__New season dropped...__ We're not talking “Ozark.” Investors have had eagle eyes this earnings season on how corporates are managing a unique economic hot mess (inflation, war, China's Covid crackdown). What we've learned so far:

- __High-growth sectors__ like tech, which thrived mid-rebound, have hit a wall as sales slow, and they’re tightening their belts to prep for more pain. Ditto other "cyclicals" (think: banks, construction), which typically do well when the economy thrives. 
- __"Non-cyclicals"__ — which tend to hold steady regardless of how the economy is doing (think: consumer staples, utilities) — outperformed.
- __In context:__ The World Bank [slashed](https://www.worldbank.org/en/news/speech/2022/04/18/spring-meetings-2022-media-roundtable-opening-remarks-by-world-bank-group-president-david-malpass?cid=ECR_TT_worldbank_EN_EXT) its forecast for global economic growth, US GDP shrank last quarter, and some analysts [warn](https://www.cnn.com/2022/04/26/economy/inflation-recession-economy-deutsche-bank/index.html) a recession’s coming.

__Change is the only constant...__ A year ago, the "Big Tech 5" [demolished](https://snacks.robinhood.com/newsletters/4yfojyZE9WLvdIySo7B6GF/articles/5HHwtkiQ6PZUclm1Kohn61/) earnings with jaw-dropping records. The economy was in full rebound mode and cyclicals were raking it in. Now:

- __Tech:__ __[Amazon](https://robinhood.com/stocks/AMZN)__ had its slowest sales growth since the dot-com bust (the late ’90s), while __[Meta](https://robinhood.com/stocks/FB)__ posted its slowest growth since going public in 2012. __[Google’s](https://robinhood.com/stocks/GOOGL)__ biz is also slowing, while __[Netflix](https://robinhood.com/stocks/NFLX)__ expects to lose millions more subscribers. __[Apple](https://robinhood.com/stocks/AAPL)__ was strong but said chip shortages would [keep](https://www.usatoday.com/story/tech/2022/04/28/apple-earnings-strong-quarter-supply-shortages-covid/9577932002/) slowing its growth. The outlier: __[Microsoft](https://robinhood.com/stocks/MSFT)__ [beat](https://www.cnbc.com/2022/04/26/microsoft-msft-earnings-q3-2022.html) across the board. 
- __Banks:__ From __[Citi](https://robinhood.com/stocks/C)__ to __[Chase](https://robinhood.com/stocks/JPM)__ to __[Goldman](https://robinhood.com/stocks/GS)__, America’s largest banks [reported](https://www.wsj.com/articles/bank-of-americas-quarterly-profit-falls-12-11650280110) double-digit earnings declines as trading and dealmaking slowed.

__Versus…__

- __Staples:__ __[Pepsi](https://robinhood.com/stocks/PEP)__, __[Kraft](https://robinhood.com/stocks/KHC)__, and Oreo maker __[Mondelez](https://robinhood.com/stocks/MDLZ)__ saw strong growth. __[Coke's](https://robinhood.com/stocks/KO)__ sales tripled from last year. __[Procter & Gamble](https://robinhood.com/stocks/PG)__ (Gillette, Tide, Charmin) notched its biggest sales gain in decades.
- __Oil:__ __[Chevron's](https://robinhood.com/stocks/CVX)__ quarterly profit [quadrupled](https://www.cnbc.com/2022/04/29/chevron-cvx-earnings-q1-2022.html) thanks to higher energy prices, while Exxon's nearly [doubled](https://www.cnbc.com/2022/04/29/exxon-xom-earnings-q1-2022.html) despite a big hit from Russia.
- __Pharma:__ __[Merck](https://robinhood.com/stocks/MRK)__ and __[AstraZeneca](https://robinhood.com/stocks/AZN)__ beat expectations as demand [spiked](https://www.cnbc.com/2022/04/28/merck-mrk-earnings-q1-2022.html) for Covid treatments and other key drugs.

The pantry-staple defensive wall (George Frey/Getty Images)

D-Fence

__The market’s getting defensive…__ It used to be “growth at all costs” — now it’s “steady earnings and cut costs.” Amazon, Meta, and Netflix plan to slow investments and be more financially disciplined. Companies and investors are getting used to the “new not normal” environment: persistently high inflation and supply shocks. While the techy Nasdaq just had its worst month since 2008, the pile-on into defensive stocks could continue.

From Amazon to Coke, earnings season underscores a shift to defense as econ gloom grows

__Face-palm…__ Palm oil, which is in [half](https://www.cnn.com/2022/04/26/business/palm-oil-indonesia-export-ban-explainer-intl-hnk/index.html) of your groceries, is about to get pricier. Indonesia, the world’s largest palm-oil producer, [banned](https://www.wsj.com/articles/indonesia-worlds-largest-palm-oil-producer-bans-exports-of-ubiquitous-commodity-11651083436) exports to keep prices in check for local consumers. That’s bad news for __[Hormel](https://robinhood.com/stocks/HRL)__, __[Colgate-Palmolive](https://robinhood.com/stocks/CL)__, and __[Yum! Brands](https://robinhood.com/stocks/YUM)__, who [use](https://www.ourendangeredworld.com/eco/brands-that-use-palm-oil/) palm oil in Skippy peanut butter, toothpaste, and even KFC chicken. Global food supplies were already [strained](https://snacks.robinhood.com/newsletters/4JijOnsDJhfhUOYkjUiBGY/articles/e5pxDFjMCbFJBprP7R7Tq/) by Russia’s war on Ukraine and historic droughts. Now Indonesia’s ban could send record food prices *higher* — especially in poorer countries that depend on palm oil for cooking.

__Don’t forget to call Mom…__ Sunday’s Mother’s Day. For America’s 30M+ working moms, the past two years have been disproportionately hard. Mothers have been more [likely](https://www.census.gov/library/stories/2021/03/moms-work-and-the-pandemic.html) to work in service jobs heavily affected by pandemic closures, and they’ve been [3X](https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2020/09/28/mothers-are-3-times-more-likely-than-fathers-to-have-lost-jobs-in-pandemic) as likely as fathers to lose their jobs early on during lockdowns. Nearly [2M](https://www.shrm.org/resourcesandtools/hr-topics/behavioral-competencies/global-and-cultural-effectiveness/pages/over-1-million-fewer-women-in-labor-force.aspx) women still haven’t returned to the labor force, and economists [aren’t](https://apnews.com/article/coronavirus-pandemic-business-lifestyle-health-careers-075d3b0ab89baffc5e2b9a80e11dcf34) sure how many of them ever will. Those who do face a “[motherhood penalty](https://gap.hks.harvard.edu/getting-job-there-motherhood-penalty)” — a pay gap between moms and non-moms that can be wider than the pay gap between men and women. 


Zoom Out

Stories we’re watching...

__Big pharma’s vaccine ceiling…__ A year ago, the US was in the thick of the biggest vaccination campaign in history. Now, about two-thirds of the population is fully vaccinated, and Dr. Fauci says we’re “out of the pandemic phase.” __[Pfizer](https://robinhood.com/stocks/PFE)__ and __[Moderna](https://robinhood.com/stocks/MRNA)__, now household names, are looking for their next profit puppies. Pfizer, with a diverse drug portfolio and pipeline, is expecting a $22B boost this year from its Covid antiviral pill, while Moderna is trying to be the first to bring its vax to little kids. We’ll get a checkup on the vax makers’ next bets when both report this week.

__Grab a mint julep and your lucky hat…__ because the Kentucky Derby’s this weekend, and it’s gonna be *packed*. __[Churchill Downs](https://robinhood.com/stocks/CHDN)__, the $8B (valuation) casino biz that runs the iconic horse race, is entering its big weekend feeling lucky: last week it [reported](https://ir.churchilldownsincorporated.com/news-releases/news-release-details/churchill-downs-incorporated-reports-2022-first-quarter-results) record sales and profits for last quarter. Churchill grew its online gambling biz during the pandemic, when IRL betting was restricted. Now that gamblers are returning to the track, business is booming. Churchill expects to post record Derby revenue this weekend as possibly 3X as many fans attend compared with last year.

