__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.

DEFI(NE)

Heard on the Block: "crypto yield"

Dow Jones

S&P 500

Nasdaq

Bitcoin

“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.

Events

Coming up this week

__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. 

Zoom Out

Stories we’re watching

- __[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

Last week's highlights

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

🍿 Netflix’s sub-prise

__The AI suits are coming…__ [Generative AI](https://snacks.robinhood.com/newsletters/3WEG5SgBgeQScK91kmZwOc/articles/6gWjpZswZYcdRi0vcvZQos/) has blown up in the past year, with tools like ChatGPT and Stable Diffusion garnering mainstream headlines. Image generators including __OpenAI’s__ DALL-E and __Stability AI’s__ Stable Diffusion “create” images from text prompts (think: “a neon banana in the style of Vincent van Gogh”). But those AI-art tools are trained on billions of images scraped from the internet, many of which are copyrighted by the artists who created them. 

- __Artists sue:__ This week a group of artists [filed](https://www.polygon.com/23558946/ai-art-lawsuit-stability-stable-diffusion-deviantart-midjourney) a class-action suit against AI-art generators __Stability AI__, __Midjourney__, and __DeviantArt__, arguing that the companies “violated the rights of millions of artists” and profited by using copyrighted images to train their AI models. A similar suit was recently filed against __[Microsoft](https://robinhood.com/stocks/MSFT/)__, __GitHub__, and __OpenAI__.
- __Companies too:__ Also this week, __[Getty Images](https://robinhood.com/stocks/GETY/)__ [sued](https://www.engadget.com/getty-images-sues-the-maker-of-ai-art-generator-stable-diffusion-over-data-scraping-allegations-184502897.html) __Stability AI__, alleging it “unlawfully copied and processed millions of images protected by copyright” without a Getty license. A study conducted last year concluded that a sizable chunk of Stable Diffusion's data was likely pulled from Getty’s site (partly evidenced by the tool's habit of including the Getty watermark).

__It’s a legal gray area…__ So far there aren’t clear rules around the use of genAI because it’s such a new thing. But it’s growing at lightning speed and is top of mind for companies and artists. In September, Getty Images banned the inclusion of AI-generated images in its database over copyright concerns. But __[Adobe](https://robinhood.com/stocks/ADBE/)__ announced that it *would* sell images generated by AI tools like DALL-E and Stable Diffusion (so did __[Shutterstock](https://robinhood.com/stocks/SSTK/)__). 

Michelangelo would never (GraphicaArtis/Getty Images)

GenAI

__It’s a cart-before-horse scenario…__ Determining whether AI-art tools violate copyright law could be thorny, but the outcomes of lawsuits will likely set precedents for how to handle such cases. Artists have already started sharing tools for determining whether their work was scraped by AI. Meanwhile, corporations are putting the AI cart before the horse: this week __Microsoft__ [announced](https://www.wsj.com/articles/microsoft-plans-to-build-openai-capabilities-into-all-products-11673947774) plans to integrate OpenAI’s generative AI tech into all its products.

AI-art lawsuits could set copyright precedents for titans like Microsoft and Stability AI

__Alexa, play “When the Party’s Over”...__ Halloween icon __[Party City](https://robinhood.com/stocks/PRTY/)__ has [filed](https://www.reuters.com/business/retail-consumer/party-city-files-chapter-11-bankruptcy-protection-2023-01-18/) for bankruptcy. As America’s largest party retailer with 850 stores, PC is a go-to for themed birthdays and last-minute costumes. But the festive chain has racked up $1.7B+ in debt, as everything from higher costs to helium shortages hit its bottom line. It’s lost money for the past three fiscal years, and said it was on track to lose nearly $200M this year. Now:

- __Exchanged:__ Party City shares have dropped 90%+ over the past year, and last month it said it was at risk of delisting from the New York Stock Exchange because its stock was too low.
- __Spirited away:__ PC’s struggled to compete with its meme-able rival __Spirit Halloween__, which uses vacant storefronts to launch its seasonal pop-up shops.

__Spooky szn…__ Party City is only the latest retail casualty, as historically high inflation and rising interest rates scare off consumers. This month, debt-laden __[Bed Bath & Beyond](https://robinhood.com/stocks/BBBY/)__ [said](https://snacks.robinhood.com/newsletters/7aN8BRAzCXDnsbfVDy7Wtq/articles/6YKevppGSztYU76NseEC9p/) it could also file for Chapter 11 as losses pile up. Meanwhile, US retail sales continued to fall last month, posting their biggest monthly drop since 2021 as shoppers cut back on holiday splurges. 

