__Nice for bot…__ ICYMI: an AI-generated song featuring the voices of Drake and The Weeknd went viral this week. “Heart on My Sleeve,” posted on TikTok by a bed-sheet-clad user called Ghostwriter977, racked up [millions](https://www.axios.com/2023/04/19/ai-fake-drake-weeknd-song-streaming-services-removed) of streams across YouTube, __[Spotify](https://robinhood.com/stocks/SPOT/)__, Apple Music, and other platforms. The ghostwriter said they wrote and produced the verses for the AI-generated vocals. Then came the takedowns: 

- __Universal Music Group,__ the world’s largest label, which reps Drake and The Weeknd, had the song removed from platforms.

- __Legal verse:__ Universal said “the training of generative AI using our artists’ music” violates copyright law and that “we will not hesitate to take steps to protect our rights and those of our artists.” 

__Fake Drake(s) aren’t the only problem…__ Universal was quick to act, but now *another* Drake fake (“Winter’s Cold”) has hit the internet. Labels like UMG, __[Warner Music Group](https://robinhood.com/stocks/WMG/)__, and __[Sony Music](https://robinhood.com/stocks/SONY/)__ have been effective in aggressively protecting their music (think: YouTube videos and Insta stories being taken down or demonetized). Platforms like YouTube scan videos to see whether they contain copyrighted content, so identification is nearly instant. But AI tracks could be harder to spot. For consumers, it’s also tough to know if a track is authentic because Auto-Tune (used to synthetically improve tracks) is so prevalent.

Champagne Papi meets AI copies (Frazer Harrison/Getty Images)

Drizzy

__It may be endless Whac-A-Mole…__ until hard rules are established for AI-generated content. Copyright issues will likely keep popping up, and not just for the music industry: [media publishers](https://sherwoodmedia.com/snacks/newsletters/ZFPm5hIgbozaPl1FkBr62/) are said to be gearing up for a showdown with __[Microsoft](https://robinhood.com/stocks/MSFT/)__, __[Google](https://robinhood.com/stocks/GOOGL/)__, and __OpenAI__, demanding compensation for use of their articles. Meanwhile, [AI-art lawsuits](https://sherwoodmedia.com/snacks/newsletters/31MZjQaxwyvgzBaiazKUYy/articles/6JYfIJADVE53b21M5kUtl1/) could set precedents for bots trained on copyrighted artwork.

An AI-generated “Drake” song raises alarm bells for labels like Universal Music

__Meatballs and measuring tape…__ Yesterday __Ikea__ said it would invest $2.2B to build up its US biz — its biggest investment *ever* in a single country. Over the next three years, it plans to roll out 17 new stores, creating 2K+ US jobs. The Swedish sofa king also plans to bulk up its fulfillment centers. It notched record sales last year and has slowly grown its market share in the US (its second-largest market by sales after Germany). Now Ikea’s hoping its trendy “low cost, high quality” furniture will turn the US into its top market. 

- __DIY:__ Ikea’s planning to open nine "plan and order points," studios where shoppers can meet with specialists to design their dream home (but have the furniture delivered).

__The great home retreat…__ (not the relaxing kind). Home-furnishing spend has plunged since the pandemic as people ditch home-office builds for Cabo trips. Furniture-store sales generally dipped 2.4% in March from a year ago. The slowdown is starting to nail some of Ikea’s rivals: last quarter, __[Home Depot](https://robinhood.com/stocks/HD/)__ missed its sales expectations for the first time since 2019. __[TJX](https://robinhood.com/stocks/TJX/)__'s HomeGoods saw a 4% sales dip, and __[Bed Bath & Beyond](https://robinhood.com/stocks/BBBY/)__ is reportedly days from filing for bankruptcy. Online furniture retailer __[Wayfair](https://robinhood.com/stocks/W/)__ lost 5M customers last year and posted a $1.3B loss.

Balling

__One brand’s loss is another brand’s opportunity…__ Ikea’s US biz alone racked up nearly $6B in sales last year, attracting some 70M shoppers in stores and about 500M visits online as it kept prices stable compared to rivals. Now, as competitors like Wayfair cut jobs and scale back, Ikea’s doubling down to grow its market share.

As the home-furnishing boom fades, Ikea’s splurging $2B to take over American living rooms

📜 __Policy…__ European lawmakers [approved](https://www.bloomberg.com/news/articles/2023-04-20/eu-s-mica-crypto-regulations-clear-final-parliament-vote) sweeping crypto regs (meet: MiCA) that are expected to take effect this summer. The rules will allow registered companies to operate across the EU, and have been hailed by crypto cos. About that…

🌶️ __Spicy…__ __[Coinbase](https://robinhood.com/stocks/COIN/)__'s CEO said the biz might [exit](https://www.barrons.com/articles/coinbase-ceo-leave-us-stock-crypto-regulation-6d81c3ce) the US in search of greener regulatory pastures, and that a move to the UK is "on the table." The exod-US isn't all bluster: Coinbase [reportedly](https://fortune.com/crypto/2023/04/19/coinbase-gets-bermuda-license-plans-to-launch-offshore-exchange-in-coming-weeks/) plans to launch an offshore exchange.

🧳 __Movin'…__ __Kraken__'s been hit with the travel bug too. The exchange, which earlier this year agreed to a $30M SEC settlement and killed its staking program, [scored](https://fortune.com/crypto/2023/04/18/kraken-digital-asset-license-ireland-vasp-crypto-abroad-crackdown/) a license to operate in Ireland.

VACAY

The Crypto Catch-Up…

Dow Jones

S&P 500

Nasdaq

Bitcoin

New York City has the world's wealthiest population with 340K millionaires

🎵 Fake Drake, real problems

__RIP red-envelope DVDs…__ this one’s for you. __Netflix__ shares dipped yesterday, and not because the streamer announced it’s ending DVD rentals (was still a thing). It added only 1.7M new subscribers last quarter — fewer than half what Wall Street was expecting. Netflix said subscriber growth would be similar this quarter, but hopes for brighter days ahead. 

- __Play next…__ ad. After rolling out in November, Netflix's $7/month US ad-tier now earns more revenue per subscriber than its standard plan, which costs twice as much.

- __Three months left…__ to use your ex’s password. Netflix delayed its global “paid sharing” plan (ahem, password-mooching crackdown) in the US and other major markets until June. It doesn’t expect the extra $$ to kick in till the third quarter. 