Events

Coming up this week...

- __[iConomy](https://snacks.robinhood.com/newsletters/5iXUibAOQoANRr4JnCr1fN/articles/6ZkAZWVU7udnOwo6SwBJKs/):__ __[Apple’s](https://robinhood.com/stocks/AAPL)__ coming off one of its best quarters ever. While supply issues and growth slumps have hurt fellow tech stocks, the Fruit’s been resilient thanks to 5G upgrades and its connected ecosystem of tech and software. 
- __[Contour](https://snacks.robinhood.com/newsletters/5gDfd4oVeIG4SmHI1Vv6Hk/articles/7uygAjOzxBmFflBYmeZsqh/):__ Viral D2C makeup brand __Oddity__ debuted a blockchain-based token that converts into company stock if/when it IPOs. Tokens could be a bridge between the new world of digital assets and OG markets.
- __[Thread](https://snacks.robinhood.com/newsletters/1zpLKuQGHlxnAe3BYLQXii/articles/2igH2dzMBSwHyPrxwOz4J6/):__ Three weeks and $44B after Elon Musk started poking around __[Twitter](https://robinhood.com/stocks/TWTR)__, he’s on the verge of owning the world’s most influential platform. High priority: making the bird app a bastion of free speech.

ICYMI

Last week's highlights...

Dow Jones

S&P 500

Nasdaq

Bitcoin

In the 1800s, ketchup was sold as a cure for indigestion

🛡️ Earnings get defensive

__Isaac Newton would be stumped…__ This __[Apple](https://robinhood.com/stocks/AAPL)__ just doesn’t seem to fall. Yesterday the world’s most valuable company said sales [jumped](https://www.wsj.com/articles/apple-aapl-q2-earnings-report-2022-11651115203?mod=hp_lead_pos2) more than expected last quarter — to $97B — despite ongoing supply issues, the war in Ukraine, and booming inflation. All told, it was Apple’s third-best quarter of *all time*. The details:

- __Booming sales:__ Sales of iPhones, Macs, and other hardware like AirPods all [rose](https://www.cnbc.com/2022/04/28/apple-aapl-earnings-q2-2022.html) more than expected. Sales grew fastest in the services division (think: App Store, iCloud). 
- __Soaring buybacks:__ Apple’s board authorized $90B in stock buybacks, even more than last year. Analysts typically see buybacks as a sign of confidence.

__The post-pandemic slump…__ still hasn’t hit Apple. Apple’s stock is still up more than double since the pandemic began, while fellow stay-at-home surgers Meta, __[Zoom](https://robinhood.com/stocks/ZM)__, __[Peloton](https://robinhood.com/stocks/PTON)__, and __[Netflix](https://robinhood.com/stocks/NFLX)__ have fallen to pre-pandemic levels. But some analysts worried that China’s latest lockdowns would finally put a damper on Apple’s results: 

- __The cause for concern:__ China is critical to Apple’s business: an estimated 20% of iProducts are sold in China and 85% are built there. 
- __Saved by a flexible supply chain:__ Apple’s recent sales didn’t fall. Part of the reason: the Fruit shifted production resources between products to prevent shortages (basically: making more iPhones than iPads when they ran low). 

Can’t stop, won’t stop — selling iPhones (Win McNamee/Getty Images)

Fruit

__Apple isn’t just a company…__ it’s an iConomy. Apple’s worth nearly $3T (or about 2% of the world’s GDP), making it an indicator for the entire global economy. The combo of steady iDemand and Apple’s flexible supply chain offers investors hope that consumers may keep spending despite soaring prices and other economic headwinds.

Apple had one of its best quarters ever, offering hope for the rest of the global economy

__Carvana’s car-vending machine…__ is running out of quarters as the lure of cash-burning used-car companies wears off. Yesterday, private-equity giant __[Apollo](https://robinhood.com/stocks/APO)__ reportedly agreed to buy $1.6B of __[Carvana’s](https://robinhood.com/stocks/CVNA)__ corporate debt (think: investors lend Carvana $$ through bonds, and then get paid with interest). Apollo’s coming to the rescue after Carvana struggled to raise money for an acquisition amid slowing demand for its refurbished cars sold online. 

- __Last quarter:__ Carvana posted its first sales [decline](https://www.wsj.com/articles/carvana-has-big-loss-on-first-sales-decline-11650490974?mod=business_minor_pos15) since going public in 2017 — and it’s expected to lose $800M this year. 
- __Slashing tires:__ In response to supply backlogs and labor shortages, Carvana hiked its car prices and trimmed back on inventory for online shoppers. 

__Your 2018 [Honda](https://robinhood.com/stocks/HMC) Civic…__ is worth more than you think. Used-car sales hit [record](https://www.kbb.com/car-news/despite-soaring-prices-americans-bought-record-number-of-used-cars-in-2021/#:~:text=Americans%20bought%20an%20unprecedented%2040.9,Book%20parent%20company%20Cox%20Automotive.) highs during the pandemic as supply shortages made new wheels hard to come by. Some models were even [selling](https://www.iseecars.com/used-cars-cost-more-than-new-study) for 20% more than their new editions. Carvana made it easy for shoppers to buy online and have their cars delivered, without hassling with a dealership. But as car shopping has become more like house hunting (see: low inventory, high prices), it’s hurting demand — and not just for Carvana: 

- __Rival [Vroom](https://robinhood.com/stocks/VRM) has lost 90%__ of its post-IPO [gains](https://snacks.robinhood.com/newsletters/3zyhoJMmhQdMulq2nhX3S/articles/2ZwTltHV7B5JI4zVAcLeoe/), while used-car OG __[CarMax](https://robinhood.com/stocks/KMX)__ says [shaky](https://www.bloomberg.com/news/articles/2022-04-12/carmax-says-used-car-sales-hit-by-waning-consumer-confidence) consumer confidence is keeping buyers away.

Skid

__The pandemic thriver model is broken…__ and private equity wants to be the glue to fix it. From __[Airbnb](https://robinhood.com/stocks/ABNB)__ to __[Carnival](https://robinhood.com/stocks/CCL)__, PE firms have thrown lifelines to numerous companies needing quick cash to combat pandemic-fueled losses. In turn, firms like Apollo guarantee dividends for investors and a big payout down the road. It’s worked before: Apollo's fund jumped 10% after __[Hertz](https://robinhood.com/stocks/HTZ)__ paid [back](https://www.bloomberg.com/news/articles/2022-01-14/apollo-credit-fund-notches-double-digit-gain-for-2021-on-hertz) part of a $1.5B loan less than a year after getting it. 

Carvana gets help from private equity as the used-car biz stalls out

Apple dodges supply headaches to post one of its best quarters ever

Last quarter Apple made an average of $13K every second of each business day

🍎 Apple’s still sellin’

__Oh, Zuck...__ Even legless metaverse [avatars](https://www.gizmodo.com.au/2021/12/facebook-takes-a-first-step-toward-making-the-metaverse-a-real-thing/) can't distract from this reality: __[Meta](https://robinhood.com/stocks/FB)__ [posted](https://www.wsj.com/articles/meta-platforms-facebook-fb-q1-earnings-report-2022-11651022191?mod=business_lead_pos3) its slowest quarterly revenue growth since going public as Facebook in 2012. In the *previous* quarter, Meta [reported](https://snacks.robinhood.com/newsletters/6As9U5PUBzvDKmuDeCPCxK/articles/2KGgx4q5eCK1xFQBgb2QMp/) a $1B profit hit and its first-ever dip in daily users (cue: __TikTok__ smirk). The latest: users actually ticked up last quarter, but financials… weren’t great.