__Being a retailer is hard…__ but being a *seasonal* retailer is even harder. Online shopping is already crushing brick-and-mortar stores. Seasonal businesses that rely on a few holidays for most of their sales have it even tougher. As Americans spend more on essentials like groceries and rent, there’s less cash for balloons and Wednesday Addams wigs. Retailers without regular cash flow could find it even harder to keep the lights on.

Party City files for bankruptcy as celebratory spend cools, highlighting the chilly side of seasonal retail

❤️ When you like your own social post from many accounts…

Blockchains are designed to let people see what transactions are taking place on a chain. But because crypto's pseudonymous (think: no real names required) one person can be on *both* sides of a trade. "Wash trading" — or repeatedly buying and selling the same crypto or NFT to yourself — can make it seem as if there's organic trading volume when none may exist. Some [investors say](https://www.cnbc.com/2023/01/12/mark-cuban-next-crypto-implosion-may-be-uncovering-wash-trading.html) wash trading on centralized exchanges could be crypto's next big scandal.

Heard on the Block: "wash trading"

AI-art lawsuits could set copyright precedents for titans like Microsoft and OpenAI

So far this year, an average of 1.6K tech workers have been laid off every day

🖼️ AI art gets sued

__Lawsuit secured…__ Elon Musk is [heading](https://www.cnn.com/2023/01/17/investing/elon-musk-federal-lawsuit/index.html) to court over his “funding secured” tweet. Refresher: in 2018 Musk tweeted that he’d secured funding to take __[Tesla](https://robinhood.com/stocks/TSLA/)__ private at $420/share. Turns out the funding wasn’t so secure. Another issue: Elon didn’t follow required SEC disclosure procedures. Regulators said Musk’s surprise tweet misled investors and caused Tesla stock to spike. Also in 2018, Elon and Tesla agreed to pay $20M each in fines to settle with the SEC (and Elon agreed to step down as chairman). But the chapter wasn’t closed there…

- __Elon’s trial kicked off__ yesterday in San Francisco. The subject: a class-action lawsuit brought by former Tesla investors who said the $420 tweet lost them billions.
- __Elon says__ he *did* talk to Saudi sovereign wealth fund execs about securing funding for a $72B Tesla buyout — but the cash turned out to be far from secure. 
- __Experts say__ it could be a hard case for Musk to win, with one judge saying no reasonable jury would find the tweet “accurate or not misleading.”

__Stirring the pot…__ Elon’s tension with securities regulators and investors has been building for years, from calling regulators “bastards” over the $420 fraud charges to his slew of tweets about dogecoin in 2021. Now the billionaire could pay *billions* if jurors rule in shareholders’ favor when his trial ends next month.

Tweet regret? (Patrick Pleul/Getty Images)

Served

__Private takes can bring public problems…__ Elon is boss of three companies (Tesla, Twitter, SpaceX) but Tesla’s the only one that’s public. That status comes with lots of responsibilities and expectations, both from regulators and from investors. Elon’s used to ruffling feathers and getting away (mostly) unscathed. But this trial could hit Tesla’s rep. 

Elon Musk heads to trial over his infamous $420 tweet as regulatory tension brews

__Chanel? In this economy?...__ Apparently, if you’re under 40. Millennials and Gen Z’ers were responsible for *all* the luxury market’s growth last year, [according](https://www.cnbc.com/2023/01/17/gen-z-is-driving-luxury-sales-as-wealthy-shoppers-get-younger.html) to a Bain & Co. report. The luxe consumer is getting younger: Gen Z shoppers are starting to buy designer goods at 15 (3 years earlier than millennials). Think: Dior foundation, Cartier watches, and Moncler puffer jackets. The trend’s benefiting the industry’s biggest companies.

__I could wear my Louis Vuitton…__ raincoat. The economic weather isn’t favorable, with soaring interest rates, slowing growth, and sticky inflation. Still, luxury sales have largely stayed shielded from the economic storm. Designer retailers like Louis Vuitton owner __[LVMH](https://robinhood.com/stocks/LVMUY/)__ and Gucci owner __[Kering](https://robinhood.com/stocks/PPRUY/)__ thrived last year as the strong US dollar put European goods “[on sale](https://snacks.robinhood.com/newsletters/4Jy0RmQnV60oK4MUgx5hqa/articles/7driDwhdTnucdUECh5IdPQ/)” for Americans, while a surge in wealth creation has boosted spending. 