__Are you still watching…__ on Mom’s account? 100M people use someone else's Netflix without paying. In February, the streaming icon launched its paid-sharing plan in countries including Canada, Spain, and New Zealand. Cue: searches for “cancel Netflix account” soared 8X. FYI: nearly two-thirds of zillennials have canceled a streaming sub in the past six months. 

- __But Netflix said the initial “cancel reaction”__ was followed by a boost in subscriptions and revenue. Canadian subs have grown since the crackdown, despite it costing $8/month to add new users to accounts — and revenue there is growing faster than in the US.

The beef is with the password crackdown (Michael Buckner/Getty Images)

Share

__Good content captures eyeballs…__ but must-see content captures wallets. No one wants to pay yet another monthly subscription fee. But Netflix hopes that its multibillion-dollar content budget (and loyal watchers of series like “You” and “Outer Banks”) will shell out to stay. While the “cancel reaction” could lose casual watchers, it may add lifelong subscribers.

Netflix posts anticlimactic results, but hopes its mooching crackdown will fuel growth


__“Cause it's like you're my mirror”…__ but maybe not for long. __[Lululemon](https://robinhood.com/stocks/LULU/)__ [reportedly](https://www.cnbc.com/2023/04/18/lululemon-sale-mirror-hydrow.html) wants to offload its in-home-fitness biz, Mirror, to its competitor __Hydrow__. The soft-pants producer bought the exercise startup for $500M in 2020 as living-room sweat sessions drove sales (goodbye suits and gym memberships, hello leggings and __[Pelotons](https://robinhood.com/stocks/PTON/)__). Now the 70-pound wall-mounted “mirror,” which displays fitness classes, is weighing down profits.

- __Self-reflection:__ In its last reported quarter, Lululemon said it took a nearly $443M impairment charge related to Mirror.

- __Losing more than a few pound$...__ Lululemon discounted the Mirror device to $1K (down from $1.5K) as sales came in below expectations.

__Buffing out the profit problem…__ Mirror's drag on earnings has threatened to sour Lulu's otherwise sweet business. Last month the company's stock stretched up after it beat expectations (picture: a 30% sales jump) and shared rosier-than-expected guidance. Other comfy-first brands that saw a pandemic bump (like __[Crocs](https://robinhood.com/stocks/CROX/)__) have likewise seen customers hesitant to shift back to “hard clothes.” But Lulu's rush into hardware hasn't aged as well as its leggings

Jeff Greenberg / Getty Images

BADLUCK

__Striking while the iron's hot can get you burned…__ when the fad cools. At the height of the pandemic, home-exercise tech was a must-have. Peloton went into overdrive trying to keep up with demand for its stationary bikes, and Lulu scrambled to get in on the action with Mirror. But Peloton ended up with a mountain of unsold bikes, and Lulu with Mirrors gathering dust. From indoor bikes to the metaverse to AI, brands that go big on the hot new thing risk mistaking flash-in-the-pan fads for long-term trends.

Lululemon moves to shed Mirror as a pandemic-era home-fitness bet shows cracks

India has surpassed China as the most populous country

🎬 Netflix’s mooching cut

__EXT. HOLLYWOOD — DAY…__ In a nearly unanimous vote this week, 9K members of the Writers Guild of America [approved](https://www.nytimes.com/2023/04/17/business/media/hollywood-writers-strike-vote.html) a TV and movie writers strike if a new contract agreement isn’t reached by May 1 with studios (aka: their employers). A record 80% of WGA members turned out to vote, signaling clear dissatisfaction among the teams creating your fave shows.

- __Buffering:__ Streamers like __[Netflix](https://robinhood.com/stocks/NFLX/)__ and __[Disney](https://robinhood.com/stocks/DIS/)__+ are playing a major role in the negotiations. Streaming has led to shorter TV seasons and exclusive rights, causing a steep drop in residual payouts to writers (watching “Succession” five times doesn’t count as a rerun). The WGA wants a new formula to account for the shift.

- __WG-AI:__ The union also wants studios to regulate the use of AI — and to bar studios from lowering pay or reducing rights and credits for content that leverages the tech.

- __Not guaranteed:__ The WGA authorized a strike in 2017 but ultimately reached a last-minute deal to avoid one. The last WGA work stoppage, in 2007, lasted three months and cost California over $2B.

__Lights, camera, no action…__ While a strike isn’t certain, Hollywood is making moves to prepare. Streaming platforms have several shows wrapped and ready to roll out in the event of a stoppage, and renewals to shows like “Abbott Elementary” were given out earlier than usual. Networks are also bulking up on animated shows (which are written far in advance) and unscripted TV (maybe Netflix can figure out live reunions by May).

Show business, meet show labor (David McNew/Getty Images)

Scene

__Old rules can catch up to disruptors…__ Now that streaming has transitioned from industry disruptor to industry standard, evading old issues that networks and studios know well (like labor disputes) can only last so long. Similar battles are underway in other tech-disrupted industries like ecomm and ride-hail (think: __[Uber](https://robinhood.com/stocks/UBER/)__'s gig work and taxi union issues).

The WGA approves a Hollywood writers strike, signaling a potential shift for streaming

__Self-soothing with an Amazon order…__ But seven pairs of Crocs won’t help the real problem (neither will that popular fluffy [headband](https://www.wsj.com/articles/tiktok-headband-versed-1d6484e5)). US consumer debt hit a record high of $4.8 *trillion* in February as inflation-strapped Americans took out high-interest loans and maxed out credit cards. The IOU blues are [especially](https://www.wsj.com/articles/young-people-avoid-facing-their-finances-more-than-ever-e853910e?) bad for younger generations:

- __Pricey cold-brew habit:__ Millennials’ average credit-card debt rose nearly 30% in March from a year earlier, hitting a whopping $5.8K, Credit Karma reported.

- __Thrifting or splurging?__ Gen Z’s average credit-card debt soared 40% to $2.8K as Shein hauls and Celsius habits weighed down balances. 

__Need those fuzzy slides…__ to ease the sliding state of finances. April is financial literacy month, but many appear to be choosing “financial avoidance” instead. Sticky inflation, high interest rates, and dwindling savings have fueled anxiety. Psychologists say that ignoring your finances and overspending to cope with stress is typical among younger generations. The pandemic just made it more common. 

