__Still leading the charge…__ for now. __[Tesla](https://robinhood.com/stocks/TSLA)__ rolled up with earnings yesterday, announcing that profits 9X’d last quarter from a year earlier. Tesla had said earlier this month that its car deliveries nearly [doubled](https://snacks.robinhood.com/newsletters/4JaJC0FkdGD5qt6zW5UWxa/articles/6g5fbLZOViIV6i968tWbF8/) in 2021 to almost 1M. Still, the stock dipped yesterday after Tesla [warned](https://www.cnbc.com/2022/01/26/tesla-tsla-earnings-q4-2021.html) of ongoing production challenges. Investors also have their eye on competition, which is heating up:

- Tesla’s EV market share dropped from 80% to 66% last year as __[GM](https://robinhood.com/stocks/GM)__, __[Ford](https://robinhood.com/stocks/F)__, and __[Volkswagen](https://robinhood.com/stocks/VWAGY)__ increased EV sales. Analysts expect VW to sell more EVs than Tesla by 2025, but also predict Tesla’s profits will still be higher.

__Elon time coming…__ Last year, Tesla dodged chip-shortage challenges that plagued rivals like GM by diversifying suppliers, making its own parts, and even removing parts from some models. But yesterday Tesla said supply problems are now its “main limiting factor.” 

- __Stuck:__ Tesla was supposed to start pumping out Cybertrucks last year, but earlier this month postponed the ETA to 2023, citing supply issues. 
- __Unstuck:__ EV rival __[Rivian](https://robinhood.com/stocks/RIVN)__ has already started delivering its electric trucks, and Ford’s electric F-150s are expected to hit roads this year.

Cybertruck’s Instagram vs. reality [Winslow Productions via Getty Images]

Truckin’

__Tesla’s supercharged valuation “scale power”...__ and Cybertruck’s traffic jam prove that scaling isn’t always easy. Tesla became more valuable than its five largest competitors combined by creating demand for electric cars — and making its own seem more like caviar than granola. But to *continue* succeeding it needs to scale production to match rivals like __[Toyota](https://robinhood.com/stocks/TM)__ and VW, which crank out 10X as many cars annually. To that end, Tesla plans to open new Giga-factories this year in Texas and Germany. But VW, Ford, GM, and __[Lucid](https://robinhood.com/stocks/LCID)__ also plan to invest $20B+ in US EV plants in the next few years.

Tesla’s profits 9X’d last quarter, but supply issues are catching up with the electric disruptor

__Elsa’s back in her castle…__ but not in Arendelle. Six years ago, __[Mattel](https://robinhood.com/stocks/MAT)__ lost the rights to make and sell __[Disney](https://robinhood.com/stocks/DIS)__ princess dolls to rival __[Hasbro](https://robinhood.com/stocks/HAS)__ (aka: America’s #1 toymaker). Yesterday, Mattel finally got the lucrative princesses back — and Mattel shares spiked as [much](https://robinhood.com/stocks/MAT) as 11% on the announcement. But winning back Jasmine, Ariel, and Moana was no royal carriage ride:

- __A whole new world:__ Mattel’s princess partnership started in 1996 and quickly became a profit puppy, especially after the addition of Frozen’s Elsa in 2013. 
- __Frozen out:__ Mattel sold $440M [worth](https://www.forbes.com/sites/carlieporterfield/2022/01/26/mattel-shares-jump-after-it-recoups-disney-princess-toy-rights-from-rival-hasbro/?sh=7423048157fc) of Disney princesses in 2015. Then, a year later, it lost them (#LetItGo). Since then, Mattel has changed CEOs four times. 

__Barbie’s dream makeover…__ After losing its profit princesses, Mattel doubled down on its Barbie biz, which was struggling from a sales slump. With the revamp came new, more diverse dolls (think: different skin tones, hair styles, and body types). It worked: Last year, Barbie sales jumped 87% in the first quarter, and it was [named](https://www.toyassociation.org/toys/events/toy-of-the-year-awards-home.aspx?New_ContentCollectionOrganizerCommon=4) “Doll of the Year.” After witnessing Barbie’s comeback, Disney is putting Mattel in charge of its princesses once again.

Frozen

__Intellectual > property...__ Intellectual property can be worth more than the property itself, which is why Disney enjoys having *others* turn its characters into toys — for a big licensing fee. Disney loves being courted for its IP: The mouse controls which toys get bought through its movies, so the characters matter more than the plastic. That’s why Hasbro’s slice of the Disney pie also includes rights to “Star Wars” (see: Baby Yoda toy) and soon “Indiana Jones.” Meanwhile, Mattel [has](https://corporate.mattel.com/en-us/brand-portfolio) Disney’s “Toy Story” and “Pixar Cars.”

Mattel wins back the right to make Disney princess dolls, in a deal that shows intellectual property is queen

Tesla’s profits jumped 9X last quarter, but supply issues are catching up

Dow Jones

S&P 500

Nasdaq

Bitcoin

[Smith Collection/Gado / Contributor via Getty Images]

6 people are hired every minute through LinkedIn — and applicants with profile pics get 21X as many views as those with gray silhouettes

🛻 Tesla’s truck trouble

__“The Joe Rogan Experience”...__ just got more complicated. JRE is the world's largest podcast, with an [estimated](https://www.rollingstone.com/culture/culture-news/covid-misinformation-joe-rogan-spotify-petition-1282240/) 11M listeners *per episode*. In 2020, __[Spotify](https://robinhood.com/stocks/SPOT)__ signed a deal to make the pod Spotify-exclusive for a reported $100M. Now, a viral December episode is drawing fresh criticism:

- __The guest:__ Rogan interviewed Dr. Robert Malone, a virologist who worked on early mRNA research. Malone is now a Covid vaccine critic, and was __[Twitter](https://robinhood.com/stocks/TWTR)__-banned for posting misinfo.
- __The episode:__ Malone promoted baseless conspiracy theories — from claiming hospitals have financial incentives to diagnose deaths as Covid-related to saying that getting vaxxed is riskier for people who've had Covid.
- __The backlash:__ 270 medical experts [signed](https://www.rollingstone.com/culture/culture-news/covid-misinformation-joe-rogan-spotify-petition-1282240/) a letter asking Spotify to curb misinfo on its platform, citing the Malone episode. On Monday, singer Neil Young [demanded](https://www.rollingstone.com/music/music-news/neil-young-demands-spotify-remove-music-vaccine-disinformation-1290020/) that Spotify remove all his music — or remove JRE.

__I’m a pod-star, not a doctor...__ Rogan has [said](https://www.bbc.com/news/world-us-canada-56948665) he is not anti-vax, and that he encourages "many" people to get vaccinated, but this [isn't](https://www.bbc.com/news/world-us-canada-56948665) the first time he's been criticized for Covid misinfo. Spotify has removed thousands of episodes containing Covid misinfo in the past. It has also reportedly [removed](https://www.digitalmusicnews.com/2021/04/06/joe-rogan-spotify-removing-shows/) 42 JRE episodes, including ones featuring far-right activists — but none related to vaccines. As its pod business booms, critics want clearer moderation policies.

- __$1B+:__ How much Spotify has splurged on pod-related purchases. Including: The Ringer and Parcast — *plus*, exclusives like “Call Her Daddy.” Targeted pod ads make up a growing share of Spotify’s [$2.5B](https://s22.q4cdn.com/540910603/files/doc_financials/2021/q3/Shareholder-Letter-Q3-2021_FINAL.pdf) quarterly revenue.
- __#1:__ In October, Spotify [overtook](https://appleinsider.com/articles/21/10/28/spotify-says-it-recently-passed-apple-as-top-us-podcast-platform) __[Apple](https://robinhood.com/stocks/AAPL)__ as the US's biggest pod platform, largely thanks to its "gated garden" strategy.