- __Vuitton index:__ __LVMH__ shares [surged](https://www.reuters.com/business/retail-consumer/luxury-giant-lvmh-tops-400-billion-euro-market-value-2023-01-17/) to a record high yesterday, solidifying its lead as Europe’s most valuable company (its owner, Bernard Arnault, is also the world’s richest person). LVMH owns 70+ luxe brands, including Dior, Bulgari, and Dom Pérignon.
- __Sticker shock:__ Thanks to strong demand, luxury labels can get away with big price hikes. Chanel’s classic flap bag now costs 60% more than it did prepandemic. Meanwhile, __[Rolls-Royce](https://robinhood.com/stocks/BMWYY/)__ sold a record # of cars last year — at an average price of $534K.

LouisV

__Luxury labels are social staples…__ Social media is driving a luxury spending craze among younger consumers who see designer staples as social-status symbols. Teens are ordering those Jacquemus mini bags they see in fashion posts and that Armani foundation that went viral on TikTok. It’s partly why younger generations are expected to account for 80% of global luxury purchases by 2030.

Younger consumers dominate luxury spending as social media fuels designer FOMO

China’s population shrank last year for the first time since the 1960s

🏛️ Elon’s $420 trials

__The dreaded checkout page…__ Say you find a new online shop for neon sneakers. You might abandon the cool kicks in your cart if you’re too lazy to fill in your credit-card info (or if you don’t trust the retailer with delivery). Enter __[Amazon](https://robinhood.com/stocks/AMZN/)__: it’ll widely [roll out](https://www.reuters.com/technology/amazon-widely-launch-buy-with-prime-says-offering-improved-merchant-sales-2023-01-10/) its “Buy with Prime” feature to third-party merchants this month. 

- __Merchants__ that don’t sell on Amazon (think: your fave swimsuit site) can leverage the ecomm giant’s payment, fulfillment, and delivery services. 
- __Less #friction:__ Amazon said BWP increased shopper conversion rate by an average of 25%, meaning fewer people abandoned their carts when buying with Prime was an option. 
- __Prime members__ get the benefits of Amazon’s speedy payment and free next-day delivery on *non*-Amazon sites. FYI: Last year, Prime went up from $119 to $139/year. 
- __Amazon__ gets more $$ (it charges merchants to use BWP). It said payment processing, fulfillment, and storage fees can vary by inventory. 

__No longer in its prime…__ The new revenue from Buy with Prime is a welcome addition as Amazon deals with slowing sales growth in its core retail and cloud businesses. The pandemic boom has died down, and it recently made its largest round of layoffs. The company’s also faced growing regulatory backlash over how it uses customer data to compete with third-party sellers (think: making a cheaper Amazon Basics version of a popular product). Psst: Amazon will still collect data from those who use Buy with Prime. 

Prime from all? (Dan Kitwood/Getty Images)

__This could be Amazon’s octopus moment…__ BWP could make Amazon even more ubiquitous than it already is, allowing it to widely spread its retail tentacles beyond its platform. It’s also a major threat to ecomm payment titans like __[Shopify](https://robinhood.com/stocks/SHOP/)__ and __[PayPal](https://robinhood.com/stocks/PYPL/)__. Shopify has [reportedly](https://www.cnbc.com/2022/09/01/shopify-warns-sellers-against-using-amazons-buy-with-prime-service.html) told merchants that are trying to install the BWP button that it violates its terms of service. Amazon has the household edge: a recent survey [found](https://chainstoreage.com/most-trusted-brand-america) it to be the most trusted retailer in America.

Amazon’s “Buy with Prime” button on non-Amazon sites could be an actual game changer

__Like a coming-of-age flick...__ __[Netflix](https://robinhood.com/stocks/NFLX/)__ is going through changes. Last year, the streamer lost 1.2M subscribers over two quarters and saw its stock drop by half. Now it’s trying to drum up fresh revenue and subs with its cheaper [ad-supported](https://snacks.robinhood.com/newsletters/6PVC1g1zTkOIWMAOCz5HPI/articles/5vY9oa4kPmmqecFo3pry1C/) tier, which launched in November. Investors hope a turnaround is coming: the stock is up ~90% over the past six months as Netflix bolsters its ad biz and cracks down on password mooching. Efforts might be paying off: analysts expect the streamer to announce strong subscriber growth when it reports on Thursday.

