second most popular docuseries. “Glass Onion” got big views too.

- __Major plot twist:__ Netflix announced that its founder and longtime leader, Reed Hastings, would be stepping down from his position as co-CEO.

- __Anticlimax:__ Netflix experienced its slowest quarterly revenue growth of all time (sales up less than 2% from last year) and badly missed on profit expectations (think: $55M compared to $1.4B the previous quarter). 

__When the ad hits on a cliffhanger…__ This was Netflix’s first quarter that included revenue from its $7/month ad-supported offering, which launched in November. But the word “ads” was mentioned just three times in its [earnings report](https://s22.q4cdn.com/959853165/files/doc_financials/2022/q4/FINAL-Q4-22-Shareholder-Letter.pdf) (“advertising” got four mentions). Still, Netflix said it was “pleased with the early results, with still much more to do.” Analysts say they haven’t seen much demand for the cheaper ad tier, which accounted for [only](https://snacks.robinhood.com/newsletters/6PVC1g1zTkOIWMAOCz5HPI/articles/5vY9oa4kPmmqecFo3pry1C/) 9% of November sign-ups.

Wednesdays are for streaming (Michael Tullberg/Getty Images)

Flix

__Netflix’s one-number era could be over…__ Despite disappointing earnings and sluggish revenue growth, investors boosted Netflix stock after hearing its headline subscriber number — which has historically been the focus. But going forward Netflix says it will no longer give subscriber forecasts as it prioritizes *revenue* growth in this saturated streaming market. Ads are part of the new strategy. Netflix is also launching paid sharing to crack down (and profit from) password mooching.

Netflix crushes quarterly subscriber expectations thanks to fan faves like “Wednesday”

__Dustin Johnson heads to “Riverdale”…__ __LIV Golf__ (finally) has a TV partner. Yesterday the Saudi-backed golf tour [sealed](https://www.wsj.com/articles/liv-golf-reaches-deal-to-broadcast-events-on-cw-network-11674136667) a multiyear broadcast deal with the CW network. You might remember the CW for cult-fave teen dramas like “Gossip Girl” and “Vampire Diaries.” Starting next month, LIV will air 14 events on CW’s weekend broadcast and on its app. Before, you could stream LIV only online (think: __[YouTube](https://robinhood.com/stocks/GOOGL/)__).

- __Teed up:__ LIV has caused a stir since its debut last year. It spent billions to [poach](https://snacks.robinhood.com/newsletters/2n1tfbP2sL0dLHd6d2tSbw/) several top players and host flashy golf tournaments that look more like music festivals.

- __Gloves on:__ LIV is in a heated legal dispute with US rival PGA Tour (LIV accused the legacy golf group of monopolizing the sport).

__Scrambling for screen time…__ LIV has struggled to secure key revenue streams like TV rights and sponsors. It’s burning cash, courtesy of billions in Saudi backing. Legacy sports broadcasters like __[CBS](https://robinhood.com/stocks/CBS/)__, __[Comcast’s](https://robinhood.com/stocks/CMCSA/)__ NBC, and __[Disney’s](https://robinhood.com/stocks/DIS/)__ ESPN have avoided working with LIV, because they also stream PGA events. The PGA earns about $600M/year through broadcast deals, and that revenue covers more than half its tournament purses.

Swing

__Home is where the eyeballs are…__ and for LIV network TV could mean millions more viewers. CW is not the go-to broadcaster for golf, but its youthful audience and well-known brand could help LIV reel in old fans and fresh faces. And for CW, LIV’s top-tier players could attract new audiences. In a best-case scenario, LIV could earn up to $410M in broadcast rights by 2028 — but it’ll have to settle its PGA beef first.

Saudi-backed LIV Golf signs its first TV deal with tween fave CW to tee off profits

The richest 1% amassed nearly two-thirds of the new wealth created globally in the past two years