Spotify planting pods in its “Gated Garden” [Kjell Linder via Getty Images]

__With great publishing power comes great responsibility…__ The calls to action were broader than JRE — they were directed at Spotify’s moderation policies (or lack thereof). Unlike many large platforms, Spotify doesn't appear to have a defined misinformation policy, or at least one that’s consistently enforced. Yet moderation will likely become a growing issue for Spotify as its business grows — just as it is for other social and streaming giants. 

Joe Rogan’s Spotify pod sparks backlash from doctors and Neil Young, as moderation takes center stage

__From “Shark Tank” to the aspirin aisle…__ Celeb investor Mark Cuban [launched](https://www.npr.org/2022/01/24/1075344246/mark-cuban-pharmacy) an online pharmacy designed to lower prices of 100 generic drugs. The __Cost Plus Drug Co.__ aims to simplify healthcare’s complex biz model by cutting out intermediaries and selling drugs for wholesale prices — plus a fixed 15% markup. 

- __Drug prices are often shockingly high__ because of complex negotiations between drugmakers, pharmacies, and health insurers. 
- __CP buys drugs wholesale__ and breaks down their costs on its website. Think: ingredients = $12, manufacturing = $3, profit = $2.10. Thirty pills of a life-saving drug could cost $2.5K at __[CVS](https://robinhood.com/stocks/CVS)__ — but $17 at CP.
- __CP doesn’t accept insurance,__ but it could be a huge help for the 31M Americans without insurance.

__Rattling big pill bottles…__ Nearly 80% of US prescriptions are managed by CVS, __[Cigna](https://robinhood.com/stocks/CI)__, and __[UnitedHealth](https://robinhood.com/stocks/UNH)__. Critics [say](https://stories.usatodaynetwork.com/sideeffects/censored-analysis-confirms-complaints-pharmacy-benefit-managers/) pharmacy heavyweights use complex clauses to drive up prices, and regulators are investigating the industry. Several companies are trying to fix healthcare’s pricing problem:

- __Large employers__ like __[Walmart](https://robinhood.com/stocks/WMT)__, __[Boeing](https://robinhood.com/stocks/BA)__, __[Apple](https://robinhood.com/stocks/AAPL)__, and __[Microsoft](https://robinhood.com/stocks/MSFT)__ formed a healthcare group last year to ditch big pharmacies and save money. 
- __Health startups__ including __Capsule__, __Roman__, __[Hims & Hers](https://robinhood.com/stocks/HIMS)__, and __[GoodRx](https://robinhood.com/stocks/GDRX)__ also offer transparent drug marketplaces that challenge traditional pharmacies.

Pills

__Price matters, but so does transparency…__ That’s why companies are pursuing more transparent alternatives to traditional pharma. Cost Plus can’t *fully* replace pharmacy behemoths (it only sells generic drugs) and its prices may not be lower than competitors’. But CP is building a Texas factory to make its own meds. And if it steals sales from juggernauts like CVS, it could help push the whole industry to become more transparent.

Mark Cuban’s Cost Plus wants to make prescription drugs more affordable and transparent

Doctors (and Neil Young) call on Spotify to moderate misinfo after a viral Joe Rogan pod

[picture alliance / Contributor via Getty Images]

95% of workers want to set their own hours, while 78% want location flexibility 

🎤 Joe Rogan’s Spoti-fiasco

__Going 50 in a 30…__ Forget the free cold brew. Safe drivers can now [earn](https://www.wsj.com/articles/allstate-and-hancock-seek-careful-drivers-with-healthy-diets-11643032803?mod=lead_feature_below_a_pos1) discounts at __[Starbucks](https://robinhood.com/stocks/SBUX)__ through a data-sharing deal between life insurer __John Hancock__ and car insurer __[Allstate](https://robinhood.com/stocks/ALL)__. Hancock customers *already* earn discounts on life insurance, Starbucks lattes, and __[Amazon](https://robinhood.com/stocks/AMZN)__ Prime subs for making healthy lifestyle choices. Think: getting 10K steps in or eating kale. Now they’ll also get perks for driving safely.

- __Different datasets:__ Hancock uses health data from __[Apple](https://robinhood.com/stocks/AAPL)__ Watches and __[Fitbits](https://robinhood.com/stocks/FIT)__ to inform life-insurance prices, and Allstate uses driving data from GPS systems to help set car-insurance prices. 
- __But safer drivers don’t just crash less…__ they also *live* longer. That’s why Hancock is incentivizing its life-insurance customers to enroll in Allstate’s tracking program to earn rewards for not speeding.
- __Win-win:__ Both insurers hope to gain access to each other’s customers by giving them more ways to earn rewards. 

__Surveillan-surance…__ is becoming more popular as data collection gets easier. In 2018, Hancock became one of the first major US life insurers to use personal health data to set *all* its prices. Today many insurers like __United Healthcare__, __[Oscar Health](https://robinhood.com/stocks/OSCR)__, and __[CVS](https://robinhood.com/stocks/CVS)__-owned __Aetna__ also use interactive systems to track and reward customers for risk-reducing behaviors. Like: jogging or getting a mammogram. 

[Westend61 via GettyImages]

Grande

__There’s a trade-off between savings and privacy…__ Data-tracking programs let Hancock customers save money on insurance premiums *and* lattes. But those savings come at a cost — in some cases nearly constant surveillance. Critics of data-driven-pricing programs [worry](https://www.ama-assn.org/practice-management/digital/insurers-want-patients-use-wearables-could-be-problem) they could be problematic for other insurers too. Think: health insurers denying coverage to people with preexisting conditions. As connected devices increase, so will the prevalence of consumer data.

Insurance giants offer perks like Starbucks discounts and Prime subs for safe driving

__Welcome to Taco B-school...__ where an MBA comes with a CGC (Cheesy Gordita Crunch). Taco Bell is [launching](https://www.marketwatch.com/story/taco-bell-launching-a-business-school-for-prospective-franchisees-11642597289?mod=mw_latestnews) a business school for aspiring franchisees in partnership with the University of Louisville. The six-week boot camp will train existing Taco Bell managers on financing, HR, marketing, and other topics related to running a business. TB employees who are accepted will receive scholarships to cover tuition, plus some enviable Taco B-school [swag](https://www.marketwatch.com/story/taco-bell-launching-a-business-school-for-prospective-franchisees-11642597289?mod=mw_latestnews).

- __Most of Taco Bell's 7K locations__ are [franchised](https://www.franchise500.com/article/363039), aka: owned by ordinary people or orgs. Taco Bell sells the rights to use its brand (as long as the gorditas are crunchy, no one knows who owns it). Franchise owners give TB a cut of their sales. 
- The new program will be supported through the Yum Center for Global Franchise Excellence, which aims to unlock opportunities for underrepresented communities through education on the business of franchising. 
- __KenTacoHut:__ TB's parent, __[Yum Brands](https://robinhood.com/stocks/YUM)__, also owns KFC and Pizza Hut. Yum shares are up 18% over the past year as drive-thrus + fried foods = pandemic comfort.

__Taco baseball cap...__ T-Bell isn't the only chain to start a school for employees: __[McDonald's](https://robinhood.com/stocks/MCD)__ Hamburger University has been [training](https://www.foxbusiness.com/lifestyle/taco-bell-business-school-franchise-owners) managers and franchisees for 60 years, and California staple __In-N-Out__ [runs](https://www.mashed.com/136239/fast-food-hamburgers-ranked-worst-to-best/) a university for new managers.

- While fast-food jobs are often seen as stepping-stones to other careers, TB wants to show restaurant leaders “how their careers could flourish” at Taco Bell.

Auditioning to be the Taco Bell Business School mascot [Patricia Marroquin/Moment via Getty Images]

Crunch

__There’s nothing tastier than retention…__ because *internal* marketing has never been more important. The Great Resignation is real: US job openings soared during the pandemic as workers quit for greener pastures, while employers dangled wage hikes and benefits like free college tuition to attract flighty labor. The restaurant industry still hasn’t recovered the [650K](https://www.cnbc.com/2022/01/24/national-restaurant-association-asks-congress-for-aid-amid-omicron.html) jobs lost early in the pandemic. Benefits like educational development could be the difference between shuttered chains and a thriving business. 