__Aisle all-stars…__ The company behind household staples like Tide, Charmin, Crest, and Head & Shoulders shampoo was in the money last year, with price hikes helping __[Procter & Gamble](https://robinhood.com/stocks/PG/)__ beat sales and profit expectations. But now higher transportation and materials costs may be taking their toll on P&G's bottom line. What's more, execs expect lofty costs will continue into this year. The Ohio-based company is expected to reveal declines in sales and profits this week. 

__Non-compete clauses…__ could become non-existent. The Federal Trade Commission proposed a rule that would end legal agreements that keep workers from switching to rival companies after leaving their jobs. From C-suite execs to security guards, nearly 30M US workers are under non-compete agreements, and breaches can lead to pricey fines and lawsuits. Meanwhile, workers who do comply can miss out on higher pay and better working conditions. A ban could boost US wages by nearly $300B/year and help close the racial and gender pay gaps.

__Adding insult to injury…__ there’s more trouble for crypto lenders. Last week the SEC [charged](https://fortune.com/crypto/2023/01/12/gary-gensler-sec-winklevoss-silbert-gemini-genesis/) __Gemini__ and __Genesis__ with selling unregistered securities through their lending program. The crypto cos had offered returns (aka yield) as high as 8% via Gemini Earn — then it went south. Before it went bankrupt, __BlockFi__ paid $100M after the SEC said its interest-bearing accounts were unregistered securities. Going forward, crypto lenders may be forced to register their products as securities or face the costly consequences.

- __[GPT](https://snacks.robinhood.com/newsletters/64ZuFLHX6YfnQ8QQYZICfn/articles/5EDobF4dEXa3d5APRhq1hn/):__ __[Microsoft’s](https://robinhood.com/stocks/MSFT/)__ reportedly in talks to invest $10B into __OpenAI__, the company behind viral genAI tools like ChatGPT and DALL-E. It could incorporate the AI tech into its search engine, Bing, or its Office software. 

- __[Augment](https://snacks.robinhood.com/newsletters/2RAMcvZH7Vv5M7DNfIJWJJ/articles/fxsDMWL8rpHSrnrXfySNc/):__ __Apple__ could (finally) launch its mixed-reality headset this year, which would position it against rivals like __[Meta’s](https://robinhood.com/stocks/META/)__ Quest VR. But the reality of success for pricey face gadgets looks iffy.

- __[CEO](https://snacks.robinhood.com/newsletters/349vN9seEikUONVdVtRvP0/articles/uMbh670ekDujd6duoyTol/):__ As the US’s fastest-growing group of entrepreneurs, Black women are increasingly leaving corporate roles to launch their own companies — but funding challenges are hampering growth.

Martin Luther King is the only American, other than George Washington, with a national holiday observed in his honor

🐙 Amazon’s octopus moment

__Quitting the 9-to-5…__ to be your own boss. Black Americans are more likely to start businesses than any other group, and women of color start businesses at [4.5X](https://www.forbes.com/sites/elizabethmacbride/2021/05/23/white-men-are-now-the-minority-of-business-owners-in-the-united-states/?sh=526047ae1582) the rate of the overall population (as of 2021, white men comprised the *minority* of business owners). As the US’s fastest-growing group of entrepreneurs, Black women are increasingly [leaving](https://www.businessinsider.com/black-women-leaving-corporate-america-entreprenurship-startups-2022-12) corporate roles to launch their own companies. A few factors boosting this trend:

- __Discrimination:__ Many are worn down by the effects of implicit or explicit bias in corporate America. [Nearly half](https://www.forbes.com/sites/ashleystahl/2023/01/04/dei-policy-are-companies-just-trying-to-check-a-box/?sh=2241c7ae750a) of job seekers say they feel discriminated against during the hiring process, and 55% continue to experience discrimination after getting the job.

- __Job losses:__ Black women were the most affected by pandemic-related job losses. In 2020, the labor-force participation rate of Black women dropped sharply and is expected to keep falling, though it’s still higher than the rate for white women.

- __FYI:__ Diverse companies tend to outperform more homogenous orgs, both in profits and in innovation. For companies, losing Black female employees is a worrying trend. 

__Mind the gap…__ While the rate of Black entrepreneurship is high, bias and funding gaps pose roadblocks to growth. As of January 2022, just [4%](https://www.mckinsey.com/featured-insights/coronavirus-leading-through-the-crisis/charting-the-path-to-the-next-normal/growth-is-elusive-for-many-black-owned-brands) of Black businesses were still open after 3.5 years, compared to the national average of 55%. Fewer than half of Black businesses were considered healthy before the pandemic, versus 73% for white-owned businesses. Lack of capital is a major factor hampering growth for Black businesses.