- __Top line:__ Sales growth majorly slowed to 7%, from 20% in the previous quarter. Meta has blamed Apple’s iOS privacy update for sagging ad sales (ads = nearly all its revenue).
- __Bottom line:__ Profit fell for the second quarter in a row, down to $7.5B, from $9.5B a year earlier. Meta has spent $10B on its meta-ambitions, and it's eating into earnings.
- __Wall Street's line:__ “Could’ve been worse.” Meta stock popped 16% after it reported, as investors were surprised by better-than-expected profit. 
- __Plot line:__ As of yesterday’s close, Meta stock had lost nearly half its value this year. Compare that to the Nasdaq, which has lost one-fifth (also… not great).

__FAANG may be losing its teeth...__ Meta isn't the only Big Techie with slacking growth. Last week __[Netflix](https://robinhood.com/stocks/NFLX)__ [tanked](https://snacks.robinhood.com/newsletters/1hJKveGEOmvpzuLtfVejiF/articles/43M2Oild3MGMPYMecA8Q7K/) on news that it lost 200K subscribers last quarter — and expects to lose millions more. On Monday, __[Google](https://robinhood.com/stocks/GOOGL)__ [reported](https://www.theverge.com/2022/4/26/23043402/google-alphabet-youtube-q1-2022-earnings) slowing sales growth and profits. Investors also ghosted __[Snap](https://robinhood.com/stocks/SNAP)__, which [disappointed](https://www.cnbc.com/2022/04/21/snap-earnings-q1-2022.html) on earnings as ads faced pressure.

All eyes on Big Tech (Justin Tallis/AFP via Getty Images)

Fangs

__Revenue diversity is winning...__ Between Covid, inflation, and war, the economic situation is too fragile to rely on one $$ stream (think: Meta with ads). Even Netflix has [cracked](https://snacks.robinhood.com/newsletters/1hJKveGEOmvpzuLtfVejiF/articles/43M2Oild3MGMPYMecA8Q7K/) the door open to ads, after years of renouncing them. Microsoft crushed earnings thanks to [strong demand](https://www.wsj.com/articles/microsoft-msft-q3-earnings-report-2022-11650941899?mod=article_inline) not only for its software but also for its cloud and cybersecurity services (yep, it has a [$15B](https://www.cnbc.com/2022/04/26/microsoft-15-billion-security-unit-gives-investors-reason-for-hope.html) cyber biz). And even though Google ads slowed, [growth](https://www.theverge.com/2022/4/26/23043402/google-alphabet-youtube-q1-2022-earnings) in cloud, hardware, and services saved the day.

Meta’s sales grew at the slowest pace since its IPO, as Big Techies hit a wall

__Splurging on a new Tulum fit…__ or three. Credit-card companies are racking up profits as you go on a pre-summer swipe spree. Last quarter, __[Visa’s](https://robinhood.com/stocks/V)__ sales [jumped](https://s1.q4cdn.com/050606653/files/doc_financials/2022/q2/Q2-2022-Earnings-Release-_FINAL.pdf) 25%, from a 2% decline a year ago. Now it [expects](https://www.fool.com/investing/2022/04/27/why-visa-and-mastercard-are-rising-today/) to top pre-pandemic levels this year. FYI: Visa makes up over half of the US payments market. 

- __Jett(spend)ing:__ Visa's cross-border volume — aka the number of transactions outside the US — made up [nearly](https://s1.q4cdn.com/050606653/files/doc_financials/2022/q2/Q2-2022-Earnings-Release-_FINAL.pdf) half of revenue as international biz and leisure travel picked up.
- __Visa’s CEO says pent-up__ demand for summer bookings is “very high” and cross-border travel spend, including Europe, is already above 2019 levels. 

__Dusting off the passport…__ As most pandemic-era restrictions have now been lifted, consumers are making up for lost time when it comes to travel. More than 80% of Americans [will](https://news.yahoo.com/americans-plan-to-travel-more-and-often-151304546-151902867.html) take at least one trip with family and friends this year, and at least half plan to spend more than before the pandemic. For tourists visiting the US, Visa execs say there’s “plenty of recovery” to come.

- __Big balances:__ Last quarter, rival __[Amex](https://robinhood.com/stocks/AXP)__ [saw](https://www.reuters.com/business/finance/amex-profit-tops-estimates-strong-travel-entertainment-spending-2022-04-22/) a 121% rebound in entertainment and travel spend, while __[Capital One](https://robinhood.com/stocks/COF)__ got more [swipes](https://www.fool.com/earnings/call-transcripts/2022/04/26/capital-one-financial-cof-q1-2022-earnings-call-tr/) in its “heavy spender” category.
- __Swipe-off:__ __[Mastercard](https://robinhood.com/stocks/MA)__, which has a similar biz to Visa, is also expected to score a travel-related sales surge when it reports earnings today.

Plastic

__Consumer spending is in a U-turn…__ People aren’t spending less — they’re spending differently. Think: moving dollars from __[DoorDash](https://robinhood.com/stocks/DASH)__ and Netflix and into restaurants and delayed vacays. But it’s TBD how long the spree can last: concerns are [rising](https://www.cnbc.com/2022/04/26/us-bonds-treasury-yields-dip-as-economic-slowdown-fears-mount.html) that the global economy might be in for a significant slowdown that could hit consumers just as they’re venturing back into their pre-Covid routines.

Visa sales soar as consumers ignore inflation and keep swiping on summer travel

Meta’s sales grew at the slowest pace since its IPO, as Big Tech hits a wall

Thomas Jefferson and John Adams died on the same (symbolic) day: July 4, 1826

🧱 Big tech hits a wall

__Crypto primer...__ the moisturizing kind. __Oddity__ is the tech-focused parent company of [TikTok-approved](https://www.tiktok.com/@ilmakiage) makeup brand Il Makiage. Think: AR shade-matching and algorithmic foundation quizzes. Its employees are [mostly](https://news.yahoo.com/il-makiage-parent-company-oddity-050134136.html) data engineers with zero background in beauty. Now Oddity has become one of the first non-crypto companies to tie a blockchain-based security directly to its equity ownership. Let’s de-jargon that:

- __Oddity tokens:__ The viral D2C makeup company [launched](https://www.wsj.com/articles/beauty-company-oddity-to-offer-crypto-token-tied-to-ipo-11650934255?mod=markets_lead_pos6) a digital “security token” that runs on the ethereum blockchain. The tokens are digital contracts that can be tied to assets like stocks, commodities, and real estate. 
- __Investors could get:__ The token will convert into regular shares when/if Oddity goes public, at a 20% discount to the IPO price. But it *won’t* be tradeable until an IPO. 
- __Oddity gets:__ Fresh cash from “accredited investors,” not just VCs. Accredited = $200K+/year or $1M net worth.
- Oddity was valued at $1.5B after raising $130M in January, and is rumored to be prepping its public debut.

__Ethereal blush…__ on __[ethereum](https://robinhood.com/crypto/ETH)__ blockchain. Oddity’s token will be issued through an SEC-registered blockchain platform called Securitize, which has been developing the (still tiny) market for security tokens. Oddity says its token is a “[trailblazing](https://www.beautypackaging.com/contents/view_breaking-news/2022-04-26/oddity-launches-digital-token-and-aims-to-democratize-investing/)” financial innovation. It might be onto something:

- __Security tokens__ could unlock an opportunity for more people to invest pre-IPO, changing the way private companies fundraise.

Cateye goes crypto (Ilya S. Savenok/Getty Images)

Contour

__Security tokens could also be a gateway…__ to wider crypto acceptance. Unlike the stock market, the “[Wild West](https://www.wsj.com/articles/sec-will-police-cryptocurrencies-to-maximum-possible-extent-chair-gary-gensler-says-11628007567?mod=hp_lead_pos6)” of crypto is still largely unregulated. Security tokens could be a bridge between the new world of digital assets and the old world of traditional markets. They’re created and traded on digital platforms, like cryptocurrencies. But they’re offered as regulated assets, like stocks and bonds. That could help set a standard for crypto regulation.