Taco Bell opens a business school, because the most in-demand ingredient is retention

Insurance giants offer Starbucks and Prime perks for safe driving

Financial aid is so complex that US college grads left behind $3.75B in free aid in 2021

☕ Starbucks as an insurance perk

__Color of the week: red...__ We're not talking lipstick. Last week the __[Nasdaq](https://learn.robinhood.com/articles/1GXPrecRfkSNp0aBblBSsL/what-is-the-nasdaq/)__ index entered [correction](https://learn.robinhood.com/articles/5Ox6TeuJAgvthA6NbsWmu0/what-is-a-correction/) territory — a drop of 10% or more from the most recent high — for the first time since March. The Nasdaq is the techiest of the Big Three US indexes.

- __Big Tech:__ [More than half](https://www.investopedia.com/terms/n/nasdaqcompositeindex.asp) of the Nasdaq’s 3K+ stocks are tech. After gaining 22% last year, it's down *13%* from its November record (#corrected).
- __Big *Red*:__ 40% of Nasdaq stocks have [fallen by half](https://www.wsj.com/articles/global-stock-markets-dow-update-01-19-2022-11642581538?st=3cy88re685iu59a&reflink=desktopwebshare_twitter) since November.

__Some ingredients…__ of the tech sell-off: Most are related to *inflation*, which is nearly at a [40-year](https://www.latimes.com/business/story/2022-01-12/consumer-prices-soared-past-year) high as demand > supply. To tame rising prices, the Fed is expected to hike rates at least [three](https://www.cnbc.com/2022/01/10/goldman-predicts-the-fed-while-hike-rates-four-times-this-year-more-than-previously-expected.html#:~:text=The%20Wall%20Street%20firm's%20chief,of%20just%20a%20month%20ago.) times this year. The problem for tech stocks: They’re “competing” with other investments.

- __Rising interest rates__ can make US gov’t bonds and savings accounts *more attractive* compared to riskier assets like tech stocks. 
- __Wall Street tends to value stocks__ based on their potential *future* returns (key word: future). But $1 today is worth more than $1 tomorrow because… inflation. 
- __As interest rates rise,__ the value of a dollar *today* also rises because it could be invested ASAP in bonds or savings with higher returns. But the prices of many high-flying tech stocks are based on potential growth. That’s one reason __[Tesla’s](https://robinhood.com/stocks/TSLA)__ worth 12X as much as __[GM](https://robinhood.com/stocks/GM)__, despite having only a quarter of its sales. 
- __Opportunity cost:__ As the potential returns from lower-risk investments (like US gov’t bonds) rises, investors want to see higher returns from tech to justify prices.

__The TLDR…__ Tech shares soared as the Fed gave us near-zero rates during the pandemic, since *any* potential growth seemed better than zero interest. Now that rates are rising, tech is rebalancing. The Dow — which is heavier on non-tech stocks with lower expectations of fast growth — is barely down.

[Mario Tama / Staff via Getty Images]

__Corrections are normal…__ While they might be painful short term, corrections can help rebalance overvalued stocks. They can hit assets, indexes, or entire markets. Tech stocks felt frothy at their November peak (a correction is like a barista skimming off foam). And we’ve been here before: The Nasdaq has had [66](https://www.marketwatch.com/story/nasdaq-composite-has-logged-65-corrections-since-1971-and-as-it-heads-for-66-heres-how-the-stock-index-tends-to-perform-afterward-11642623639) corrections since 1971, but is still up nearly 7,400% over the past 40 years.

Tech stocks’ big plunge: How latte prices and Fed rates help explain the “correction”

__Anti-antitrust...__ Big Tech is [fighting](https://www.wsj.com/articles/senate-panel-approves-antitrust-bill-restricting-big-tech-platforms-11642701487) for its platform power. Last week a Senate panel approved an “Innovation and Choice” bill that would force __[Amazon](https://robinhood.com/stocks/AMZN)__, __[Google](https://robinhood.com/stocks/GOOGL)__, __[Meta](https://robinhood.com/stocks/FB)__, and __[Apple](https://robinhood.com/stocks/AAPL)__ to stop favoring their products over competitors’. Think: Amazon putting its Basics at the top of search results. Smaller techies like __[Yelp](https://robinhood.com/stocks/YELP)__ and __[Sonos](https://robinhood.com/stocks/SONO)__ support the regulation, which they say will boost competition. The bill is moving on to a final vote, but analysts say it’s unlikely to pass before midterms, when Dems could lose the numbers needed to clear it. 

__Boom times for the YOLO-conomy...__ While pandemic powerhouses struggle (cough, Peloton), shares of __Prada__, __[Burberry](https://robinhood.com/stocks/BURBY)__, and __[Richemont](https://robinhood.com/stocks/CFRUY)__ [spiked](https://www.theguardian.com/business/2022/jan/19/burberry-predicts-35-rise-in-annual-profits-backed-by-asia-sales) last week after the luxury retailers reported strong demand for designer goods like chic puffy jackets and diamonds. Sales have actually exceeded pre-pandemic levels for several companies, despite travel restrictions and soaring prices, which wealthy consumers are less sensitive to. As younger spenders treat themselves to Valentino instead of vacays, luxury brands expect profits to keep rising.

Zoom Out

Stories we’re watching...

__Everyone wants BinaxNow…__ *now*. __[Abbott Labs’](https://robinhood.com/stocks/ABT)__ at-home Covid test accounts for 75% of US test sales, but good luck finding one. Test makers Abbott, __[Roche](https://robinhood.com/stocks/RHHBY)__, and __[Becton Dickinson](https://robinhood.com/stocks/BDX)__ saw [massive](https://www.cbsnews.com/news/covid-19-tests-provider-profit/) profits last year as we left the couch. But when cases fell this summer, Abbott laid off workers and closed factories, which led to test shortages. As Omicron surges, Abbott’s revving up production. Biden is paying the company $2B to provide nearly half of the free Covid tests Americans have started ordering. We’ll see how Omicron affected profits when Abbott reports on Wednesday.

__Cybertruck is cyber-stuck...__ Tesla rolls up with earnings Wednesday, and competition is more electric than ever. Tesla has reportedly [pushed](https://www.reuters.com/technology/exclusive-tesla-delays-initial-production-cybertruck-early-2023-source-2022-01-13/) back production of its much-hyped electric Cybertruck to 2023. Meanwhile, rival EV maker __[Rivian](https://robinhood.com/stocks/RIVN)__ is already delivering trucks, and __[Ford](https://robinhood.com/stocks/F)__ plans to drop electric F-150s on driveways this spring. Still, Tesla’s car deliveries [doubled](https://snacks.robinhood.com/newsletters/4JaJC0FkdGD5qt6zW5UWxa/articles/6g5fbLZOViIV6i968tWbF8/) last year from 2020 and its solar-power biz turned profitable. But Tesla’s facing heavy regulatory scrutiny, while a Tesla driver is facing felony charges after a fatal crash involving Autopilot.

Events

Coming up this week...

- __[Spinout](https://snacks.robinhood.com/newsletters/2aaB9GnrWgVHhjJd7bFJu/articles/1cvFtVr0b2fj1m1iC9AgUW/):__ __[Peloton](https://robinhood.com/stocks/PTON)__ shares plunged after a CNBC report said the company was pausing production of its bikes and treadmills. Pelo-demand fizzled last quarter after a pandemic boom, and store closures and layoffs could follow.
- __[#Influence](https://snacks.robinhood.com/newsletters/2aaB9GnrWgVHhjJd7bFJu/articles/2UWDolcoaAHhja6kAnJxsL/):__ Instagram and __TikTok__ rolled out paid subscription tools for creators ranging in price from $1 to $100/month, in a bid to lure top influencers and their followers from rivals.
- __[Gamed](https://snacks.robinhood.com/newsletters/4eOJialeY3vTs2AHV0FkZt/articles/5Tuqimhcf73WVRvJ5YTv5C):__ __[Microsoft](https://robinhood.com/stocks/MSFT)__ made a bid to buy Candy Crush maker __[Activision Blizzard](https://robinhood.com/stocks/ATVI)__ for $70B in the largest cash acquisition ever — it would cement gaming’s crucial role in Microsoft’s metaverse plans.