- __Saw it on TikTok:__ Social media has exacerbated zillennials’ splurge cycle. Lots of younger users make purchases based on influencer recs, a recent Pew survey suggested. And over 60% of users said they regretted a social-inspired impulse purchase, Bankrate found.

Charge

__The bar for “doing OK” is a lot higher…__ In December, over half of Americans earning more than $100K/year said they lived check to check. As prices rise faster than wages, US workers are demanding a minimum of [$76K](https://www.bloomberg.com/news/articles/2023-04-17/wage-floor-for-us-workers-at-record-76-000-in-ny-fed-survey?srnd=premium) to start a new job — up $2K+ from November. Meanwhile, the overconsumption cycle has also raised the bar for getting by.

Gen Z and millennials rack up record debt as “financial avoidance” leads to retail therapy

20% of Americans who've used buy now, pay later apps have used them to pay for groceries

🍿 Streaming strike

__New nest, who dis…__ __Rovio__, the company behind viral bird-chucking game Angry Birds, yesterday agreed to be [bought](https://www.wsj.com/articles/angry-birds-maker-to-be-bought-by-sega-cd5157b6?mod=hp_lista_pos1) by __[Sega](https://robinhood.com/stocks/SGAMY/)__ for about $776M. Sega is the legendary Japanese console and game maker behind franchises like Sonic the Hedgehog. Now it wants to take its IP to the small screen by tapping Rovio's mobile-game expertise and iconic franchise. 

- __Good egg:__ Angry Birds, launched in 2009, apparently became the first mobile game to be downloaded 1B times. Since then, it's been spun off into movies, cartoons, and more.
- __Your Angry Bird is waiting…__ Sega can leverage Rovio’s “live service” strategy, which uses frequent game updates to keep players coming back (think: notifications). And Rovio can use Sega to expand to non-mobile platforms.

__Mobile-gaming madness…__ The pandemic sparked a surge in scrolly-tappy gaming as couch-bound players splurged on extras like custom avatars and power-ups. Mobile-gaming revenue (finally) cooled 6% in the first quarter of last year, but was still up nearly 30% from prepandemic level. Now old-school gaming companies want in: 

- __Sweet deals:__ Last year __[Take-Two](https://robinhood.com/stocks/TTWO/)__ bought Farmville maker __[Zynga](https://robinhood.com/stocks/ZNGA/)__ for a whopping $12.7B. And in 2019 __[Activision](https://robinhood.com/stocks/ATVI/)__ snatched up Candy Crush parent __King__ for nearly $6B. 
- __Palm-sized:__ __[Nintendo](https://robinhood.com/stocks/NTDOY/)__ has already made billions from dropping smartphone versions of its popular console brands (think: Pokémon GO and Mario Kart Tour). 

On my way to steal your chick (Noam Galai/Getty Images)

Nested

__Small screens can turn into big hits…__ Sega predicts that by 2026 mobile games will make up 56% of the global gaming market (up from 53% last year). By snatching up smaller companies with franchise buzz, companies like Sega can also cash in on franchises (like movies, shows, and toys). This month, Nintendo’s “Super Mario Bros. Movie” became the highest-grossing video-game flick of all time. 

Sega buys Angry Birds for $776M as OG game makers go big on mobile franchises

__AI of the tiger…__ __[Google](https://robinhood.com/stocks/GOOGL/)__, in a (sort of) cautious sprint to maintain its search dominance, is [planning](https://www.nytimes.com/2023/04/16/technology/google-search-engine-ai.html) to launch a batch of AI-powered search features, The New York Times reported. The botty features (codename: “Magi”) are set to be rolled out to 1M US users next month — and 30M by year’s end. Google’s testing the waters for its broader plan to launch a brand-new engine: 

- __New-gle:__ There’s no ETA for Google’s AI-powered search engine, but it would reportedly be more conversational and personalized, and anticipate what users want to see based on past searches.
- __Slew-gle:__ Google’s working on slew of other AI projects, including a tool to generate images in Google Image results, a language-learning chatbot called Tivoli Tutor, and a Chrome assistant called Searchalong.

__Bot anxiety…__ The AI race poses a serious threat to Google’s $162B search business, and rivals like __[Microsoft](https://robinhood.com/stocks/MSFT/)__'s Bing chatbot apparently have the company panicking. News that __Samsung__ might make Bing the default search engine on its devices — a potential $3B loss in revenue — sent __Google__ stock sliding as much as 4% yesterday. A similar __[Apple](https://robinhood.com/stocks/AAPL/)__ contract, worth $20B, is up for renewal this year. Losing its default status on devices like iPhones and Galaxy phones would be devastating for Google.

Search

__It’s hard to stop midrace…__ Hurtling ahead to keep up with the AI pack, Google says it’s trying to move rapidly, safely, *and* ethically all at once — a tough needle to thread. In a “60 Minutes” interview on Sunday, CEO Sundar Pichai warned against rushing out AI products without regulation. But that might be hard to do with competitors bolting ahead. 

Google’s taking a tortoise-and-hare approach to the AI-powered search race

__A tricky Bittr-exit…__ SEC regulators yesterday [accused](https://www.coindesk.com/policy/2023/04/17/crypto-exchange-bittrex-violated-federal-laws-sec-charges-in-lawsuit/) __Bittrex__ of violating federal securities laws, saying the crypto exchange sold securities (and therefore should’ve registered with the commission). The Seattle biz was already planning to cease US operations by month’s end, and had pointed a finger at regulators as a key factor driving its exod-US. Bittrex said it would "vigorously defend" itself against the charges. 

__Not the first, probably not the last…__ Bittrex joins a growing list of crypto companies targeted by US regulators after __FTX__'s collapse. Last month the SEC reportedly told __[Coinbase](https://robinhood.com/stocks/COIN/)__ it was [considering](https://snacks.robinhood.com/newsletters/XV2nKUGd5DMTWDzADnDXy/articles/29eKBjymymQ1oqSGNKt766/) legal action, and the [CFTC](https://snacks.robinhood.com/newsletters/5tWO7MybQ6hruclDYZW4bS/articles/2IF7a4zafGF2KA53v4mz4z/) sued __Binance__. Earlier this year, __Kraken__ axed its staking program for US customers and paid $30M to settle claims that it failed to register with the SEC. Meanwhile, the SEC continues to hire more lawyers for its crypto-enforcement unit.