Techy makeup company Oddity links a digital token to its IPO, tying crypto to regulated markets

__Zelle-ing into the void…__ America’s biggest money-transfer app (hint: not __Venmo__) is in the hot seat. When payment apps like __Zelle__, Venmo, and __Cash App__ [boomed](https://fortune.com/2020/05/20/venmo-paypal-cash-app-use-coronavirus-pandemic-mobile-payments/) during the pandemic — as people ditched germy ATMs — scammers paid attention: 18M people in the US [reportedly](https://www.nytimes.com/2022/03/06/business/payments-fraud-zelle-banks.html) got swindled on payment apps in 2020 alone. Now lawmakers are [accusing](https://www.nytimes.com/2022/04/26/business/zelle-fraud.html) Zelle of not taking responsibility in cases of fraud — just as the app considers expanding into retail payments. The details: 

- __What the Zelle:__ This week US senators [accused](https://www.nytimes.com/2022/04/26/business/zelle-fraud.html) __Early Warning Services__ (EWS), the company that owns Zelle, of leaving users exposed to scams. 
- __How the scams work:__ NYT [reported](https://www.nytimes.com/2022/03/06/business/payments-fraud-zelle-banks.html) that thieves accessed accounts by impersonating banks, and used Zelle to siphon cash. EWS reportedly doesn’t often reimburse customers because the customers *technically* do authorize the transfers. 

__Late to the payments party…__ but showing up with a bang. EWS is owned by __[Bank of America](https://robinhood.com/stocks/BAC)__, __[Capital One](https://robinhood.com/stocks/COF)__, __[Chase](https://robinhood.com/stocks/JPM)__, __PNC__, __[Truist](https://robinhood.com/stocks/TFC)__, __[US Bank](https://robinhood.com/stocks/USB)__, and __[Wells Fargo](https://robinhood.com/stocks/WFC)__. The banks launched Zelle in 2017 to compete with __[PayPal](https://robinhood.com/stocks/PYPL)__-owned Venmo and other fintech rivals. Zelle has grown quickly because — unlike Venmo — it doesn’t charge instant-transfer fees and is auto-included in many bank accounts.

- __Caught up:__ Last year Americans sent $490B with Zelle — and just $230B with runner-up Venmo.
- __Still growing:__ WSJ [reported](https://www.wsj.com/articles/banks-weigh-using-zelle-to-challenge-visa-mastercard-11649246400) earlier this month that some banks want Zelle to compete directly with __[Visa](https://robinhood.com/stocks/V)__ and __[Mastercard](https://robinhood.com/stocks/MA)__ by getting into point-of-sale payments.

__Moving money is making money…__ and banks don’t want to miss out. Ten fintech startups have scored $10B+ valuations in recent years by streamlining money movement for the digital era. But the big banks stayed competitive by joining forces to undercut payment apps like Venmo with fee-free Zelle. Now they may use that same fee-cutting strategy to take on credit-card giants — if Congress doesn’t punish them first over the fraud reports.

Zelle users say they’re being scammed — and Congress is taking notice just as the payment app looks to expand

Makeup company Oddity links a digital token to its IPO, tying crypto to regulated markets

TikTok was — once again — the world’s most downloaded app last quarter

💄 Makeup IPO, blockchain-style

__He really did it…__ Elon [bought](https://www.nytimes.com/live/2022/04/25/business/elon-musk-twitter) Twitter. Yesterday Twitter agreed to sell itself to Elon Musk for $44B after weeks of intrigue. A recap: three long weeks ago Elon outed himself as Twitter’s biggest shareholder and (briefly) joined its board. Then he tried to take over, prompting the board to use a [poison pill](https://snacks.robinhood.com/newsletters/6SU09oBawHBluL6GDg7VT8/) to try to stop him. It didn’t work…

- __Money talks:__ Elon’s offer was 38% higher than Twitter’s pre-Musk value. So once Elon got $13B from __[Morgan Stanley](https://robinhood.com/stocks/MS)__ and other banks, $12.5B from loans against __[Tesla](https://robinhood.com/stocks/TSLA)__ stock, and put up the rest in cash, the board changed its tune. 
- __It’s a pricey purchase,__ even for the world’s richest guy. Elon’s $21B personal investment is one-fifth of his net worth.
- __The deal,__ unanimously approved by Twitter’s board, is expected to close this year, pending regulatory approval.

__The internet’s town square…__ is about to get Elon-ified. After loudly criticizing Twitter for suppressing free speech, he has hinted at making changes to the platform:

- __Fewer ads:__ Elon [wants](https://www.wsj.com/articles/twitter-and-elon-musk-strike-deal-for-takeover-11650912837) to reduce Twitter’s reliance on ads, which make up 90% of revenue, by prioritizing subscriptions. 
- __Less moderation:__ He wants to change current moderation policies to promote free speech, which could frustrate advertisers. 
- __Clearer algos:__ Elon plans to open-source Twitter’s algorithm to show users how posts reach their timelines and reduce bots.


The bird app’s going private (Nikolas Kokovlis/NurPhoto via Getty Images)

Chirp

__The Technoking is a famously hands-on tycoon…__ He’s less interested in reputation and more interested in influence. Twitter doesn’t have __TikTok’s__ user base or __[The New York Times’](https://robinhood.com/stocks/NYT)__ cachet, but it has outsized influence because it's used by everyone from US presidents to Kim K. So while some billionaires pay for prestige (see: Jeff Bezos buying __The Washington Post__), Elon pays for primacy: he wants to be at the center of the issues that interest him. First it was accelerating the green transition with Tesla, then colonizing other planets with __SpaceX__, then “solving” traffic with __The Boring Company__ — and now “saving” free speech with Twitter.

Elon’s buying Twitter for $44B, and now the world’s richest man will own the world’s most influential platform

__Have a Coke and a smile…__ __[Coca-Cola](https://robinhood.com/stocks/KO)__ sales have taken off as more people sip on Gatorades and super-sized movie-theater Sprites. Coke’s [stock](https://robinhood.com/stocks/KO) hit an all-time high yesterday after smashing Wall Street's earnings expectations, posting growth in every category:

- __Soda-licious sales:__ Coke notched a 16% jump in revenue (up [3X](https://www.coca-colacompany.com/press-releases/coca-cola-reports-first-quarter-2021-results) since last year), thanks to strong demand for everything from tea to its signature soda line. 
- __Bubbling over:__ Blaming higher ingredient and packaging costs, Coke hiked prices by [nearly](https://finance.yahoo.com/news/coca-cola-jacks-up-prices-on-shoppers-reports-big-quarter-115645732.html) 10% — but kept its upbeat annual forecast (translation: it expects consumers to keep paying).

__High-fructose frenzy…__ Between inflation, rising interest [rates](https://snacks.robinhood.com/newsletters/2xWxnsCtcEtYcv012Yelqy/articles/5RKIqhn4ILH2LzzUNrtBTn/), and the war in Ukraine, investors have had a tough time finding stable profits in the market. But pantry powerhouses like Coke have weathered the recent volatility as consumers keep splurging on brands they can’t live without.