ICYMI

Last week's highlights...

Calculating the value of a future latte [JGI/Jamie Grill via Getty Images]

The 200 most popular songs last year accounted for just 5% of total streams, as Gen Z discovers retro hits from Fleetwood Mac and Creedence Clearwater Revival on TikTok

🔻 Tech’s big drop, unpacked

__Worse than a fake death on “Sex and the City”...__ Mr. Big news: __[Peloton](https://robinhood.com/stocks/PTON)__ is temporarily halting production of its spin bikes and treadmills, [CNBC](https://www.cnbc.com/2022/01/20/peloton-to-pause-production-of-its-bikes-treadmills-as-demand-wanes.html) reports. In a confidential presentation, Peloton reportedly said that demand for its connected fitness equipment has faced a “significant reduction” since mid-pandemic. Picture: thousands of unsold bikes and treads sitting in storage depots. 

- __Peloton stock tanked 24% yesterday__ to below its IPO price, and was temporarily halted for trading. Shares have lost 70% of their value since November. 
- __Peloton plans to pause bike production__ for two months and treadmill production for six weeks. The pricier "+" versions of each will be paused *even longer*.
- __Last year,__ Peloton majorly [fumbled](https://snacks.robinhood.com/newsletters/4yW1t7ZAlpeTEKYaBK3zSe/articles/4Hhp3uBfBZdGd5inbOOgxo/) its response to demands to recall its Tread+ after thousands of injuries and one death. It belatedly issued a recall in August.

__Pre-[Zoom](https://robinhood.com/stocks/ZM) Beyoncé ride...__ Early in the pandemic, people rushed to snap up Peloton’s $2K bikes and $4K treadmills. Sales nearly tripled, subscriptions more than doubled, and it even turned a profit. But since all that demand was "pulled forward" and IRL workouts have returned, Peloton's growth has dramatically slowed. It *lost* $376M last quarter, and the new year is off to an even rougher start…

- __1st:__ CNBC [reported](https://www.cnbc.com/2022/01/19/peloton-insiders-sold-nearly-500-million-in-stock-before-its-big-drop-.html) that Peloton hired __McKinsey__ to consult on its cost structure, which could translate to layoffs and store closures. It has reportedly started cutting jobs already. 
- __2nd:__ SEC filings [showed](https://www.cnbc.com/2022/01/19/peloton-insiders-sold-nearly-500-million-in-stock-before-its-big-drop-.html) that Peloton insiders sold ~$500M worth of shares before the stock plunged earlier this week.


[SOPA Images / Contributor via Getty Images]

Sweat

__Too much optimism can be dangerous…__ Peloton’s growth forecasts for this year were *way off*. It seriously underestimated the possibility of a drop in demand. As the poster child of pandemic thrivers, Peloton had months-long shipping delays because orders were so strong. Now it has the opposite problem: so much unsold inventory that it could start a warehouse Equinox. 

Peloton pauses production of its fitness equipment as unsold bikes and treadmills pile up

__Like, share, subscribe…__ The influencer's Triple Crown. This week __Instagram__ and __TikTok__ began [testing](https://techcrunch.com/2022/01/19/instagram-launches-early-test-of-creator-subscriptions-in-the-u-s/) tools that allow creators to offer paid subscriptions. Both are hoping to drive more traffic to their apps. TikTok didn’t share details about its subscription, but here’s what we know about Insta’s:

- __Only 10 creators__ were invited to test the feature, including Olympic gymnast @jordanchiles (431K followers) and spiritual coach @bunnymichael (216K followers). 
- __Creators can charge__ anywhere from $1 to $100 for access to subscriber-only content and special badges that help fans stand out in crowded comment sections.
- __Insta is *not* taking a cut__ of creator earnings — yet. But it plans to expand the program to all creators in coming months, and may start “sharing” revenue in 2023.

__Liked Jason Derulo’s TikTok…__ and his Reel, *and* his __[Snap](https://robinhood.com/stocks/SNAP)__ story. Social giants are competing with new features to court top creators, whose millions of followers drive massive engagement. By attracting influencers with paid subscriptions, social platforms hope to win over *their* followers.

- __Instagram__, __TikTok__, and __Snapchat__ have between 38M and 45M users each, and that gap is expected to narrow to *about 1M* users by 2025.
- __Social platforms__ have spent billions on “creator funds” to attract top talent, and the growing creator economy is worth $100B+.
- __Meanwhile, creator-focused platforms__ like __Clubhouse__, __Patreon__, __Cameo__, and __OnlyFans__ boomed during the pandemic by connecting creators directly to fans.

Fluffy only meets subscribers [Westend61 via Getty Images]

Superfan

__Influencers are influencing tech companies…__ Creators have more leverage than ever before. Social companies initially focused on user growth, not creators. But now that the market is saturated and they’re competing for the same users, keeping top talent is key to engagement. And engagement is key to social’s profit puppy: ads. 

Insta and TikTok roll out creator subscriptions — because influencers are their competitive advantage

🚴 Peloton halts production of its fitness equipment as bikes and treadmills pile up 

More homes were sold in the US last year than any year since 2006

🚴 Peloton stops spinning

__Testing, testing...__ 1, 2, 3, 4. Americans can now order four free at-home Covid tests per household, courtesy of Uncle Sam. The ordering [website](https://www.covidtests.gov/) rolled out Tuesday and is surprisingly easy to use: Click the big "order free at-home tests" button, type your name and address, and submit. USPS is shipping all orders, which should arrive in 7 to 12 days.

- __Good execution:__ Government sites aren't known for being sleek. But apart from a few [hiccups](https://www.cnbc.com/2022/01/18/some-americans-blocked-from-ordering-bidens-free-covid-tests-in-early-website-launch.html), [covidtests.gov](https://www.covidtests.gov) appears to be running smoothly.
- __Not-so-good timing:__ Ideally the site would’ve launched *before* the holiday Omicron surge, but the Biden admin had [rejected](https://www.vanityfair.com/news/2021/12/the-biden-administration-rejected-an-october-proposal-for-free-rapid-tests-for-the-holidays) an October proposal for free tests. The US is now logging record Covid cases, with Omicron making up [nearly all](https://www.dailymail.co.uk/health/article-10416035/Up-300-000-Americans-die-time-Omicron-variant-surge-eases-mid-March.html) infections. 

__N-95 problems…__ and a test is one. Many Americans had [trouble](https://snacks.robinhood.com/newsletters/13asBadMK2y3ouhspAuSvD/articles/1sMEmrOSsUo3x8IRzK62vL/) getting tested over the holidays. Think: hours-long lines at free sites and sold-out kits. Meanwhile, retailers like __[Walgreens](https://robinhood.com/stocks/WBA)__ and __[Walmart](https://robinhood.com/stocks/WMT)__ and diagnostic companies like __[Abbott](https://robinhood.com/stocks/ABT)__ and __[Labcorp](https://robinhood.com/stocks/LH)__ raked in [billions](https://snacks.robinhood.com/newsletters/13asBadMK2y3ouhspAuSvD/articles/1sMEmrOSsUo3x8IRzK62vL/). But more help is coming:

- __Tests:__ Private insurers [are now required](https://www.npr.org/sections/coronavirus-live-updates/2022/01/10/1071899471/insurance-at-home-covid-tests-white-house) to reimburse up to eight home Covid tests/month.
- __Masks:__ The US will [distribute](https://www.nytimes.com/live/2022/01/19/world/omicron-covid-vaccine-tests) 400M free N-95 masks at health centers and pharmacies starting next week. 
- __Antivirals:__ The Biden admin purchased 20M courses of __[Pfizer’s](https://robinhood.com/stocks/PFE)__ newly authorized Covid pill, which the pharma giant [said](https://www.wsj.com/articles/pfizers-new-covid-19-pill-works-against-omicron-in-lab-11642528120) was effective at treating Omicron in tests. 