Breaking out of the 9-to-5 (MoMo Productions/Getty Images)

Venture

__Closing the gap is key to unlocking growth…__ Loans and venture capital are critical to business growth, but Black startups (especially those run by women) tend to have less access to funding. Black individuals and communities have traditionally been the most likely to be denied access to capital. That’s partly why the racial wealth gap is still so wide: the typical white family has [8X times](https://www.federalreserve.gov/econres/notes/feds-notes/disparities-in-wealth-by-race-and-ethnicity-in-the-2019-survey-of-consumer-finances-20200928.htm) the wealth of the typical Black family.

Black women are America’s fastest-growing group of entrepreneurs, but funding challenges are hampering growth

__Coming in hot…__ during crypto winter. Last year saw a record $20B+ in illicit crypto transactions, [according](https://www.bloomberg.com/news/articles/2023-01-12/criminal-activity-thrived-in-otherwise-tough-year-for-crypto) to a Chainalysis report. Those came in the form of dark-net market sales, ransomware payments, scams, and hacks. Cross-chain [bridges](https://snacks.robinhood.com/newsletters/f8suYXqPD4YTOYUaoKShp/articles/75PhXHd2sIDVNK6TcV8jy4/) alone saw hundreds of millions stolen in hacks (most notably __Ronin__ and __Wormhole__). Note: that $20B+ doesn't include any crypto lost to failed exchanges like __FTX__ or bankrupt crypto lenders such as __Celsius__. 

__Getting bigger…__ while staying small. The total dollar value of illicit crypto transactions has been trending up for years. In 2017 it was $5B. In 2019 it hit $12B. And in 2021 it broke $18B. But that rapid climb doesn't tell the entire crypto-crime story. That's because criminal transactions have remained a relatively small percentage of the ~$1T crypto market: 

- __Not so big time:__ Last year's $20B crime record was just 0.24% of all crypto activity that year, and 2% of crypto's total market cap.

- __For some time:__ Illicit transactions have remained under 2% of total crypto-transaction volumes since 2017.

Coined

__Crypto winter didn't freeze crypto crime…__ but there wasn't a huge growth spurt either. Last year's market downturn saw $2T in investor value wiped out, which led to [trouble](https://snacks.robinhood.com/newsletters/5yKJ21nHWy8FlNAUn6e6yJ/articles/10KCJCjTVi37CddnkJSB65/) at behemoths like __DCG__ and __Gemini__. In this contracting environment, it's surprising that crime rose at all. But zooming out, that record high looks like crypto business as usual.

Crypto crime had a banner year as the industry stumbled, but it’s still a small slice of the pie

📸 __Flashy…__ The SEC [charged](https://www.nytimes.com/2023/01/12/technology/sec-crypto-gemini-genesis.html) lender __Genesis__ and exchange __Gemini__ with offering unregistered securities. Regulators said 340K Gemini customers are out $900M that was sent to Genesis' lending program. 

🌶️ __Spicy…__ Disgraced FTX founder Sam Bankman-Fried [launched](https://www.theverge.com/2023/1/12/23551718/sam-bankman-fried-substack-newsletter-ftx-fraud-charges) a Substack newsletter while awaiting trial on fraud charges related to his exchange's collapse. In his first post SBF denied stealing customer funds.

🎤 __Braggy…__ __Binance__ CEO Changpeng "CZ" Zhao said the 8K-person exchange is [planning](https://www.cnbc.com/2023/01/11/binance-plans-15-30percent-hiring-spree-in-2023-even-as-rivals-cut-jobs.html) a hiring spree. As other exchanges like __[Coinbase](https://robinhood.com/stocks/COIN/)__ announce fresh [layoffs](https://snacks.robinhood.com/newsletters/64ZuFLHX6YfnQ8QQYZICfn/articles/1R6BZzWQMJunSLoZpN1Ozj/), CZ said Binance expects to pump headcount by up to 30%.

Blog

The Crypto Catch-Up…

Black women are the US's fastest-growing group of entrepreneurs, but funding remains scarce

250K+ people attended MLK’s “I Have a Dream” speech at the Lincoln Memorial

💵 The funding gap

__$500 park tickets…__ for a five-hour Splash Mountain line. __[Disney’s](https://robinhood.com/stocks/DIS/)__ [revamping](https://www.cnbc.com/2023/01/10/disney-makes-it-easier-for-loyal-customers-to-visit-theme-parks.html) its perks and reservation policies as Mickey lovers return to a packed Magic Kingdom. New sweeteners include free overnight parking for resort hotel guests and digital downloads of screaming ride pictures for Genie+ pass holders (no more sneaking a blurry pic on your phone). There are also changes to Disney’s controversial reservation system, which was introduced during the pandemic:

- __In Florida:__ Walt Disney World Resort’s annual passholders can enter most parks at 2 p.m. *without* a reservation.
- __In California:__ Disneyland visitors with park-hopper tickets can switch parks as early as 11 a.m.
- __FYI:__ Disney’s parks and experiences biz makes up a third of its annual revenue. 