BITE

__Leaving the court doesn't end the game…__ Bittrex's planned US exit didn't stop regulators' pursuit, and any crypto company considering relocating still risks litigation for past actions. Now both companies and lawmakers are seeking clearer crypto rules. But crypto-focused bills that would’ve provided added regulatory clarity stalled last year. In their place, the rules might be set by a tangled string of lawsuits and court cases. 

The SEC hit Bittrex with charges as the crypto exchange was packing its bags to leave the US

A piece of human brain tissue the size of a grain of sand contains 100K neurons and 1B synapses

🎮 Angry Birds’ new nest

__’Tis the season…__ but it may not be so jolly. Earnings season is upon us, and expectations aren’t high for the first-quarter stocking. Quarterly profits from S&P 500 companies are expected to have dropped 6.8% from last year — that would be the sharpest earnings decline since lockdown-era 2020 and the second straight quarter of falling profit. Meanwhile, analysts expect that sales inched up a measly 1.8%. But the kickoff to earnings season pleasantly surprised: 

- __Bank buster:__ On Friday __JPMorgan Chase__ and __Citi__ reported stronger-than-expected #s, with JPM posting record revenue and a 50% profit surge on higher interest rates. 
- __Stocking stuffer:__ Despite less-than-stellar earnings expectations, the S&P 500 is up 8% for the year, while the techy Nasdaq has gained 17%. 

__Growth at all costs < profit at *less* cost…__ Soaring interest rates and sticky inflation have eaten into profits and cooled demand. Cue: companies are shifting away from growth-driven investments to focus on cost-cutting profit boosters. It’s “the year of efficiency,” __Meta__ CEO Zuck says. Corporate titans are tightening their belts to prep for a downturn. Last week the Fed said it expected that the banking-crisis fallout would tip the US into a recession this year. 

- __Cold-brew cuts:__ In addition to sweeping layoffs, companies like Meta, __Goldman Sachs__, and __Salesforce__ have cut cushy employee perks like barista-brewed coffee. __Google__ is swapping pricey MacBooks for Chromebooks. 
- __Robo-savings:__ Companies like __Disney__ and __Microsoft__ are backtracking on big bets like the metaverse. Instead, corporations are investing in things that could reduce costs long term (think: __Walmart__ and __Amazon__ leaning into warehouse automation). 


Busy week on Wall Street (Mario Tama/Getty Images)

__“How low will you go” is the question…__ on investors’ lips. They’ll be listening for guidance about how much lower corporate profits could fall. If companies signal further declines ahead, this year’s rally could reverse. But if cost-cutting measures start to show up on earnings reports as improving profits, markets could be pleasantly surprised.

Earnings-season forecasts are dim for America’s biggest companies as profits get pressured

__Biscoff cookies en route to Cabo…__ __United Airlines__ and __Alaska Air__ may have reason to join the spring-break party when they report this week. While US airline fares are up 17% on the year, travel demand is still taking off. The TSA's expecting a record-breaking year for flights, and analysts think this may be airlines' busiest spring ever. Last week __Delta__ unloaded a quarterly loss, but projected strong growth and profit ahead. It expects record advance summer bookings as consumers prioritize [delayed YOLO](https://snacks.robinhood.com/newsletters/1UaryfLlNYafGqkVnZiU00/articles/37SFbEAZ3QyWYdncUFOaA1/) experiences. 

__It’s finally here…__ Tuesday is the deadline to file tax returns for most Americans (many residents of CA, GA, and AL have until October). And it may be the last go-around for what you could call “IRS 1.0.” Over the next two years, the IRS will use billions in federal funding to upgrade its ’60s-era tech and hire 20K new employees. For you: faster returns and shorter phone wait times. Next tax year, the IRS will require anyone earning $600+ on payment apps (for goods and services — not from splitting checks) like Venmo to report it. 

Events

Coming up this week

__An apple a day…__ keeps the bills away. More Americans could see a boost in their credit scores after credit agencies scrapped 70% of all medical debt in collections. Last year, __Experian__, __TransUnion__, and __Equifax__ removed already paid medical debt from millions of credit reports. Last week they took it a step further by removing all *unpaid* debt up to $500. Nearly a tenth of US adults owe at least $250 in medical debt, but many don’t notice until it dings their credit score. The move could provide relief at a time when US households carry record debt. 

__Still watching…__ Votes will be counted today to see if the Writers Guild of America will strike in the event that a new contract agreement isn’t reached with studios by May 1. If the WGA strikes, we could see a repeat of the last screenwriting stoppage in 2007, which lasted 100 days. On the table: shortened TV seasons, cancellations, and a bump in unscripted content (imagine: more “Love Is Blind”). A strike would be a headache for streamers who are hungry for the next “Succession.” They’re expected to splurge $23.4B on scripted titles this year.

Zoom out

Stories we’re watching

- __[Stuck](https://snacks.robinhood.com/newsletters/1UaryfLlNYafGqkVnZiU00/articles/4pzAi33V9xaok1Q7KIh3Rt/):__ __Amazon__'s $1.7B deal to buy Roomba maker __iRobot__ is gathering dust as the FTC gets tougher on mergers. As antitrust gets anti-er, companies might think twice before snagging startups.
- __[Oops](https://snacks.robinhood.com/newsletters/Ku8oHOygOUFBElNxmnQHt/articles/2e3J0mmmxTJv7LWksc4Fd7/):__ __Samsung__ workers reportedly leaked secret company info while asking ChatGPT for help. Nearly half of companies (and the Biden admin) are exploring guidelines for AI-chatbot usage.
- __[Volt](https://snacks.robinhood.com/newsletters/3ITpC4k9Ogb756gLlOX7Ht/articles/3QQUl0m7n653lLXE6UcpIp/):__ __Tesla__'s building a Shanghai “Megapack” plant to build more energy-storage solutions for businesses and homes. Rising energy demand could fuel Elon’s biz as EV growth slows. 