[Chip Somodevilla / Staff via Getty Images]

Ship

__The “new normal” still isn’t normal…__ yet. At a press conference marking Year 1 in office, President Biden said yesterday that the US *wouldn’t* go back to lockdowns or closed schools. He said we now have the tools for a future where Covid isn’t a crisis. Dr. Anthony Fauci [suggested](https://www.cnn.com/2022/01/18/health/us-coronavirus-tuesday/index.html) that Omicron — already peaking in some states — *could* mark the end of Covid’s pandemic phase. Still, economists [cut](https://www.wsj.com/articles/omicron-inflation-drive-down-u-s-growth-outlook-11642345202) the US’s annual growth outlook as Omicron exacerbates shortages and inflation.

The US launches free Covid test orders, as Biden boosts tools to manage the “new normal”

__Can you hear me now?...__ Yesterday __[Verizon](https://robinhood.com/stocks/VZ)__ and __[AT&T](https://robinhood.com/stocks/T)__ finally [activated](https://www.cnbc.com/2022/01/19/5g-launch-wednesday-caps-years-of-hype-investment.html) their faster 5G networks, which could power everything from crisper gaming and video chatting to VR and self-driving cars. Earlier this month __airlines and regulators__ asked the phone carriers to delay the 5G rollout, warning it could cause "catastrophic disruption" for flights by interfering with planes’ navigation systems. 

- __The compromise:__ Verizon and AT&T launched yesterday - but agreed *not* to launch within two-mile “buffer zones” around 50 major airports. 
- __Some airlines canceled flights anyway:__ Airlines have also cut thousands of flights because of Omicron-related staffing shortages and bad weather.

__Will the real 5G please turn on…__ AT&T and Verizon have offered “low-band” 5G (that’s usually not much faster than 4G) in the US for years, while spending billions building infrastructure to deploy the significantly faster “C-band” 5G. Verizon and AT&T together have paid nearly *$70B* for rights to use the newly available wavelengths that power C-band.

- __In nearly 40 countries__ C-band 5G has already been deployed without disrupting airlines. 
- __But in the US__ millions of customers in buffer zones may have to wait a few more months until airlines, carriers, and regulators hash out an air-safety deal.

Twitter sarcasm hits different in 5G [Westend61 via Getty Images]

OM(5)G

__Cell companies can’t afford another long delay…__ because 5G may be losing ground to satellite internet. 5G frustration, plus these latest delays, could help satellite internet take off: The satellite-internet industry is expected to balloon 6X by 2030 as companies like __Starlink__, __OneWeb__, __HughesNet__, and __[Viasat](https://robinhood.com/stocks/VSAT)__ keep growing.

Verizon and AT&T launch their 5G service after flight-safety delays — but they’ve got competition 

Biden admin launches free Covid test orders, masks, and more to manage “the new normal”

NYC is projecting a balanced budget (read: no deficit) for the first time ever — thanks to pandemic aid and a tax hike on millionaires

😷 Free Covid tests

__Candy, crushed…__ Yesterday __[Microsoft](https://robinhood.com/stocks/MSFT)__ [announced](https://www.nytimes.com/2022/01/18/business/microsoft-activision-blizzard.html) plans to buy __[Activision Blizzard](https://robinhood.com/stocks/ATVI)__, which makes hits like World of Warcraft and Candy Crush, for about $70B — the largest all-cash acquisition in corporate history. For reference: Previously Microsoft’s biggest deal was its $26B __LinkedIn__ purchase. Shares of Activision spiked 26% yesterday, after slipping 27% since California regulators sued the company over employee harassment in July. 

- __Microsoft’s__ gaming biz is now the third largest in the world after __[Tencent’s](https://robinhood.com/stocks/TCEHY)__ and __[Sony’s](https://robinhood.com/stocks/SONY)__. Microsoft’s existing gaming biz (think: Xbox, Minecraft) brought in $15B last year, and its Xbox Game Pass monthly subscription now has 25M subscribers.
- __Antitrust scrutiny is expected,__ but Microsoft is reportedly so confident the deal will close, it’s agreed to pay a $3B cancellation fee if it falls through.

__When it games, it pours…__ Sales across the gaming industry boomed 27% during lockdown in 2020 and continued growing last year. Gaming revenues are forecast to jump from $180B in 2021 to $220B by 2024. And as gaming companies reach new sales levels, there’s been a flurry of consolidation: There were $117B worth of gaming acquisitions last year, and Grand Theft Auto maker __[Take-Two](https://robinhood.com/stocks/TTWO)__ agreed to buy FarmVille creator __[Zynga](https://robinhood.com/stocks/ZNGA)__ last week for $12.7B.

[Anadolu Agency / Contributor via Getty Images]

Meringues

__Games could be key to monetizing the metaverse(s)...__ As Microsoft races rivals like __[Meta](https://robinhood.com/stocks/FB)__ (fka: Facebook) and __[Nvidia](https://robinhood.com/stocks/NVDA)__ to build the first widely used metaverse, blockbuster games could help attract skeptics. Platforms like __Fortnite__ and __[Roblox](https://robinhood.com/stocks/RBLX)__ have already built massive followings and in-game virtual economies. CEO Satya Nadella said Activision “will play a key role” in building metaverse platforms for 3B global gamers.

Microsoft’s $70B Activision bid is the biggest cash deal ever, cementing gaming in the metaverse

__Don't look up...__ at your streaming bill. __[Netflix](https://robinhood.com/stocks/NFLX)__ is [raising](https://www.nbcnews.com/news/us-news/netflix-raises-prices-plans-us-canada-rcna12359) prices for its 74M subscribers in the US and Canada across plans. The standard plan (aka: the most popular) is rising by $1.50/month to $15.50. The hike comes less than a year and a half after the Flix's last US increase.

- __Watch again:__ Netflix gained 36M subscribers in 2020 as we hibernated with laptops, ramen, and "Tiger King."
- __Next episode:__ That led to subscription saturation (#subscripturation) and *slowing growth*. Last quarter Netflix added fewer than 4.5M subs.

__The real "Single's Inferno"...__ no one to share a Netflix password with. US-Canada subscribers make up more than a third of Netflix’s 214M subs. But in the second quarter Netflix *lost* US-Canada subscribers. The price hikes could add $1B+ in annual revenue to compensate for sluggish growth in the Flix’d-out market. As streaming competition #intensifies, Netflix is exploring other growth opportunities:

- __New products:__ Last year it launched a merch [shop](https://www.netflix.shop/?gclid=CjwKCAiA55mPBhBOEiwANmzoQquoR8cPayCxsSGKhk79w-amHLMwDBMxo8mnsAKXoK4T7cfniVJ7hBoCjpgQAvD_BwE) (think: "Emily in Paris" sunglasses). It also [released](https://about.netflix.com/en/news/let-the-games-begin-a-new-way-to-experience-entertainment-on-mobile) games on its mobile app, including *two* based on "Stranger Things."
- __New markets:__ Netflix is doubling down on foreign content like “Squid Game” for international growth. Last month it [slashed](https://www.wsj.com/articles/netflix-slashes-india-prices-in-battle-with-amazon-disney-11639650086?mod=hp_lista_pos1) prices in India to $2.60 to compete with __[Disney](https://robinhood.com/stocks/DIS)__ and __[Amazon](https://robinhood.com/stocks/AMZN)__ in the [largest](https://www.wsj.com/articles/netflix-slashes-india-prices-in-battle-with-amazon-disney-11639650086?mod=hp_lista_pos1) untapped digital market. 

Reviewing the subscription bills like [YinYang/E+ via Getty Images]

Inferno

__Saturated customers pay for *un*saturated growth…__ Netflix has become a cultural staple in the US. It’s betting you’ll shell out the extra $1.50/month to not feel left out while your coworkers talk “Cobra Kai.” While saturated markets give Netflix *price power*, unsaturated markets like India can give it growth power. Of India’s 1.4B people, only 5M are Netflix subscribers. Netflix is [looking](https://www.wsj.com/articles/netflix-slashes-india-prices-in-battle-with-amazon-disney-11639650086?mod=hp_lista_pos1) to India for its “next 100 million” — and it can afford to slash prices abroad by hiking prices at home. 