__Not-so-happiest place…__ Last year Disney’s parks biz exceeded prepandemic attendance levels and notched record sales after it hiked ticket prices *twice*. But the Mouse House has faced growing criticism for lofty prices and unusually long lines. Case in point: up to half of Disney World park guests splurged on its Genie+ line-skipping pass last year. 

Packed Mouse House (Jacqueline Nell/Getty Images)

Magic

__You can’t buy loyalty, but you can reward it…__ As prices pick up, Disney has to offer better perks to keep guests splurging on Cinderella Castle suites and $12 corn dogs. Fresh benefits (even small ones) could help customers justify extra time and money spent — and help companies keep them loyal.

Disney boosts park perks to restore some loyalty magic amid price hikes and long lines

__Crypto winter isn't coming…__ it's here. But HBO embraced the cold this week, launching a "Game of Thrones" non-fungible-token collection on Nifty's digital marketplace. The 5K "hero box" NFTs — minted on ethereum and palm (an ethereum sidechain) — contain "GoT" characters like White Walkers and Free Folk. They were roundly mocked as poorly designed, but still sold out within seven hours — for $150 each. 

__Like "GoT" season eight…__ NFTs are in a slump. Once the talk of the tech town, NFTs receded from public consciousness as crypto scandals (think: TerraUSD, __FTX__) sucked up all the industry's oxygen. Trading volumes plummeted 97% from January to September of last year. And “wash trading” (picture: buying and selling to yourself to create the illusion of demand) is estimated to have represented over half of that dwindling pie. Even so, some non-techy NFT mints have managed to draw interest:

- __NFTrump:__ Last month 44K Donald Trump-themed NFTs minted on polygon sold for $99 each. (Trading volume has since tanked.) 
- __NFTennis:__ The Australian Open plans to sell 2K+ tennis-themed NFTs ahead of next week's tourney. Last year the Open's mint of 6.7K NFTs sold out.

HODLOR

__It's not tech culture — it’s pop culture…__ NFTs are no longer a buzzword. Last year they were supplanted by web3, which itself seems like a distant fever dream as investors now froth over genAI (cough, [ChatGPT](https://snacks.robinhood.com/newsletters/64ZuFLHX6YfnQ8QQYZICfn/articles/5EDobF4dEXa3d5APRhq1hn/)). But HBO's seemingly successful "GoT" mint suggests there's still an appetite for some NFT projects, assuming they have a strong mainstream hook.

HBO’s "Game of Thrones" NFTs sell out even as crypto collectibles lose their sheen

Disney boosts park perks to restore some magic amid price hikes and long lines

“Top Gun: Maverick” was the highest-grossing US release last year with $719M in ticket sales

🏰 Disney perks up

__Microsoft Word meets artificial intelligence…__ We’ve come a long way since Clippy. __[Microsoft](https://robinhood.com/stocks/MSFT/)’s__ Office Assistant used to be a cartoon paperclip — now it could be a sophisticated AI brain. Microsoft has been in talks to invest $10B in __OpenAI__, Semafor [reported](https://www.semafor.com/article/01/09/2023/microsoft-eyes-10-billion-bet-on-chatgpt). OpenAI is the company behind [genAI](https://snacks.robinhood.com/newsletters/3WEG5SgBgeQScK91kmZwOc/articles/6gWjpZswZYcdRi0vcvZQos/) tools like ChatGPT and DALL-E, which generate articles and images from text prompts.

- __Excelling:__ ChatGPT went viral upon its [release](https://snacks.robinhood.com/newsletters/1tqjd2M4HaTR4MDXIMoYcr/articles/7IJUQSHnMsihoZe3E8Wbv2/) in November. OpenAI said 1M+ people signed up to test the chatbot in the first five days.

- __Power points:__ Microsoft would reportedly get to keep 75% of OpenAI’s profits until it recoups its investment. After that it would own a 49% stake in the company.

- __Outlook:__ The funding would value OpenAI at $29B, up from $20B in October. The deal could fall apart, but it’s apparently targeted to close by year’s end.