ICYMI

Last week's highlights

In nearly half of US marriages, women earn about the same as their spouse — or more

🔮 Earnings-season forecast

__Biscoff cookies and Coca-Cola…__ a match made in cabin. __[Delta](https://robinhood.com/stocks/DAL/)__ unloaded first-quarter earnings yesterday. The Atlanta-based carrier posted a chunkier-than-expected loss, partly driven by extra costs like raises for pilots and employee bonuses. But Delta said it saw sunnier skies ahead, and [forecast](https://www.cnbc.com/2023/04/13/delta-air-lines-dal-earnings-q1-2023.html) upbeat sales growth and profit for the spring. 

- __Booked Italian summer (in March):__ Delta projected record advance summer bookings as consumers continue to prioritize travel, planning trips months in advance.

- __Champagne and free socks:__ First- and business-class sales (think: premium products) made up over half of Delta’s revenue as $4K splurges on bed-like seats beat out economy spending.

- __Charge it to corporate:__ Delta said business-travel bookings have been rebounding, with US corporate sales in March at 85% of prepandemic levels.

- __Cloudy:__ Still, Delta, __[JetBlue](https://robinhood.com/stocks/JBLU/)__, and other airlines are dialing back growth plans and routes as airport labor shortages and congestion limit capacity. 

__Only 47 days left ’til check-in…__ Consumers are upping their travel spending, despite cutting back in other areas. While inflation has been steadily cooling, travel costs are still sky-high: US airline fares rose 4% from February to March, and are up 17% on the year. Spring break 2023 is expected to be the busiest travel season *ever* for airlines, and the TSA expects demand to keep soaring throughout the year. Last quarter, Delta’s advance cash bookings were up nearly 20% from prepandemic levels, and CEO Ed Bastian said he doesn’t see a pullback on the horizon.

Springin’ for spring break (Anadolu Agency/Getty Images)

Cabo

__Delayed YOLO > YOLO…__ because everyone wants something to look forward to. Consumers are cutting back on instant-gratification buys like new iPhones and online-order clothing binges in favor of delayed-gratification experiences like summer vacays. We’ll get another window into the travel sector when __[Alaska Airlines](https://robinhood.com/stocks/ALK/)__ and __[United Airlines](https://robinhood.com/stocks/UAL/)__ report next week.

Delta enjoys higher bookings as consumers splurge on “delayed YOLO” experiences

__Stuck under the couch…__ __[Amazon](https://robinhood.com/stocks/AMZN/)__'s $1.7B acquisition of Roomba-maker __[iRobot](https://robinhood.com/stocks/IRBT/)__ has [gathered](https://www.wsj.com/articles/amazons-roomba-deal-keeps-getting-messier-73f09651) dust since it was announced last summer. Amazon’s potential fourth-largest acquisition ever is facing an investigation by the Federal Trade Commission and, as of last week, also by the UK’s antitrust regulator. Amazon’s already so dominant that regulators may be concerned about it ruling the vacuum world, too. 

- __Small vac, big punch:__ In late 2021 iRobot held a whopping 62% of the robotic-vacuum market (excluding China) — a significantly larger market share than that held by previous Amazon buys like __MGM__ and One Medical.

- __Privacy please:__ Antitrust and data-privacy experts are concerned that the acquisition might give Amazon access to Roomba customer data (picture: cameras that map homes to avoid couch run-ins).

- __Sputtering:__ iRobot shares are down 32% from Amazon’s $61/share offering.

__Dusting off powers…__ The FTC, under chair Lina Khan, has grown much tougher on big tech in recent years. In December, the agency sued to block  __[Microsoft](https://robinhood.com/stocks/MSFT/)__'s $69B takeover of __[Activision Blizzard](https://robinhood.com/stocks/ATVI/)__, and earlier this month ordered biotech company __[Illumina](https://robinhood.com/stocks/ILMN/)__ to undo its $7B buyout of cancer-test developer __Grail__. The moves may be having an effect: last year, __[Nvidia](https://robinhood.com/stocks/NVDA/)__ ditched plans to buy chip maker __Arm__ in what would’ve been the biggest semiconductor deal ever. Looking ahead, the FTC last month vowed to protect competition in the AI industry.

Justin Sullivan/Getty Images

Stuck

__Antitrust is getting even anti-er…__ and that could be bad news for tech titans. In 2017, Amazon completed its $13.7B __Whole Foods__ buyout within three months — now, it’s eight months into trying to buy iRobot. US tech mergers and acquisitions were down last year as companies faced a tougher market and the risk of FTC lawsuits. Given the agency’s new groove, cost-cutting companies might think twice about snatching up startups.

Amazon’s Roomba-quisition is looking messy as the FTC continues its antitrust press

🤖 __Techy…__ __[Ethereum](https://robinhood.com/crypto/ETH/)__, the second largest crypto, successfully [completed](https://www.bloomberg.com/news/articles/2023-04-12/ethereum-s-eth-shanghai-shapella-upgrade-looks-stable-developer-beiko-says) a major update dubbed [Shanghai](https://snacks.robinhood.com/newsletters/7g8WyDpRHlBW4XKb0ArYq9/articles/3YIdBYT3OuwOf9IqZp0aMK/). Validators who locked up ether as collateral can finally begin to withdraw (and sell) their staked coins. About that… 

🪙 __Coins…__ As of yesterday, validators had [queued](https://www.theblock.co/post/226125/ether-pending-withdrawals-billion) up $1.7B+ worth of staked ether to withdraw. The Shanghai update limits the # of coins which can be pulled out at once, so those who want to withdraw staked ETH have to get in line. 

🌶️ __Spicy…__ Crypto has a reputation problem: a Pew survey [found](https://www.pewresearch.org/fact-tank/2023/04/10/majority-of-americans-arent-confident-in-the-safety-and-reliability-of-cryptocurrency/) that while nearly 90% of US adults have heard of cryptocurrency, two-thirds aren’t confident that current ways to trade the digital assets are safe.

STAKED

For the first time, some banks lost money for each mortgage they financed last year

✈️ Delta’s delayed YOLO

__Hot off the BLS press…__ The US just got its inflation report card for March, and the [results](https://www.cnn.com/2023/04/12/economy/cpi-inflation-march/index.html) were… interesting. Consumer prices *rose* 0.1% for the month, but less than Wall Street’s expected 0.2% climb. Stocks were mixed after the #s dropped, as investors questioned whether the mellower-than-expected data could (finally) lead to a rate-hike pause. The report's timing is key: yesterday’s inflation data came after March’s banking [blowup](https://snacks.robinhood.com/newsletters/2rAIIq68rwaF2sAJxAbvQl/articles/752EZnqO0NvG23NtlboY4e/) and before the Fed’s expected early-May rate decision. 