Netflix raises US and Canadian prices again but slashes prices in India to reach its next “100 million”

Microsoft makes $70B Activision bid in a bet on gaming in the metaverse

EVs sales in Europe beat diesel-car sales in December for the first time, but gas-powered cars still sold best of all

🎮 Microsoft’s $70B meta-gaming gambit

__Vertical dancing > vertical integration...__ 17-year-old Charli D'Amelio [earned more](https://www.wsj.com/articles/these-tiktok-stars-made-more-money-than-many-of-americas-top-ceos-11642078170?mod=hp_lista_pos1) last year than the CEOs of __[Exxon](https://robinhood.com/stocks/XOM)__, __[Starbucks](https://robinhood.com/stocks/SBUX)__, __[McDonald's](https://robinhood.com/stocks/MCD)__, *and* __[Delta](https://robinhood.com/stocks/DAL)__ (sorry, Ed). D'Amelio is __TikTok's__ #1 kidfluencer, or under-18 influencer whose fans are mainly kids. While TikTok doesn't share ad revenue, last year the D'Amelio fam converted Charli's 133M following into [$17.5M](https://www.forbes.com/sites/abrambrown/2022/01/07/top-earning-tiktokers-charli-dixie-damelio-addison-rae-bella-poarch-josh-richards/?sh=1ed35a03afa4) worth of brand deals, product promos, and a clothing line. By comparison, median pay for S&P 500 CEOs was $13M (womp).

- __Kidfluencers are getting younger,__ with toddlers and tweens raking in [more](https://www.insiderintelligence.com/insights/influencer-marketing-report/) marketing $$. Like: 10-year-old Ryan Kaji, the star of toy-themed YouTube channel “Ryan’s World,” which clears his family [$25M](https://www.nytimes.com/2022/01/05/magazine/ryan-kaji-youtube.html) a year.
- __Toddler influencers:__ Some of the biggest kid-driven YT channels feature [toddlers](https://www.nytimes.com/2019/03/01/business/media/social-media-influencers-kids.html). Take 3-year-old twins Taytum and Oakley Fisher, whose channel can reportedly rake in [$300K/month](https://www.agilitypr.com/pr-news/public-relations/the-rise-of-kidfluencers-3-examples-of-todays-biggest-stars/) through brand deals, sponsored posts, and ads.

__"Account managed by mom"...__ Instead of watching “SpongeBob” on TV cut by cereal commercials, iPhone-laden kids are consuming sponsored content from young influencers they idolize (Addison Rae vs. Hannah Montana). As internet usage skews [younger](https://www.traackr.com/blog/trend-lightly-keeping-up-with-kidfluencers), corporations are putting kidfluencers at the center of their marketing strategy. Last year the global kids digital ad market was worth __[$1.7B](https://www.traackr.com/blog/trend-lightly-keeping-up-with-kidfluencers)__.

- __[Mattel](https://robinhood.com/stocks/MAT), [Staples](https://robinhood.com/stocks/SPLS), and [Walmart](https://robinhood.com/stocks/WMT)__ are bankrolling major endorsement deals for toddlers and tweens with large followings. Think: "[First Sleepover Opening Giant Presents](https://www.youtube.com/watch?v=WEOMugn0zN4)."
- __[Amazon](https://robinhood.com/stocks/AMZN), Walmart, and [Skechers](https://robinhood.com/stocks/SKX)__ partnered with Ryan to reach kids on his 32M-strong YT channel, where he unwraps and reviews toys.

Subscribe

__Kidfluencer culture is raising concerns…__ Advertisers are [splurging](https://www.nytimes.com/2019/03/01/business/media/social-media-influencers-kids.html) to reach children beyond TVs, but often kids can’t distinguish between ads and content — *especially* on social apps. They can be subconsciously prompted to pine for the latest Hot Wheels or D’Amelio eyeshadow. Also: Kidfluencers [aren’t](https://www.nytimes.com/2019/03/01/business/media/social-media-influencers-kids.html) as legally protected as child actors (e.g.: parents don’t need to set aside their earnings). Kidfluencer marketing is sparking [backlash](https://thehill.com/policy/technology/548342-instagram-sparks-new-concerns-over-kidfluencer-culture) from regulators, who view it as deceptive and potentially [psychologically harmful](https://www.wsj.com/articles/instagram-effects-on-children-is-being-investigated-by-coalition-of-states-11637262000?mod=article_inlinehttps://www.wsj.com/articles/instagram-effects-on-children-is-being-investigated-by-coalition-of-states-11637262000?mod=article_inline). US lawmakers recently [proposed](https://www.markey.senate.gov/news/press-releases/senators-markey-and-blumenthal-rep-castor-reintroduce-legislation-to-protect-children-and-teens-from-online-manipulation-and-harm) legislation to protect kids from manipulative social-media marketing.

The rise of uber-rich “kidfluencers” raises concerns over the growing biz of targeting children

__The Great Sick-Out...__ The fast-spreading Omicron variant has left [millions](https://www.cbsnews.com/news/covid-omicron-workers-out-sick/) of workers stuck at home, with 700K+ new cases [reported](https://www.nytimes.com/interactive/2021/us/covid-cases.html) in the US *daily*. Grocery stores are [operating](https://www.cnbc.com/2022/01/11/empty-grocery-shelves-return-as-sick-employees-supply-chain-delays-collide.html) with half their staff and empty shelves. __[Starbucks](https://robinhood.com/stocks/SBUX)__, __[Apple](https://robinhood.com/stocks/AAPL)__, __Walmart__, __[Lululemon](https://robinhood.com/stocks/LULU)__, __[Macy's](https://robinhood.com/stocks/M)__, and __[Nike](https://robinhood.com/stocks/NKE)__ have [reduced](https://snacks.robinhood.com/newsletters/4EvkfQv2ddElX8wVmHCO7L/articles/3c2guEIznx5uVgAenePw4u/) store hours or temporarily closed locations. Meanwhile, a fifth of US hospitals [are](https://www.bloomberg.com/news/articles/2022-01-05/one-in-five-u-s-hospitals-face-staffing-shortages-most-in-year?sref=q3KSFp38) severely understaffed. But Omicron appears to have [peaked](https://www.wsj.com/articles/omicron-peak-appears-to-have-passed-in-u-k-offering-hope-the-wave-is-receding-11642078349) in the UK, and could be peaking in the US. __[Pfizer](https://robinhood.com/stocks/PFE)__ says its Omicron vax will be ready by March, while President Biden is [preparing](https://www.wsj.com/articles/biden-in-shift-prepares-americans-to-see-covid-19-as-part-of-life-11641465004) Americans to accept Covid as part of normal life.

__“House Hunters” IRL…__ Home sales spiked during the pandemic as Americans took advantage of record [low](https://www.marketwatch.com/story/mortgage-rates-drop-to-new-record-low-as-coronavirus-cases-climb-11605802099) mortgage rates and flocked to the ’burbs. Unprecedented demand and low inventory have pushed home prices to all-time [highs](https://www.businesswire.com/news/home/20220113005655/en/Home-Prices-Start-New-Year-at-New-High). This month alone, the median price of a home jumped 16% to $365K. But the Fed is expected to hike interest rates several times this year, which would lead to higher borrowing costs for home buyers. While housing price growth should start cooling, experts predict demand to stay strong.