- __Pampers or bust:__ Last week Gillette and Tide parent __[P&G](https://robinhood.com/stocks/PG)__ [notched](https://www.wsj.com/articles/procter-gamble-posts-its-biggest-sales-gain-in-decades-11650452394) its biggest sales gain in decades, with its most expensive products seeing the highest demand.
- __Sugar high:__ Shares of Coke, __[Pepsi](https://robinhood.com/stocks/PEP)__, and Cheerios maker __[General Mills](https://robinhood.com/stocks/GIS)__ are all up about 20% in the past year, while the [S&P](https://www.google.com/search?q=s%26p+500+chart&rlz=1C5GCEM_enUS969US969&ei=XBlnYuz_EL-HptQPuYeWqA4&ved=0ahUKEwjsneHVmrD3AhW_g4kEHbmDBeUQ4dUDCA4&uact=5&oq=s%26p+500+chart&gs_lcp=Cgdnd3Mtd2l6EAMyDwgAELEDEIMBEEMQRhD6ATILCAAQsQMQgwEQkQIyCAgAELEDEJECMgUIABCRAjIFCAAQgAQyBQgAEIAEMgUIABCABDIFCAAQgAQyBQgAEIAEMgUIABCABDoLCAAQgAQQsQMQgwE6DgguEIAEELEDEMcBENEDOggILhCxAxCDAToLCC4QgAQQxwEQowI6CAgAEIAEELEDOgUILhCABDoRCC4QgAQQsQMQgwEQxwEQ0QM6BAgAEEM6CggAELEDEIMBEEM6CQgAEEMQRhD6AUoECEEYAEoECEYYAFAAWP4LYPwOaABwAXgAgAF6iAHuB5IBBDExLjKYAQCgAQHAAQE&sclient=gws-wiz) has gained only 3% and the [Nasdaq](https://www.google.com/search?q=nasdaq+chart&rlz=1C5GCEM_enUS969US969&ei=ZxlnYomRJPvJptQP4LSguAM&ved=0ahUKEwjJ4JPbmrD3AhX7pIkEHWAaCDcQ4dUDCA4&uact=5&oq=nasdaq+chart&gs_lcp=Cgdnd3Mtd2l6EAMyEAgAELEDEIMBEJECEEYQ-gEyBQgAEJECMgUIABCRAjIFCAAQkQIyCwgAELEDEIMBEJECMgYIABAHEB4yBQgAEIAEMgYIABAHEB4yBggAEAcQHjIGCAAQBxAeOggIABAHEAoQHjoECAAQDToLCAAQBxAeEEYQ-gFKBAhBGABKBAhGGABQAFjoBmDSB2gAcAF4AIABYogB5wOSAQE3mAEAoAEBwAEB&sclient=gws-wiz) is down 8%.

__Consumer staples are the port in an economic storm…__ along with other [non-cyclical stocks](https://learn.robinhood.com/articles/6SSoCuDTYUitHFQrcPb8Yp/what-is-a-cyclical-stock/) — aka companies selling [essential](https://www.investopedia.com/investing/consumer-defensive-stocks/) goods and services (think: groceries, gas). When the economy is booming, non-cyclicals tend to be less popular than their high-growth cyclical peers (like: tech, travel, and cars). But when growth slows, investors gravitate toward necessity-driven non-cyclicals since sales and earnings tend to remain stable regardless of the broader economic conditions.

In this rough market, investors are turning to pantry powerhouses like Coca-Cola to find stability

Elon’s buying Twitter for $44B, and taking charge of the world’s most influential platform

Texas generates nearly double the wind power of any other US state

🐦 Elon’s new nest

__Stark contrast...__ While Americans fly to spring vacays (legally) unmasked, 26M people in Shanghai are under strict Covid lockdown, policed by [robot dogs](https://www.ft.com/content/5c437146-2d18-466b-84af-24a47b32de59) and drones. China's largest city has been on a monthlong freeze as the government enforces its zero-Covid policy. Last week Shanghai [reported](https://www.cnn.com/2022/04/18/china/shanghai-reports-covid-deaths-mic-intl-hnk/index.html) three Covid deaths, the first official fatalities of an outbreak that’s infected about 400K people since March. Despite a near-zero death rate and [falling](https://www.wsj.com/articles/shanghai-to-continue-strict-covid-19-measures-despite-drop-in-cases-11650630510) cases…

- __China’s doubled down__ on the harshest measures since the pandemic began: it’s [sending](https://www.wsj.com/articles/shanghai-to-continue-strict-covid-19-measures-despite-drop-in-cases-11650630510) all Covid-positive patients in Shanghai to quarantine centers, regardless of symptoms. It’s also amping up mass testing and tracing. 
- __Some residents are running out__ of food and water as clogged ports and closed roads crush supplies. It's illegal to leave home to get groceries, and food-delivery drivers are overstretched. The food crisis has sparked [clashes](https://www.cnn.com/videos/world/2022/04/21/shanghai-residents-push-back-against-covid-measures-culver-dnt-ebof-vpx.cnn) between residents and police.

__A city 3X the size of NYC...__ Shanghai accounts for a 10th of China's exports, but now the world's busiest port is at a virtual standstill. It’s hurting China: spending [fell](https://www.bbc.com/news/business-61137195) last month and unemployment hit the highest level since early in the pandemic. It’s also rippling across the global economy, disrupting everything from corporate profits to the ETA of your Shein order:

- __Pricey shipping:__ The cost to export a container is 5X higher than pre-pandemic, and air freight rates have doubled. 
- __Deflated earnings:__ Nearly a fifth of S&P 500 companies get at least 5% of their business from China, and half of US companies in China have reduced their annual sales estimates. 
- __Crushed output:__ __[Tesla](https://robinhood.com/stocks/TSLA)__, __[Volkswagen](https://robinhood.com/stocks/VWAGY)__, and iPhone-assembler __Pegatron__ are among the manufacturers that’ve had to shut down plants during the lockdown.

Traffic jam in Shanghai (Lu Hongjie/Costfoto/Future Publishing via Getty Images)

Waves

__It could be worse than 2020…__ at least economically. That’s because the world’s been relying *more* on Chinese products since the pandemic started. China’s shares of global exports surged to [15.4%](https://www.cnbc.com/2022/04/15/bernstein-chinas-2022-covid-lockdowns-inflation-risk-bigger-vs-2020.html) last year, the highest in a decade. Read: China’s lockdowns will likely have an even greater impact on inflation and global growth than they did the first time around.

As China tightens its “zero-Covid” lockdowns, the world’s economy could get rocked 2020-style

__Break out the breath mints…__ The great de-masking is here, and it’s confusing. Last week a federal judge tossed the mask mandate for transportation. Airlines like __[United](https://robinhood.com/stocks/UAL)__, __[American](https://robinhood.com/stocks/AAL)__, and __[JetBlue](https://robinhood.com/stocks/JBLU)__ dropped their mask rules in response (some pilots did so [midflight](https://www.nytimes.com/2022/04/19/us/mask-mandate-flights.html)). __[Uber](https://robinhood.com/stocks/UBER)__ and __[Lyft](https://robinhood.com/stocks/LYFT)__ followed suit. But the Biden admin is appealing the ruling. Travelers now face a maze of rules heading into the busy summer travel season: masks are optional on flights, but must be on for public transit (subways, buses, cabs) in cities like NY and LA. 

__Putting the “more” in mortgage...__ It’s a hard time to be a house hunter. In the past two years, inventory sank to a 20-year low just as home prices started hitting record highs. Now mortgage rates are above 5% — their highest level in a decade. Soaring rates are making it more expensive for buyers to borrow $$, if they’re lucky enough to win a bid. Though rising rates are already [starting](https://fortune.com/2022/04/04/redfin-red-hot-housing-market-shows-first-signs-cooling-mortgage-rates/) to cool demand, experts expect housing prices to stay high for a while. Some economists even [worry](https://www.jpmorgan.com/insights/research/us-housing-risk) the US is at risk of another housing bubble.