- __Sunny side up:__ Grocery prices fell 0.2% in March, marking the first decline since 2020. Egg prices also started to crack, plunging more than 10% from February highs.

- __Upside down:__ Rising shelter prices (like: rent, hotel costs) were the main driver of rising consumer prices, even as rent growth cooled. 

__The great rate-hike divide…__ Fed Chair Powell has been loud about staying the course of raising rates to crush inflation. Despite that, earlier this month banking worries and underwhelming labor data had traders betting on only a 43% chance that the Fed would hike interest rates in May. After yesterday's mixed report (think: still high inflation that's showing signs of easing), those odds stood at nearly 70%. Muddying things, earlier this week two Fed presidents expressed contrasting views over whether more hikes would be needed to curb inflation.

When omelets are back on the menu (Brandon Bell/Getty Images)

Torn

__Staying the course can lead to a fork in the road…__ Fed officials' divided statements, plus mixed economic predictions, have led to softer rate rhetoric. Yesterday, __[Goldman Sachs](https://robinhood.com/stocks/GS/)__ said it no longer expected the Fed to raise rates in June. Traders also bolstered their belief that the Fed would reverse course by summer’s end, with rates ending the year nearly half a percentage point lower.

Inflation came in cooler than expected in March, leaving Fed officials and Wall Street divided over the path for rate hikes

__It’s not about the journey…__ it’s about how much it costs to get to the destination. The early pandemic race that saw delivery speeds approaching Mach levels (at discount prices) is [slowing](https://www.wsj.com/articles/online-shoppings-fast-delivery-race-is-slowing-down-73d4c68c). Now big online retailers are raising shipping costs and shifting what “free shipping” means: 

- __New terms:__ At the end of February, __[Amazon](https://robinhood.com/stocks/AMZN/)__ bumped the minimum purchase total for its free grocery-delivery service to $150 (up from $35).

- __More-to-door:__ __[FedEx](https://robinhood.com/stocks/FDX/)__ and __[UPS](https://robinhood.com/stocks/UPS/)__ said they're raising their rates by an average of 7%.

- __For a price:__ __[Nike](https://robinhood.com/stocks/NKE/)__ and __[Best Buy](https://robinhood.com/stocks/BBY/)__ offer free shipping as a membership-program perk (the cost: shared personal data).

__Timing isn’t everything…__ Determined to keep order totals low, consumers are increasingly opting for longer (that is: cheaper) wait times over costlier fast delivery. The number of packages delivered through Amazon’s shipping option that credits customers up to $1.50 for choosing slower delivery has doubled since 2020, the company said. Meanwhile, a recent survey of online shoppers found that 41% rank shipping cost as their top priority when placing an order (up from 33%), while 22% rank delivery speed as the most important factor (down from 29%). It seems shoppers aren't in a rush: another survey found that 85% of what’s ordered online isn’t opened for days.

Speed

__Fast isn’t worth the cost of free…__ With higher retail and grocery costs eating into shoppers’ budgets, many are opting to practice patience when it comes to their online buys. For retailers who’ve used fast, free shipping to gain an edge, stemming losses from higher shipping costs without alienating customers is a careful dance.

Ecommerce’s delivery sprint is slowing to a jog as consumer habits shift

March’s mixed inflation #s have Fed officials and Wall Street split on future rate hikes

40% of surveyed American adults are considering buying an EV for their next vehicle

🏦  The great rate-hike divide

__No “undo” button here…__ While submitting prompts to ChatGPT, __Samsung__ employees [leaked](https://www.engadget.com/three-samsung-employees-reportedly-leaked-sensitive-data-to-chatgpt-190221114.html) secret company info to the AI chatbot, a report from The Economist Korea said. After Samsung’s chip-making division gave engineers the green light to use __OpenAI’s__ chatty bot, employees apparently shared sensitive source code and meeting recordings to streamline their work. Now Samsung is reported to be restricting employee use of CGPT and trying to build its *own* bot. 

- __Feeding the gremlin:__ The more prompts you feed CGPT, the more its AI brain grows. CGPT’s data policy allows OpenAI to leverage users’ prompts to train its bots (unless they opt out). 

__CGPT spills the tea…__ OpenAI urges users *not* to share private info with CGPT because it could use parts of your prompt input in its responses to others. But recent surveys suggest that CGPT is already broadly used by corporate workers. Meanwhile, OpenAI-backer __[Microsoft](https://robinhood.com/stocks/MSFT/)__ is incorporating CPGT into its productivity software like Word and Excel. Samsung isn’t the only corporate giant sweating over employee chats with ChatGPT.

- __Corporate titans__ like __[JPMorgan](https://robinhood.com/stocks/JPM/)__, __[Verizon](https://robinhood.com/stocks/VZ/)__, and __[Goldman Sachs](https://robinhood.com/stocks/GS/)__ have blocked employee access to CGPT, while others like __[Amazon](https://robinhood.com/stocks/AMZN/)__ and __[Walmart](https://robinhood.com/stocks/WMT/)__ have reportedly issued warnings not to share sensitive info with the tool.

- __Italy has banned__ CPGT, at least for now, saying it collected personal data — and other EU countries are also considering restricting it over data-privacy concerns.

What goes in doesn’t come out (Frank Rumpenhorst/Getty Images)

Oops

__New tools need new rules…__ Nearly [half](https://www.bloomberg.com/news/articles/2023-03-20/using-chatgpt-at-work-nearly-half-of-firms-are-drafting-policies-on-its-use) of companies are scrambling to draft guidelines for CGPT, since the haziness around employee use poses a security threat. Meanwhile, the Biden admin is exploring whether rules need to be imposed on AI bots, including whether a certification process should be required before release.

Samsung and other companies stress over employee use of ChatGPT as data worries emerge

__Put a lid on it…__ __[Tupperware](https://robinhood.com/stocks/TUP/)__'s leaking profits. The 77-year-old food-storage icon [said](https://www.nbcnews.com/business/business-news/tupperware-could-go-out-of-business-company-warns-rcna79115) that it may have to shut down, and that it’s hired advisers in a bid to seal its survival as sales slump. Since the news hit last week, its stock has plunged nearly 50%. Tupperware enjoyed a pandemic boom as locked-down shoppers breathed new life into leftovers, but it didn't last. 