__Hold the Biscoff cookies...__ Airlines have [canceled](https://thehill.com/policy/transportation/588495-more-than-1700-flights-canceled-in-us-wednesday-almost-20000-since#:~:text=The%20spike%20in%20cancellations%20coincided,been%20canceled%20since%20Christmas%20Eve.) 20K+ flights since Christmas because of Omicron-driven staffing shortages and bad weather. __[Delta](https://robinhood.com/stocks/DAL)__ recently reported a $408M loss for the holiday quarter, when thousands of workers called in sick. But the airline expects to return to profitability after the first quarter of this year, and predicts business travel will bounce back in the spring. We’ll see whether __[United](https://robinhood.com/stocks/UAL)__, which is expected to post a quarterly loss on Thursday, also sees clearer skies ahead. 

__Not so pumped...__ about #PumpAnxiety. Oil prices [jumped](https://www.bls.gov/news.release/pdf/cpi.pdf) 40% last year, prompting Biden to offer an extra $4.5B to help low-income Americans with winter heating costs. Oil prices could hit $125/barrel this year, up from $50 last year. Soaring gas prices have *benefited* __[Schlumberger](https://robinhood.com/stocks/SLB)__, the world’s largest oil-tech biz (think: giant robo drills). Schlumberger posted expectation-beating profits last quarter as customers like __[Chevron](https://robinhood.com/stocks/CVX)__ boosted production to meet demand. Schlumberger, which reports Friday, expects higher spending on its drilling tech as production revs up.

10 canceled flights later [Dmitry Marchenko / EyeEm via Getty Images]

Coming up this week…

- __[Spoiled](https://snacks.robinhood.com/newsletters/6CD1aBMrjtdn6cA4HQjWbS/):__ __[Beyond Meat](https://robinhood.com/stocks/BYND)__ has been the most shorted stock (investors bet against it), as its protein patties lose market share and the plant-based-meat industry shrinks.
- __[Zynger](https://snacks.robinhood.com/newsletters/ttIvZRE8iPSUMYKDtpCyi/articles/7J1KPl6IrvYfOGG3GCcWHr/):__ Grand Theft Auto maker __[Take-Two](https://robinhood.com/stocks/TTWO)__ is set to buy FarmVille parent __[Zynga](https://robinhood.com/stocks/ZNGA)__ for $12.7B in a bet on mobile games. The small screen accounts for more gaming spend than PCs and consoles *combined*.
- __[Coins](https://snacks.robinhood.com/newsletters/4EvkfQv2ddElX8wVmHCO7L/articles/6tfwvsW2bGsbN5buGA10g4/):__ Kim Kardashian and Floyd Mayweather were sued in connection with promoting alt-coin __EthereumMax__ in an alleged scam — which has added fuel to the push for more crypto regulation.

🧸 Charli D’Amelio earns more than S&P 500 CEOs — why the “kidfluencer” economy is raising concerns

[Gotham]

4X more people worldwide speak English as a second language than as a native one

🧸 The “kidfluencer” economy (feat. Charli D’Amelio)

__Private equity, public markets…__ SF-based private-equity firm __[TPG](https://robinhood.com/stocks/TPG)__ [went public](https://www.wsj.com/articles/tpg-rises-in-first-day-of-trading-after-ipo-11642098376) yesterday in this year’s first major initial public offering. PE firms like TPG invest $$ in private companies, just like venture-capital firms. *But they have different parenting styles:* VCs usually invest in startups and let them run things their way (free-range parenting), while PEs invest in or buy mature companies and try to improve them (more like helicopter parents). 

- __TPG owns a stake in 280 companies__ worth $109B, up 81% from five years ago. Fun fact: It bought __[Petco](https://robinhood.com/stocks/WOOF)__ in 2006. 
- __TPG stock jumped 15%__ on its opening day of trading, pushing its market cap to $10B — a good sign for 2022’s IPOs.  

__Show me the acronyms…__ In 2021, assets managed by private equity and venture capital funds grew 10%, on average, and TPG’s jumped 21%. VCs invested $675B+ in startups, double 2020′s previous record. But at the end of the year two-thirds of 2021 IPOs were below their listing prices, which wasn’t great for retail investors. Still, many unicorns are expected to IPO this year as antitrust pressure makes mergers difficult and SPACs fall out of favor. PE-backed __Chobani__ and VC-backed __Reddit__ have already filed IPO paperwork. 

Bell

__Private equity isn’t private anymore…__ Historically, TPG’s cash arsenal came from private investors, who were also the ones to benefit from its growth. But now TPG is public, along with other publicly listed PE powerhouses like $144B __[Blackstone](https://robinhood.com/stocks/BX)__, $61B __[KKR](https://robinhood.com/stocks/KKR)__, and $19B __[Carlyle](https://robinhood.com/stocks/CG)__. __[Berkshire Hathaway](https://robinhood.com/stocks/BRK.B)__ is also basically a publicly traded PE firm (managed by Warren Buffett). Former Tinder owner __[IAC](https://robinhood.com/stocks/IAC)__ operates in a similar way.

TPG shares spike in the first major IPO of the year, as private equity goes public

__Can’t believe it’s not beef…__ __[Beyond Meat](https://robinhood.com/stocks/BYND)__ was one of the hottest IPOs of 2019, as beef-fatigued consumers jumped into the plant-based craze. From 2018 to 2020, sales of plant-based meat [grew](https://impossiblefoods.com/blog/2021-state-of-meat-in-foodservice-report-is-here) 3X as fast as animal meat sales, while Beyond’s sales *quadrupled*. Beyond has beefed up fast-food partnerships to attract fans. This month, it teamed up with chicken legend KFC to [launch](https://www.washingtonpost.com/food/2022/01/13/kfc-beyond-nuggets-plant-based/) Beyond Fried Chicken nuggets.

- __But Beyond shares have tanked 70%__ since its market debut, and now investors are [betting](https://markets.businessinsider.com/news/stocks/beyond-meat-stock-most-shorted-russell-1000-index-jim-chanos-2022-1?amp) money on it falling *even more* (aka: they’re shorting the stock). Blame falling sales…
- __Last quarter, Beyond’s US sales [sank](https://investors.beyondmeat.com/news-releases/news-release-details/beyond-meatr-reports-third-quarter-2021-financial-results) nearly 14%__ as demand for its protein patties cooled and severe weather [damaged](https://www.fool.com/earnings/call-transcripts/2021/11/11/beyond-meat-inc-bynd-q3-2021-earnings-call-transcr/) its primary US production facility. 

__A plant in *meat’s* clothing...__ Climate activism has become a driving force in the meatless movement. But companies like Beyond and rival __Impossible__ have yet to [prove](https://www.nytimes.com/2021/10/15/business/beyond-meat-impossible-emissions.html) they produce fewer emissions than real meat makers. Plus:

- __Plant-based meats cost 30-40% more__ than *real* meat. Over half of Americans who’ve [tried](https://news.gallup.com/poll/282989/four-americans-eaten-plant-based-meats.aspx) plant-based alternatives come from six-figure households.
- __Despite some nutritional advantages__ (like: fewer saturated fats) Beyond Burgers contain 5X as much sodium as a ground-beef patty.

Mid-Veganuary vibes [bymuratdeniz/E+ via Getty Images]

Spoiled

__It’s a double-loss whopper…__ Beyond is [losing](https://apnews.com/article/business-82e90aa25fb0c28215bb652f2e91fd8e) market share *in a shrinking market*. Not only is it losing sales to plant-based competitors — it’s losing out to more meat consumption. Last year the plant-based-meat industry saw 10 straight months of [decline](https://www.ft.com/content/6e97ac14-5ccb-4643-b3d6-c3592b241032). Meanwhile, OG meat giants like __[Tyson](https://robinhood.com/stocks/TSN)__ have launched cheaper plant-based options. Still, the meatless market is beginning to [rebound](https://www.ft.com/content/6e97ac14-5ccb-4643-b3d6-c3592b241032) as New Year’s resolutions and #Veganuary spotlight health.