__Microsoft’s edge…__ Microsoft invested $1B in OpenAI in 2019 — and also sells the cloud infrastructure that the tech runs on. According to founder Sam Altman, OpenAI spends a few cents in computing power each time someone uses ChatGPT. That goes straight into Microsoft’s pockets. By deepening its involvement with OpenAI’s tech, Microsoft would gain an edge over cloud titans like __[Amazon](https://robinhood.com/stocks/AMZN/)__ and __Google__. Also: 

- __Search:__ Microsoft could incorporate ChatGPT’s chatbot or DALL-E’s image generator into its search engine, Bing, to better compete with Google.

- __Office:__ Microsoft could also include OpenAI’s tech in programs like Word and Outlook (think: using ChatGPT to help you write emails). 

Microsoft has entered the chat (Jakub Porzycki/Getty Images)

__Acquire (relationships) early…__ Right now OpenAI is still free to the public (though it charges developers for licenses). But one day it could disrupt Google’s search dominance and rake in billions. Microsoft got in early to build a dependent relationship, and it could reap the benefits. Still, OpenAI has fierce competition — and its commercial success is far from guaranteed.

Microsoft's reportedly in talks to invest $10B in OpenAI (it's all about the ChatGPT edge)

__Under the weather…__ US crypto exchange __[Coinbase](https://robinhood.com/stocks/COIN/)__ said it's laying off 950 people. In his announcement, CEO Brian Armstrong called out "unscrupulous actors" in crypto (an apparent reference to [SBF](https://snacks.robinhood.com/newsletters/3kOsGkEHbBt1CqkaBXzvxc/articles/6NgSN4kssplfENc3RTUY6p/)) and mentioned last year's struggling macro economy. It isn't the exchange's first big cut: 

- __Cost cutting:__ As crypto winter set in and trading volume dried up, Coinbase shed 1K+ employees in June and 60 in November.

- __Cost pumping:__ Last week Coinbase was hit with a $50M fine from NY regulators and agreed to spend another $50M on its compliance programs (think: [KYC](https://snacks.robinhood.com/newsletters/2RAMcvZH7Vv5M7DNfIJWJJ/articles/6kDN2z3N79j0yx4afvat76/)). 

__Crypto’s cold season…__ Coinbase isn’t the only one sick with crypto [contagion](https://snacks.robinhood.com/newsletters/2jcHshKduiGTXGoK1BTLfi/articles/4DpxcHuAdNYuFZJgwOGiNL/). Last year, the industry shed 26K+ roles. More recently, big players stumbled after __FTX__'s November implosion. Crypto lender __Genesis__ laid off 30% of staff this month, in its second round of cuts, and is now said to be considering bankruptcy. FYI: it also reportedly owes $900M to customers of crypto exchange Gemini. Meanwhile, crypto mega bank __[Silvergate](https://robinhood.com/stocks/SI/)__ cut 40% of its workers last week following an $8B+ [bank run](https://snacks.robinhood.com/newsletters/7aN8BRAzCXDnsbfVDy7Wtq/articles/AJUGTZjQvUMrUwWVa1rPY/).

Sick

__Contagion comes in waves…__ When a big fish like FTX sinks, it can send ripples across the crypto pond. Those ripples aren't necessarily all felt at once, because it can take a while for other big fish to get hit by the wake. Coinbase’s Armstrong said there might be more contagion coming. But contagion's waves could ultimately leave the overall industry stronger — or more centralized — by washing out crypto's weaker players.

Coinbase lays off 20% of its employees as another wave of contagion hits the crypto industry

Climate disasters in the US racked up $165B in damages last year

🤖 Microsoft GPT?

__Ripe for launch…__ After seven years of development, __[Apple](https://robinhood.com/stocks/AAPL/)__ could release its mixed-reality headset this year, Bloomberg [reported](https://www.bloomberg.com/news/newsletters/2023-01-08/when-will-apple-launch-the-reality-pro-mixed-reality-headset-apple-2023-devices-lcnfzkc7?sref=q3KSFp38). The device, apparently dubbed “RealityPro,” aims to augment a user’s environment (think: graphic overlays), not completely immerse you in a virtual world, like Meta’s headsets. While the official use cases are still TBD, it could eventually be used for everything from playing games to hosting virtual work events. 

- __How it started:__ Apple unveiled its AR ambitions in 2017, with plans to hit the market as early as 2019, but development snags have kept launches on the back burner.
- __How it’s going:__ Apple’s built a new operating system for the tech and has recently sent headset prototypes to software developers. While the headset could be ready for consumers by fall, kinks may muddy the timeline.