- __The Tupperware party’s over…__ Last year sales dropped 18%, and the biz ended the year with $700M+ in debt.

- __Trays not chic:__ Tupperware rose to fame with 1950s "Tupperware parties," but has struggled to catch on with younger generations (despite a distribution deal last year with Target).

__Going green to get that green…__ Tupperware lost out as younger shoppers passed on plastic resealable tubs in favor of more sustainable glass or metal options. FYI: 84% of surveyed US shoppers said they're concerned about plastic waste, and more than 60% said they'd pay more for sustainably packaged products. Last year, Tupperware's CEO said the plastic powerhouse would expand its offerings to include more glass and stainless steel. Tupperware's pitch as the OG reusable product wasn't enough to shift consumer shopping sentiment.

SEALED

__Genericized products have generic competition…__ Tupperware's a name brand, but lots of shoppers equate its products with any resealable food container. It's a common problem for brands that've become so ubiquitous they define an entire category (like: Kleenex, Q-tips, and Ziploc). While consumers might splurge extra on brand-name Coke or Nikes rather than knockoffs, items like food containers and cotton swabs are seen by many as interchangeable. And if generic options are cheaper or more sustainable, they have a leg up.

Tupperware says it’s on the brink of going stale as its name-brand power wanes

From 1996 to 2007, Emily was the most popular baby name in the US

💼 ChatGPT clocks in

__Looks like a shipping container…__ actually a *huge* battery. Elon Musk said on Sunday that __[Tesla](https://robinhood.com/stocks/TSLA/)__ would begin [building](https://www.nytimes.com/2023/04/09/business/elon-musk-tesla-shanghai-battery-factory.html) its Shanghai Megapack factory — and it has nothing to do with EVs. Tesla’s four-year-old Megapack biz is all about energy-storage solutions for businesses and homes. Picture: specially designed lithium batteries that store renewable energy from wind and the sun. While EVs are still Tesla's #1 moneymaker, there’s growing demand for energy-storage solutions as lithium prices plunge. The Shanghai Megapack plant is expected to be finished by early next year, and it could produce 10K Megapacks/year. Tesla said one Megapack battery can power 3.6K homes for an hour.

__Supercharged China ties…__ Musk’s latest Shanghai investment comes as tensions boil between the US and China. The Biden admin has been urging automakers to move their manufacturing out of China and into the US, offering incentives like EV tax credits and billions in clean energy and battery investments. But it would be hard for Tesla to shift gears out of the world’s biggest EV market: last year, Tesla's Shanghai factory produced 700K+ cars (over half its global output). 


From Powerwalls to Megapacks (Andrew Francis Wallace/Getty Images)

Volt


__Side hustles can turn into main gigs…__ By charging up in non-EV biz, Tesla can position itself as an all-around energy company. With EV competition heating up, Tesla’s been slashing car prices as its electric market share shrinks. Now it hopes Megapack could be the next big growth driver (some analysts think the biz could earn $10B+ in annual revenue). With energy-storage products like Megapack and Powerwall, Tesla aims to turn itself into a green-energy go-to. 

Tesla’s new Shanghai Megapack plant could fuel its energy-storage biz as EV growth slows

__The instant block…__ makes its corporate debut. After newsletter service __Substack__ announced a __Twitter__-like feature called Notes last week, the Musk-led Twitter began [retaliating](https://www.nytimes.com/2023/04/07/technology/twitter-substack-elon-musk.html). It blocked creators’ ability to embed tweets in Substack posts, banned likes and retweets on tweets with Substack links, and removed the ability to search “Substack” on Twitter. Over the weekend, Substack [said](https://twitter.com/SubstackInc/status/1644897660615249920) that the “suppression of Substack publications” appeared to be over. But for a while the changes left lots of independent Substack creators without access to a critical distribution platform.

__Unlike and unsubscribe…__ As the tech industry focuses on cutting costs, the fledgling creator economy is experiencing turbulence. In 2021, creator-focused companies like __Patreon__, __Cameo__, and __Discord__ were thriving as we binged from our couches. But by the end of last year, funding for US creator startups was down 79%. It’s not just businesses feeling the end of the [boom time](https://snacks.robinhood.com/newsletters/4ivhnY1RscwdC1MNfKSQqi/articles/2eYLLi6X6hdLeIHiK28bOa/) — creators are taking a hit too.

- __[Amazon](https://robinhood.com/stocks/AMZN/)’s__ Twitch last week announced it would experiment with taking a cut from streamers’ brand sponsorships. In the fall, the company began taking a bigger chunk of creators’ subscription revenue. 
- __[Snap](https://robinhood.com/stocks/SNAP/)__ cut payouts for its TikTok-esque Spotlight feature several times last year, and __[Meta](https://robinhood.com/stocks/META/)__ last month paused a monetization feature that paid creators for posting Reels. Meanwhile, __TikTok’s__ new creator fund isn’t clear on its revenue-sharing terms.
- __Meta’s__ layoffs gutted an already overwhelmed customer-service team, leaving creators without contacts when they face issues like impersonators.


Bump

__Alienating creators risks alienating audiences…__ because users come to platforms for the content. Notable Substack creators — including vocal Musk supporters — left Twitter after the Substack blockade began. In the creator-economy turmoil, brands that reward talent could get a leg up. In February, __[YouTube](https://robinhood.com/stocks/GOOGL/)__ began sharing ad revenue with Shorts creators — a move that could see influencers ditching Reels and Spotlight for more lucrative short videos.

Twitter’s (temporary) Substack blockade is the latest snafu for the beleaguered creator economy

🤝 When you outsource the technical part of the job to a contractor…

Tomorrow's scheduled [Shanghai](https://snacks.robinhood.com/newsletters/7g8WyDpRHlBW4XKb0ArYq9/articles/3YIdBYT3OuwOf9IqZp0aMK/) update to the __ethereum__ blockchain — if [successful](https://fortune.com/crypto/2023/04/08/ethereum-shanghai-upgrade-ether-crypto-markets/) — will finally let people sell the ether that they locked up on the blockchain to validate transactions (aka [staking](https://snacks.robinhood.com/newsletters/3Zy7nWCeAzQOjEeKFD5zwW/articles/7A7vAvybFvXFNBUcPqFsGU/)). Lido is a protocol that stakes coins on behalf of users (for a cut of the proceeds) *and* issues __stETH__, a tradable token that represents one ether staked with Lido. Lido holds about a third of the $31B worth of staked ether.