__Growing, growing, gone...__ Big Tech may be in for a bumpy earnings week. Last week, Netflix [reported](https://snacks.robinhood.com/newsletters/1hJKveGEOmvpzuLtfVejiF/articles/43M2Oild3MGMPYMecA8Q7K/) a subscriber loss for the first time in a decade, which wiped $50B from its market cap. It’s not the only techie stalling out: in February, __[Meta](https://robinhood.com/stocks/FB)__ [posted](https://www.vox.com/recode/2022/2/2/22915110/facebook-meta-user-growth-decline-first-time-metaverse-mark-zuckerberg-tiktok-competition-earnings) its first user drop *ever*. Other tech giants [face](https://www.marketwatch.com/story/the-big-tech-earnings-boom-is-over-and-investors-are-now-searching-for-safety-11643135288) a combo of labor, inflation, and regulatory issues. We’ll see if the pandemic profit party’s ending for __[Microsoft](https://robinhood.com/stocks/MSFT)__, __[Google](https://robinhood.com/stocks/GOOGL)__, __[Apple](https://robinhood.com/stocks/AAPL)__, and __[Amazon](https://robinhood.com/stocks/AMZN)__ when they report this week, and whether Meta has reversed its last quarter’s user shrinkage.

__Treat-yo-self season...__ is still here. __[Visa](https://robinhood.com/stocks/V)__ and __[Mastercard](https://robinhood.com/stocks/MA)__ are seeing a spike in swipes as you splurge on new fits and dining out. Last quarter, [both](https://s25.q4cdn.com/479285134/files/doc_financials/2021/q4/4Q21-Mastercard-Earnings-Release.pdf) saw revenues jump 25%. Now higher credit costs (which rise with interest rates) could boost payments from card holders. Plus, this month Visa and Mastercard plan to raise swipe fees for merchants, which make up the bulk of their profits. But since those fee hikes are passed to customers, lawmakers are calling for them to be shelved. Still, the swipe fees could push profits close to records when they report this week.

- __[Bravo](https://snacks.robinhood.com/newsletters/5dnTQ7q29VzDY0QQYtzv4g/):__ The maker of pricey __Steinway__ pianos [filed](https://www.sec.gov/Archives/edgar/data/1897640/000119312522104954/d212165ds1.htm) to go public on the NYSE. The IP-ian-O comes as luxe spending booms, especially in China, where 30M kids study piano (compared to 10M in the *rest of the world*).
- __[Rev](https://snacks.robinhood.com/newsletters/36fBoHhcd4FMlxtriYB5p0/):__ Tesla’s delivering more cars than ever, even in the face of parts shortages that are holding back its OG competitors. While __[GM](https://robinhood.com/stocks/GM)__ and __[Toyota](https://robinhood.com/stocks/TM)__ saw big sales declines, Tesla’s making record profits. But China’s zero-Covid policy could slow it down.
- __[Adflix](https://snacks.robinhood.com/newsletters/1hJKveGEOmvpzuLtfVejiF/):__ Are you still watching? Apparently not. Netflix’s surprise subscriber loss is sending shockwaves through the streaming world. The Flix is planning an ad-supported tier and a crackdown on password sharing to juice growth.

As China tightens its “zero-Covid” grip, the world’s economy could get rocked 2020-style

Nearly 12B spam texts were sent last month in the US. That’s about 40 texts for every American

🇨🇳 China’s “zero-Covid” effect

__Enter the piano-verse…__ The maker of Steinway pianos is going from the concert stage to the stock exchange. Last week __Steinway Musical Instruments__ [filed](https://www.sec.gov/Archives/edgar/data/1897640/000119312522104954/d212165ds1.htm) to go public on the NYSE (the exact date isn’t set). Its IPO comes as luxury spending booms, particularly in China.

- __Old keys:__ Steinways sell for between $60K and $2.4M. Last year the 169-year-old brand scored nearly $60M in profits, a 14% jump from 2020.
- __New tricks:__ Steinway’s self-playing Spirio accounted for a third of its piano sales last year. Two out of three Spirio owners can’t even play piano, but they can stream live concerts or classic Duke Ellington shows at cocktail parties.

__Powerhouse performers, meet luxury listeners…__ Steinway’s come far from its NYC roots. The company built its brand on partnerships with star pianists (Billy Joel) and iconic venues (Sydney Opera House): 97% of pianists use Steinways in concert. Steinway ships pianos anywhere on Earth for its nearly 2K elite “Steinway Artists” (it even [sent](https://www.steinway.com/news/features/ludivico-einaudi-makes-a-splash) one to an iceberg). But to expand, Steinway is focusing on homebuyers. Increasingly they’re in China:

- __More music:__ Today China has 7X as many pianists as the US. That trend’s accelerating: 30M kids in China study piano, compared to fewer than 10M in the entire rest of the world. 
- __Bigger spending:__ Luxury spending in China’s surging: consumers worth $30M+ — Steinway’s sweet spot — have doubled in the past five years.

Nothing like that new piano smell (Isabel Infantes/AFP via Getty Images)

Ivories

__It’s good to sell pianos, but better to sell luxury…__ Steinway calls itself a luxury brand first and a piano brand second. The reason: the luxe goods market is 135X as big as the musical-instrument market, and it's growing 3X as fast. Steinway mentioned China 156 times in its IPO filing: by catering to China’s music-loving upper class, the piano powerhouse hopes to grow its customer base of big-spending piano lovers.

Steinway files for an IPO to bring its pricey pianos to China’s luxury listeners

__Just in time for Earth Day…__ Carl Icahn's latest beef differs from his usual shareholder-focused strategy of corporate raiding. Yesterday the billionaire investor wrote a passionate letter to __[McDonald’s](https://robinhood.com/stocks/MCD)__ investors accusing the fast-food giant of animal cruelty. Icahn has a small ($50K) stake in the Golden Arches, but it hasn’t kept him from [waging](https://www.wsj.com/articles/blackrock-other-esg-minded-investors-should-back-his-mcdonald-s-campaign-icahn-says-11650503034?mod=markets_lead_pos6) a public proxy battle over the company’s pork-supply-chain practices. 

- __The issue:__ A decade ago, McDonald’s vowed to phase out suppliers that use controversial gestation crates (think: supertight metal stalls for pregnant pigs). Update: still hasn’t happened.
- __Icahn’s answer:__ Add two of his hand-picked directors to McDonald’s board to ensure the pigs are treated better.
- __Mickey D’s response:__ Icahn’s demands are “unfeasible” and would create a “financial burden” for its customers (read: more expensive bacon). 

__Sustainability hypocrisy…__ ESG (environmental, social, and governance) investing is one of the hottest trends on Wall Street. Last year, investors poured a [record](https://www.fastcompany.com/90706552/esg-investing-continued-to-soar-in-2021-the-government-could-boost-it-even-more) $120B into sustainable assets — 2X more than in 2020. While arguing animal welfare should be a pillar of ESG, Icahn’s also calling out corporate green promises as hollow marketing ploys. And he says the big asset managers (like: __[BlackRock](https://robinhood.com/stocks/BLK)__) reap billions without holding companies accountable.

Caged

__A small stake can make a big difference…__ Activist investors are using their influence to force corporations to make sustainable changes. It’s worked before: activist fund Engine No. 1 [won](https://www.bloomberg.com/news/articles/2022-04-07/exxon-faces-emissions-net-zero-votes-a-year-after-activist-win) three seats on __[Exxon's](https://robinhood.com/stocks/XOM)__ board last year with just a 0.02% stake after it convinced shareholders Exxon needed to get serious about climate change. McDonald's shareholders will get their chance to weigh in on Icahn’s cause at its annual meeting next month.

Billionaire Carl Icahn takes on McDonald’s animal-welfare practices, while calling out Wall Street’s ESG “hypocrisy”

Steinway files to go public, and China’s piano-loving upper class is listening

Over 90% of the world’s plastic is never recycled

🎹 Steinway’s IP-ian-O

__Taking a break from [Twitter](https://robinhood.com/stocks/TWTR)...__ Between tweeting about buying Twitter, posting __[Shiba Inu](https://robinhood.com/crypto/SHIB)__ memes, and hopping on __[Tesla's](https://robinhood.com/stocks/TSLA)__ earnings call, Elon is having a busy month. Despite supply struggles and China’s Covid lockdowns, Tesla crushed earnings expectations yesterday.