__Big Tech reality check…__ Headsets would be Apple’s first new major product category since the Apple Watch — and could position it against rivals like __[Meta’s](https://robinhood.com/stocks/META/)__ Oculus and __[Sony’s](https://robinhood.com/stocks/SONY/)__ PlayStation VR. But so far it seems as if consumers aren’t going gaga for expensive gadgets to sport on your face. Last year global shipments of VR and AR devices [dropped](https://www.forbes.com/sites/qai/2023/01/06/vr-headset-sales-underperform-expectations-what-does-it-mean-for-the-metaverse-in-2023/?sh=251b23c934f5) over 12%. 

- __Headsets are tech's holy grail__, but every effort’s flopped so far: __[Google](https://robinhood.com/stocks/GOOGL/)__ Glass was an epic fail, and __[Snap](https://robinhood.com/stocks/SNAP/)__ lost $40M on 300K unsold AR Spectacles.

Apple vision (Christoph Dernbach/Getty Images)

Hooky

__Apple might be bucking a trend…__ of people trying to be more connected to real-world experiences. Read: less glued to tech. We’re seeing this play out, from the underwhelming adoption of Meta’s Horizon Worlds to Gen Z [ditching](https://www.nytimes.com/2023/01/07/technology/digital-cameras-olympus-canon.html) iPhone lenses for point-and-shoot cameras and even Polaroids. After pandemic years of being cooped up with gadgets, spending on IRL experiences like travel and dining is soaring. But if anyone can make headsets succeed, it could be the company that got the world hooked on its ecosystem of hardware and apps. 

Apple could (finally) launch its mixed-reality headset, but the reality of success looks iffy

__Downward dog days…__ Athleisure icon __[Lululemon](https://robinhood.com/stocks/LULU/)__ was a pandemic winner as people donned its comfy sets for home workouts and couch chillouts. Lulu’s flexible fortunes continued well after Covid restrictions ended, but its luck might be stretching thin. While Lulu raised its sales expectations, investors had a problem with its profit forecasts: 

- __Lulu shares sank 9%__ yesterday after it [said](https://www.wsj.com/articles/lululemon-warns-of-falling-fourth-quarter-margins-11673270772?mod=business_lead_pos2) that profit margins would shrink for its holiday quarter (ending January 29). It also issued disappointing earnings targets. 
- __Piles of styles:__ While Lulu said visits to stores and sites continued to grow, high inventory levels and markdowns could weigh on its bottom line. 
- __$130 leggings now $70:__ Last quarter, Lulu had 85% more inventory than it did a year earlier. Also: over 40% of items were on sale in November, up 10%. 

__The mirror cracks…__ Discounted leggings aren’t Lulu’s only profit-draining problem. In July 2020, when stocks were soaring and athleisure sales were booming, Lulu [bought](https://snacks.robinhood.com/newsletters/q4J6y6mMs3jtkXwdTmJlG/articles/3H03bXAENNJQMZaqbIocvY/) home-fitness startup __Mirror__ for a cool $500M (its first acquisition). Think: a monthly workout subscription where trainers pump you up from a reflective screen (hence: mirror). Lulu’s CEO said that Mirror continues to be a drag on profits and is likely experiencing less adoption than anticipated.

Stretched

__Boom spending is a bust bug…__ What a company splurges on during healthy boom times can come back to bite it in a downturn (think: buying a __[BMW](https://robinhood.com/stocks/BMWYY/)__ when your portfolio’s soaring, then losing your job and still having to make payments). Lulu was far from the only one to make an optimistic splurge in 2020. One example: __[Salesforce](https://robinhood.com/stocks/CRM/)__ bought Slack for $28B when the good times were rolling. Last week it said it was cutting 10% of its workforce.

Lululemon’s winning stretch may be ending as markdowns and Mirrors weigh on profits

☎️ *Like calling all your new babysitter's references…*

Crypto loves anonymity. Bitcoin's creator, Satoshi Nakamoto, used a pseudonym, and many advocates champion the asset class for financial privacy. That core principle runs headfirst into US-based exchanges' "know your customer" (aka KYC) obligations. Think: regulatory requirements to run customer-identity checks. Now, that tension's [come to a head](https://www.axios.com/2023/01/09/crypto-spending-compliance) as exchanges are hit with fines and crypto companies spend more on compliance. 

Heard on the Block: "KYC"

Rolls-Royce sold a record number of cars last year at an average price of $534K