Beyond Meat becomes the most shorted stock as meatless mania hits a wall

Beyond Meat becomes the most shorted stock as plant-based sales fall

[Smith Collection/Gado via Getty Images] 

Poet and civil-rights activist Maya Angelou has become the first Black woman to be featured on the quarter, in a series of coins honoring pioneering American women

🍔 Beyond’s big short

__Spreading like wildfire...__ The US is seeing [record](https://www.nytimes.com/live/2022/01/10/world/omicron-covid-testing-vaccines) hospitalizations, driven largely by people under age 60, as uber-contagious Omicron spreads. (FYI: Hospitalization totals include people who test positive after being admitted for non-Covid reasons.) Omicron is [half as likely](https://www.nytimes.com/live/2022/01/11/world/omicron-covid-testing-vaccines#california-omicron-hospitalizations) to hospitalize people compared with Delta, but there are way more cases: The US [logged](https://www.reuters.com/business/healthcare-pharmaceuticals/us-reports-least-11-mln-covid-cases-day-shattering-global-record-2022-01-11/) a record 1.35M new infections on Monday, the highest daily total for any country. Omicron accounts for about [98%](https://covid.cdc.gov/covid-data-tracker/#variant-proportions) of cases in America. 

- __[5M+](https://www.wsj.com/articles/omicron-and-the-week-america-is-calling-in-sick-11641571925) US workers could be isolating__ this week, but only a [third](https://apnews.com/article/coronavirus-pandemic-business-lifestyle-health-pandemics-e5fc6251d51e9142f90dfc81f8047ef8) of low-wage workers are getting paid sick leave, leaving many with a financial burden.
- Meanwhile: __[Walgreens](https://robinhood.com/stocks/WBA)__, __[CVS](https://robinhood.com/stocks/CVS)__, __[Amazon](https://robinhood.com/stocks/AMZN)__, __[Walmart](https://robinhood.com/stocks/WMT)__, and __[Delta](https://robinhood.com/stocks/DAL)__ shortened their paid sick leave after the CDC cut its recommended isolation time to 5 days from 10. 

__Called in sick...__ As if supply and labor shortages weren't enough, Omicron is causing mass disruptions in sectors that require IRL work — think: [empty](https://www.cnbc.com/2022/01/11/empty-grocery-shelves-return-as-sick-employees-supply-chain-delays-collide.html) grocery shelves and global manufacturing delays. A fifth of US hospitals [are](https://www.bloomberg.com/news/articles/2022-01-05/one-in-five-u-s-hospitals-face-staffing-shortages-most-in-year?sref=q3KSFp38) severely understaffed, and [a fifth](https://www.bloomberg.com/news/articles/2022-01-06/covid-related-staff-shortages-on-nyc-subway-imperil-city-revival) of NYC subway workers were out sick last week, which caused train delays. It’s hitting businesses too:

- __[Starbucks](https://robinhood.com/stocks/SBUX), [Nike](https://robinhood.com/stocks/NKE), and [Lululemon](https://robinhood.com/stocks/LULU)__ joined __[Macy's](https://robinhood.com/stocks/M)__, Walmart, and __[Apple](https://robinhood.com/stocks/AAPL)__ in [reducing](https://www.businessinsider.com/nike-lululemon-starbucks-reduce-store-hours-omicron-covid-19-spreads-2022-1) store hours or temporarily closing locations. Lulu even lowered its earnings guidance.
- __US airlines__ have canceled more than [28K](https://www.washingtonpost.com/transportation/2022/01/08/airline-flight-delays-cancellations/) flights, and __[United](https://robinhood.com/stocks/UAL)__ is [planning](https://www.usatoday.com/story/travel/airline-news/2022/01/11/united-airlines-employees-covid-ceo/9171254002/) more flight cuts after nearly a [third](https://www.businessinsider.com/united-one-third-newark-staff-called-out-sick-one-day-2022-1) of its Newark staff called in sick on a single day. (Delta could give a status update when it reports today.)

__2022 could be the year Covid is “normalized”...__ World leaders have started positioning the virus as a normal part of life. The UK told the British public that they would have to “learn to live with” Covid, and Spain’s prime minister [suggested](https://www.cnbc.com/2022/01/12/should-we-treat-covid-like-the-flu-europe-is-starting-to-think-so.html) the EU should consider treating it as an endemic illness like the flu. Biden too is [preparing](https://www.wsj.com/articles/biden-in-shift-prepares-americans-to-see-covid-19-as-part-of-life-11641465004) Americans to accept the virus as part of daily life. The upshot: Scientists are seeing signals that Omicron could [peak](https://abcnews.go.com/Health/wireStory/omicron-headed-rapid-drop-us-britain-82206037) soon in the US.

The national Omicron “sick-out” wreaks havoc across the US, from stores to subways

__Keeping up with crypto...__ Kim Kardashian, Floyd Mayweather, and other celebs are being sued over promoting alt-coin __EthereumMax__ as part of an alleged crypto scam. The mysterious coin debuted in May claiming to “bridge the gap [between](https://coinmarketcap.com/currencies/ethereummax/) community-driven tokens” and legacy crypto — but provided few details.

- __Problem #1:__ EthereumMax’s misleading name. It has *nothing* to do with __[Ether](https://robinhood.com/crypto/ETH)__, the second-largest cryptocurrency after __[Bitcoin](https://robinhood.com/crypto/BTC)__.
- __Problem #2:__ EthereumMax has crashed 98% since June, which has led to allegations it’s a “pump and dump” scheme. Think: Insiders selling everything after hyping the coin. 
- __Problem #3:__ Misleading #ad-vertising. Kim disclosed to her 250M+ Insta followers that EMax was a paid promo (FYI: she [*had*](https://sidewalkerdaily.com/instagram-sponsorship/) to) but didn't discuss risks. Mayweather even accepted EMax as payment for his high-profile fight with Logan Paul.

__Crypto’s Wild West…__ is under scrutiny. While micro-influencers increasingly promote new cryptos, celebs like Kim K have unprecedented reach. As FOMO-driven investors try to score on the $3T crypto [market](https://www.cnbc.com/2021/11/08/crypto-news-ether-hit-an-all-time-high-nftnyc-infrastructure-bill.html#:~:text=2%2C%202021.&text=The%20cryptocurrency%20market%20is%20now%20worth%20over%20%243%20trillion%2C%20according,and%20bitcoin%2C%20rally%20on%20Monday.), a growing number of fraudsters are taking advantage. Last year, crypto crimes hit a record [$14B](https://www.moneycontrol.com/news/business/cryptocurrency-based-crimes-pegged-at-14-billion-in-2021-report-7920261.html), and scammers lured investors with trend-based coins (see: [Squid Coin](https://snacks.robinhood.com/newsletters/6tLuNcjhXyEBeNkwvMiSsY/articles/35hA5ZwBVksopzvcj3xqCK/)). 

- Regulators have warned against crypto-market manipulation for years. But crypto markets and exchanges lack the controls and fraud protections of the stock market. 
- US regulators are calling for coin issuers to be [held](https://www.nytimes.com/2021/11/01/business/stablecoins-cryptocurrency-regulation.html) accountable. SEC Chair Gary Gensler wants crypto to be regulated in the same way the SEC oversees stocks and bonds. 

“Now let’s talk crypto” [Moment via Getty Images]

Coins

__Crypto scams are bad for crypto…__ While some argue that crypto is in the late-adoption phase, celebrity endorsements open the door to millions of *new* investors who might not have enough information to tell which coins are legit. About 100 new coins are [created](https://www.nytimes.com/2021/08/05/business/hype-coins-cryptocurrency.html#:~:text=About%20100%20are%20created%20each,more%20than%20just%20investor%20bros.) *every day*. Scams are further motivating regulators and investors in favor of more transparency and safeguards around crypto.

*Correction: In the Snacks newsletter published on Thursday, January 13, we misstated who Floyd Mayweather fought in his high-profile boxing match. It was Logan Paul, not Jake Paul. We’ve updated the online version of the newsletter, and we regret the error.*

Kim’s K crypto crisis: Influencer-driven coin promos add fuel to the push for regulation

The Great “Sick-Out,” Kim K’s crypto crisis, and more of today’s top Snacks stories

Charli D’Amelio, TikTok’s most-followed star, was the app’s highest earner last year, taking home a reported $17.5M