- __Above and Elon'd:__ The electric-car leader [reported](https://tesla-cdn.thron.com/static/IOSHZZ_TSLA_Q1_2022_Update_G9MOZE.pdf?xseo=&response-content-disposition=inline%3Bfilename%3D%22TSLA-Q1-2022-Update.pdf%22) that sales were up 81% from a year ago, while profit more than 7X'd. The stock spiked 5% after hours.
- __Tesla managed to deliver a record__ [310K](https://ir.tesla.com/press-release/tesla-vehicle-production-deliveries-and-date-financial-results-webcast-first-quarter) cars last quarter, up from 308K the previous quarter. The Model 3 and Model Y (its least pricey models) made up nearly all deliveries.

__It goes Elong way...__ Tesla emerged victorious from "an exceptionally difficult" quarter thanks to #versatility. Its software prowess [allowed it](https://www.nytimes.com/2022/04/02/business/tesla-sales-electric-vehicles.html) to swap hard-to-find chips for ones that were less supply chain-ed. Others weren’t so lucky: while Tesla deliveries were up 70% from the year-ago quarter, OGs like __[GM](https://robinhood.com/stocks/GM)__ and __[Toyota](https://robinhood.com/stocks/TM)__ reported big sales declines because of parts shortages.

- __Showing up:__ Tesla nearly doubled deliveries last year, to 936K, and recently [started](https://www.cnn.com/2022/04/20/investing/tesla-earnings-preview/index.html) shipping cars from its two new Gigafactories in Germany and Texas.
- __Catching up:__ Tesla’s production numbers are moving closer to being on par with traditional luxe carmakers like __[Mercedes](https://robinhood.com/stocks/DMLRY)__ and __[BMW](https://robinhood.com/stocks/BMWYY)__. It’s already pulled ahead of __[Volvo](https://robinhood.com/stocks/VLVLY)__ and __[Subaru](https://robinhood.com/stocks/FUJHY)__.

All lined up and ready to go (Johannes Eisele/AFP via Getty Images)

Tweeter

__China’s clouding the picture…__ for Tesla and for everyone. While some analysts think Tesla could sell 2M cars this year, China’s zero-Covid crackdown is complicating projections. Tesla had to halt production at its key Shanghai factory for weeks because of citywide lockdowns. Yesterday, Elon said “Shanghai’s coming back with a vengeance” ([sleeping bags](https://insideevs.com/news/580746/tesla-retarts-production-close-loop-system/) and all). But the plant’s closure is [expected](https://www.washingtonpost.com/technology/2022/04/20/tesla-elon-musk/) to knock 50K cars off this quarter’s output.

Tesla shows up OG carmakers by crushing earnings with a delivery record, but China is complicating its future

__You’ve hardly touched your Grub…__ and now it’s getting cold. Dutch food deliverer __Just Eat Takeaway__ says it’s [considering](https://www.wsj.com/articles/just-eat-takeaway-considers-putting-grubhub-up-for-sale-after-orders-fall-11650455192) a sale of its US unit, __Grubhub__. It was only last year that Just Eat bought Grubhub for $7.3B, after a boom in pandemic ordering. But the Hub has slowly been crowded out as the delivery rivalries intensified:

- __Lost appetite:__ Just Eat posted a 5% decrease in orders last quarter in North America. 
- __Shrinking slice of the pie:__ Last month Grubhub delivered only 10% of US online orders, down from *nearly 70%* in 2016. In that same span, __[DoorDash](https://robinhood.com/stocks/DASH)__ boosted its share more than 10X, to 59%, and __[Uber Eats](https://robinhood.com/stocks/UBER)__ upped its take 6X, to 30%.

__People are still ordering food online…__ just not on Grubhub. Monthly sales across the online food-delivery biz have increased about 6X since 2018. This year they’re expected to jump 15% from 2021. But well-funded competition and mounting regulatory pressure have made it hard for Grub to stay on top.

- __Dining and dashing:__ Customers will gladly ditch one app to order a cheaper burrito from another; Grubhub’s ex-CEO [said](https://secondmeasure.com/datapoints/food-delivery-services-grubhub-uber-eats-doordash-postmates/) these “promiscuous customers” limit growth.
- __Fee frustration:__ Early in the pandemic, big markets like NYC capped delivery fees to protect struggling restaurants. Grubhub [lost](https://qz.com/2157060/just-eat-takeaway-explores-grubhub-sale-less-than-a-year-after-buying-it/) $100M+ from US fee caps in 2020.

Takeout

__It’s hard to overcome the “first-mover disadvantage”…__ Grubhub dominated US delivery for years before IPO’ing in 2014. But going public first may have worked against it. Although Grubhub posted its first profit in 2018, it sacrificed growth to get there, and now it’s losing money again. Meanwhile, Uber Eats and DD have *never* turned an annual profit, but they’ve burned through VC cash to take a big bite from Grubhub’s market share.

Grubhub may be sold — again — as the one-time delivery leader falls behind Uber and DoorDash

Tesla sets a delivery record, but China is complicating its future

Netflix estimates that 100M+ non-paying households share passwords, and now it’s planning to crack down on moochers

🚚 Tesla delivers

__Binged “Anatomy of a Scandal”...__ Netflix knows we can devour a limited series as if we had unlimited time. The streaming leader revealed yesterday that it [*lost*](https://www.wsj.com/articles/netflix-earnings-q1-2022-11650325682) 200K subscribers last quarter (it was expected to add 2.5M). Even worse: it expects to lose 2M global subs this quarter. Flix shares plunged 25% after hours and are down over 40% this year.

- __Old plot:__ Netflix saw explosive growth in 2020 as Emily in sweats binged “Emily in Paris.”
- __Current plot:__ The pandemic boom led to subscription saturation (#subscripturation) and slowing growth. Netflix added 18M paid subs last year, versus 37M in 2020. Now it’s *losing* subs. 
- __New plot:__ To spur growth, Netflix has expanded beyond content. Last year it [launched](https://snacks.robinhood.com/newsletters/7Kx3ILkPTkUU1EpjaVEiu7/articles/44NJYUat1m1imvGSWMklvL/) a show-themed merch shop (think: “Ultimatum” [tees](https://www.netflix.shop/collections/the-ultimatum)) and five in-app [games](https://www.cnbc.com/2021/11/02/netflix-launches-its-first-mobile-games.html). It’s also expanded into “[experiences](https://techcrunch.com/2022/04/11/stranger-things-fans-can-explore-the-upside-down-in-new-nyc-experience/)” like a “Stranger Things” Upside Down world in NYC.

__Netflix’s ultimatum...__ Unlike Hulu, HBO Max, and other ad-supported streamers, Netflix has rejected commercials, relying instead on subscription $$. In 2019, CEO Reed Hastings said he’d never do ads, “period.” But high prices (#flation) + subscription overload (#subscripuration) have made it harder for consumers to afford multiple streamers. Fast-forward to now:

- __Netflix__ CFO Spencer Neumann recently cracked the door open to ads, saying "never say never" to an ad-supported tier. 
- __Even [Disney+](https://robinhood.com/stocks/DIS)__ is [launching](https://www.nytimes.com/2022/04/19/business/media/netflix-amazon-disney-ads.html) a lower-priced ad tier to hit its subscription goals.

From “never ads” to “never say never” to ads (Ethan Miller/Getty Images)

Ultimatum

__It’s the price-cutting paradox…__ Lowering prices can boost revenue — but only if customers who were paying “premium” prices don’t downgrade. Netflix’s $15.50/month standard plan may be out of reach for many budget-conscious households, so adding a cheaper plan supported by commercials could help it grab a new market. The risk: subscribers who are paying for pricier ad-free plans might downgrade (that [*hasn’t*](https://www.nytimes.com/2022/04/19/business/media/netflix-amazon-disney-ads.html) happened to HBO Max yet). As streaming competition intensifies, it may be worth the risk for the Flix.