DEFI(NE)

Heard on the Block: “Lido”

Tesla’s Shanghai Megapack plant could fuel its energy-storage biz as EV growth slows

“The Super Mario Bros. Movie” had the highest-earning opening weekend so far this year

🔋 Tesla’s “Megapack” bet

__Bachelor’s in physics…__ workin’ in software sales. As the market for entry-level jobs [grows](https://www.wsj.com/articles/jobs-new-college-graduates-2023-labor-market-openings-7195e28) more cutthroat, 40% of 2023 college grads are applying to industries or roles they hadn’t considered before. The unemployment rate for grads aged 20 to 24 has doubled since 2021, hitting 4.6% in February. It’s a reversal from 2018, when grads were more likely to get hired than seasoned workers. This semester, we’ve got a college-hiring conundrum:

- __While unemployment is historically low__, and there are more job openings than available workers, a lot of employers are pulling back on early offers to college seniors.

__Sending LinkedIn requests since 2020…__ The entry-level talent pool has filled up after lots of recent grads were laid off or took time off during the pandemic (think: #vanlife adventure). This year, employers plan to hire 14% more grads than last year, one [survey](https://www.naceweb.org/job-market/trends-and-predictions/employers-project-14-point-7-percent-increase-in-hiring-for-class-of-2023-college-graduates/#:~:text=Employers%20Project%2014.7%25%20Increase%20in%20Hiring%20for%20Class%20of%202023%20College%20Graduates,-October%2024%2C%202022&text=Employers%20plan%20to%20hire%2014.7,NACE's%20Job%20Outlook%202023%20report.) suggested. But snagging top roles is becoming more competitive, and employers are engaging in fewer bidding wars for younger talent. Now grads are casting wider nets and working overtime to polish their applications. Meanwhile, popular employers are curbing entry-level hiring as mass layoffs roll on.

- __Tech check:__ __Amazon__ postponed start dates for some ’23 grads for up to six months, and __Meta__ recently began hiring freezes after sweeping layoffs. 
- __Sofa days:__ Furniture retailer __Wayfair__ has cut 10% of its workforce and is limiting hiring for full-time roles and internships. 
- __Consulting crunch:__ Last month __McKinsey__ said it would let go of 2K workers in one of the consulting firm’s biggest cuts ever. 

Refreshing LinkedIn for the hundredth time (David Crane/Getty Images)

Applied

__Slow starts could signal a soft landing…__ Fewer job opportunities for college grads could be another sign that the hot labor market is (finally) starting to cool. In February, US job openings dropped to their lowest level since ’21. With companies dialing back from super-growth mode, the domino effect of past grads entering the workforce late could make it tough for *new* grads to snag high-demand positions. They’re not losing hope: 76% of this year’s grads believe they can find a well-paying gig.

College grads face a choppy job market as tough competition and hiring curbs limit roles

__Bankin' on it…__ __JPMorgan Chase__, __Citi__, and __Wells Fargo__ are on deck to report Friday as the US banking system undergoes a tectonic shift. “Too big to fail” banks saw an influx of deposits after the failures of regional banks like __Silvergate__, __SVB__, and __Signature Bank__. Meanwhile, customers have moved $300B+ into money market funds over the past few weeks — which could cut into big banking profits. In Q4 of last year, most major banks beat expectations. For the latest quarter, analysts expect higher revenues and profits. 

__Waiting for a #Powse…__ Powell pause. On Wednesday, the US gets its inflation report card for March. Investors always have eyes on the Consumer Price Index, but this one could be extra spicy: it’s the first since the banking turmoil, and the last before the Fed’s next rate-hike decision meeting on May 2. After banking worries and underwhelming labor data, traders were betting on a 60% chance that the central bank *won’t* hike interest rates. Some even expect that it’ll start *cutting* this year. But if inflation comes in hot, such hopes could be dashed. 

__Pump anxiety returns…__ Higher gas prices aren’t in the rear view. Last week, OPEC+ (the world’s largest coalition of oil-producing countries) announced a surprise production cut. Oil prices surged on word that the cartel plans to slash output for the rest of the year. It could mean higher prices at the pump and even a broader inflationary spike, because the economy runs on oil. It’s a boon for oil titans like __Exxon__ and __Shell__, which have already enjoyed years of record profits on the back of rising prices. The cuts could also boost demand for US oil. 

__CiaoGPT…__ Italy temporarily [banned](https://www.nytimes.com/2023/03/31/technology/chatgpt-italy-ban.html) __OpenAI's__ ChatGPT, saying the chatbot collected personal data and could put minors at risk. It was the first Western country to boot OpenAI's tech, but as privacy concerns mount it might not be the last. Germany's considering a block, and the UK issued a warning on AI use. Now more EU countries (like Ireland and France) are in touch with Italian regulators as they consider dropping a $22M fine on OpenAI. Italy gave the company an April deadline to prove it didn't break data rules. 

Zoom Out

- __[Droid](https://snacks.robinhood.com/newsletters/6pBiGKeLBn6LbaoUyMn5vL/articles/N3foBnA3JZMvEFNW0aTqh/):__ __Walmart__ said 65% of its stores will be automation-powered by 2026 (think: robo forklifts). Companies are investing in “efficiency” while cutting back on big bets like the metaverse and expenses like… staplers. 
- __[Exfoliate](https://snacks.robinhood.com/newsletters/76atOGd2Tik4m7ipZFuyy5/articles/6uT4NKdjmCoHTT1noJISiN/):__ __L’Oréal__ is lathering up $2.5B for fancy skincare brand Aesop (picture: $50 hand soap) in its largest acquisition. As Gen Z splurges on luxury beauty, niche brands are getting scooped by mainstream powerhouses.
- __[WWFC](https://snacks.robinhood.com/newsletters/mXK4xbJKOrYkTsz9xqJZi/articles/6hYEyMg8nrDcSmhliOKm76/):__ Live-entertainment stars __WWE__ and __UFC__ plan to merge, tag-team style, to form a $21B public company under __Endeavor__. The brands have shared talent and viewers for years, *brother*. 