Netflix lost 200K subs last quarter and expects to lose millions more. Now ads could be its saving grace

__Slow burn…__ Today is 4/20, the unofficial holiday of cannabis connoisseurs. It’s been a decade since recreational pot was first legalized in the US, in Washington and Colorado. Since then, 16 more states and DC have followed. While national legalization remains an open question, the industry has found ways to [advance](https://fortune.com/2022/04/11/legal-marijuana-sales-33-billion-2022/): 

- __Legal cannabis sales__ are expected to total $33B in 2022, a 32% jump from last year.
- __Three quarters__ of Americans now live in states with some form of legalized weed.
- __520K workers__ are now employed in the US cannabis industry.

__Put that in your pipe and vote on it…__ This month the House [passed](https://www.nbcnews.com/politics/congress/house-vote-bill-legalize-marijuana-rcna22527) legislation to legalize cannabis nationwide. But the bill’s stuck in the Senate, where it’s unlikely to pass because of partisan gridlock — even though it has [support](https://news.gallup.com/poll/356939/support-legal-marijuana-holds-record-high.aspx) from nearly 70% of voters. The absence of a federal law has been a buzzkill for cannabis companies as they try to expand nationally:

- __Green stocks turn red:__ Shares of billion-dollar cannabis giants __[Tilray](https://robinhood.com/stocks/TLRY)__ and __[Canopy Growth](https://robinhood.com/stocks/CGC)__ have fallen to five-year lows as legalization efforts have stalled. Many canna-businesses have chosen to sell in only one state to avoid complex interstate commerce laws.
- __Nowhere to put the green:__ Banks like __[Chase](https://robinhood.com/stocks/JPM)__ and __[Citi](https://robinhood.com/stocks/C)__ and payment processors like __[Visa](https://robinhood.com/stocks/V)__ won’t handle cannabis $$ for liability reasons — even where it's legal. But small banks and credit unions are [embracing](https://www.bloomberg.com/news/newsletters/2022-01-18/marijuana-banking-is-moving-forward-despite-federal-uncertainty) the industry and could open the door to “cannabis banking.”

__High demand doesn’t always assure fast growth…__ Sometimes it’s in the hands of politicians. President Biden hasn’t pushed for pot legalization, which makes it unlikely the Dem-controlled Senate approves the current bill. But analysts think lawmakers may greenlight canna-banking this year, which could help cannabis companies expand to multiple states even without full legalization.

A decade after the first legal toke, a lack of federal laws still weighs on cannabis companies

Netflix lost subscribers for the first time in a decade. Ads could be its saving grace

The term “4/20” was apparently coined by a group of California teenagers in 1971.

🍿 Netflix + ads?

__Bitter medicine…__ __[Twitter’s](https://robinhood.com/stocks/TWTR)__ taking drastic measures to get rid of its Elon headache — a sign it *really* doesn’t want to be under the Technoking’s tweet-happy thumb. Quick recap: two weeks ago Elon Musk [revealed](https://snacks.robinhood.com/newsletters/5lepo7UAINWNcn90JfK6HE/articles/68N6hnLpsgBLa7R4OZx8YF/) a 9.2% stake in Twitter. He then made a $43B offer to buy the company (after declining a seat on its board). Twitter responded by creating a “poison pill” — a tried-and-true way for companies to avoid a hostile takeover. 

- __How it works:__ If Elon tries to buy 15% of Twitter’s shares, the pill kicks in and lets every shareholder *except* Elon buy shares at half price — making a buyout way costlier for him (and diluting Twitter’s stock in the process). Twitter’s board voted unanimously to adopt the plan for one year. 

__The opposite of shareholder activism…__ is board *react-ivism*. Poison pills were invented in the 1980s to stop “corporate raiders” from taking over public companies. To date, no buyer has [ever](https://qz.com/2155991/what-is-a-poison-pill-inside-twitters-plan-to-block-elon-musk/) swallowed a poison pill and forced a takeover at an inflated price (they usually back down). 

- __Taking their pills:__ __[Netflix](https://robinhood.com/stocks/NFLX)__ [used](https://money.cnn.com/2012/11/05/technology/netflix-poison-pill/) a poison pill to stop activist investor Carl Icahn from taking over in 2012, and __[Papa John’s](https://robinhood.com/stocks/PZZA)__ adopted one to [prevent](https://www.nytimes.com/2018/07/23/business/papa-johns-john-schnatter-poison-pill.html) disgraced founder John Schnatter — Papa John himself — from regaining control in 2018.

Case of Elon-itis? Take one and call us in the morning (Peter Dazeley/Getty Images)

Swallow

__But poison pills aren’t 100% effective…__ and if anyone’s willing to swallow one, it might be Elon. With enough money and influence, it’s possible to avoid a poison pill. Theoretically, Elon could persuade 51% of shareholders to replace Twitter’s board — and then buy Twitter anyway, thereby circumventing the pill. But that would take a while, and Twitter’s board could choose another buyer in the meantime. Already, private-equity giants __Thoma Bravo__ and __Apollo__ are [reportedly](https://www.reuters.com/technology/apollo-global-considers-participating-bid-twitter-wsj-2022-04-18/) considering bids.

Twitter pops a “poison pill” to block Elon’s buyout. One possible side effect: selling to someone else.

__The sound of Pop2K...__ a road-trip playlist must. __[SiriusXM](https://robinhood.com/stocks/SIRI)__, the home of Howard Stern and all-day Bruce Springsteen radio, was once a struggling player in a dying industry. It has since turned its fortunes around by focusing on cars… and drivers who’d rather flip on their fave station than fiddle with an aux cord. But Sirius shares fell nearly 3% yesterday after an analyst said the car industry’s ongoing chip shortage could turn into a profit prob. 

- __Last quarter Sirius’ free-trial subscribers__ fell 19% from 2020, partly because of declining car sales. FYI: Sirius relies on converting its trial members into full-time subscribers to make $$. 

__Capitalizing on the commute...__ Sirius’ market cap is nearly the same as __[Spotify’s](https://robinhood.com/stocks/SPOT)__ (about [$26B](https://robinhood.com/stocks/SPOT)), thanks to its 32M+ monthly subscribers. Over the years, automakers from __[GM](https://robinhood.com/stocks/GM)__ to __[BMW](https://robinhood.com/stocks/BMWYY)__ have teamed up with Sirius to integrate its satellite-radio software into their newest models. Now over 80% of new cars sold are Sirius-equipped. But global supply shortages that’ve made car inventory so tight have also put the squeeze on Sirius to diversify:

- __Sirius is focused on creating [content](https://investor.siriusxm.com/investor-overview/press-releases/press-release-details/2022/SiriusXM-Reports-Fourth-Quarter-and-Full-Year-2021-Results/#:~:text=SiriusXM%20Revenue%20Increased%204%25%20to,the%20full%20year%20of%202020.)__ for on and off the dashboard, like hosting exclusive virtual concerts and building up its slate of podcasters.

Tunes

__Low churn is the key to profits…__ Till now, Sirius has largely dodged its car troubles by providing a wide variety of curated programming for road warriors, whether they want Top 40, podcasts, or Howard. And they’re still tuning in: Sirius’ churn rate (aka the # of subscribers who opt-out each year) is less than 2%. That’s better than traditional streamers like __[Disney+](https://robinhood.com/stocks/DIS)__, Spotify, and even Netflix. Yet its long-term success is still tied to the health of the car market.

SiriusXM could be the next company hit hard by the chip shortage, but “sticky” subscribers are helping cushion the blow

Twitter prescribed a “poison pill” to stop Elon’s buyout, but it’s not 100% effective

People born in early 1980s — aka elder millennials — held 8.6 jobs, on average, before they turned 35