đź—ł Facebook's Trump dilemma
![_A look inside the new Cadillac Escalade [E+ via GettyImages]_](https://cdn.robinhood.com/static_content/mwphzyq69oso/en-US/assets/files/5p5Y8uXViPo6GdjtQXxP5h_1_GettyImages-1092630192.jpg)
Hey Snackers,
Skittles-owner Mars is launching a trademark infringement lawsuit over a THC-laced copycat whose name is “confusingly similar” to Skittles. The name: "Zkittlez."
The industrials-heavy Dow index rose to a record yesterday, while Big Tech continued to fall.
Facebook's Oversight Board delivers a Trump ban decision (plus, one non-decision)
When FB "Memories" resurfaces a terrible pic... Flashback to January: Big Tech excommunicated Donald Trump, after he was criticized for stoking the storming of the US Capitol. Twitter permanently banned Trump and removed all of his tweets. Facebook suspended his accounts temporarily — and potentially indefinitely. About that...
- FB punted the decision to its "Oversight Board," a 20-person independent body that makes binding decisions on content moderation. It includes law school professors, a Nobel Peace Prize Laureate, and... the former Prime Minister of Denmark.
- The Board decided that FB was justified in suspending Trump, but didn’t explain if/why the ex-POTUS should be permanently banned. Also: that it was inappropriate for FB to impose the "standardless penalty" of indefinite suspension.
Call it "scapeboard"... FB punted the weighty decision to the board. The Board punted it right back, giving FB six months to determine whether Trump should be permanently banned and why. But even without a final decision...
- The Board's support of the restriction sets a precedent for how FB (and even other social apps) may be expected to react to world leaders going forward.
- Facebook has been scrutinized for not taking action when leaders incite violence, including allowing Indian politicians' posts saying Rohingya Muslim immigrants should be shot.
- Twitter has been criticized for not labeling or removing tweets from Iran's Supreme Leader calling for the annihilation of Israel, and violent posts from other world leaders.
A few (tech-annointed) people have immense power... to define online speech policy for billions. But at least FB's Oversight Board is independent — more than can be said for other social giants. Nearly half of Earth’s population uses FB, but 20 people are making binding decisions on its most important moderation policies. The alternative: an unknown group of FB execs deciding. Twitter, with its ~5K employees, makes decisions internally for its ~200M users. But it recently launched a community-run moderation program. Going forward, we might see more efforts to establish independent moderation groups.
GM leans into the "business class on wheels" life as profit soars
It goes down in the GM... and up in the earnings. GM drove home $3B in profit for the January to March quarter, up from ~$300M in the same quarter last year. It was nearly a record for the OG carmaker, despite a global chip shortage that's been shutting down car factories.
- Chip shortage = fewer cars = higher prices. The inventory crunch has led to record car prices. And don't expect a generous promo from dealership Bob.
- $37K: The average price paid for a new vehicle last quarter. Meanwhile, the average discount fell 20%. That seriously padded GM's profit.
Law & Order: SUV... GM's monster profit was also fueled by redesigned SUVs, including the Chevy Suburban and the Cadillac Escalade. GM took a few pages from Delta — it's going full "Business Class on Wheels" with these models.
- Think: Premium second-row legroom and HD touch-screens for the seven kids in the back. New Escalade displays have "twice the pixel density of a 4K TV." Throw in hot towels, and go LA-London nonstop.
- These big babies have routinely sold for $100K since they arrived last year, though some start at around only ~$52K. For GM, the add-on perks justify the extra greens ($$$).
- Now GM is doubling down on e-SUVS, too: It just unveiled a second (decked-out) version of the Hummer EV SUV.
GM smells "price insensitivity" signals... Price sensitivity = the degree to which a product's price affects purchasing decisions. Price insensitivity = the opposite. GM knows that when you roll into the dealership asking for a $70K Escalade, you could probably pay $90K to upgrade. Extra money for dealers means GM can mark up prices – and boost its profit. Price sensitivity is why GM has only three sedans left on the US market (that Chevy Malibu isn't a profit puppy).
What else we’re Snackin’
- Vax: The Biden admin is supporting a proposal to waive companies' intellectual property protections for Covid vaccines (think: vax patents).
- Recall: In a major reversal, Peloton recalled its treadmills after dozens of injuries and one death — and apologized for its initial response.
- Tacos: Uber's gross bookings grew 24% last quarter thanks to Uber Eats, which now makes up nearly two-thirds of its total biz.
- Diaper: Shares of Jessica Alba's Honest Co. soared 44% on their first trading day. Now the company (and its diaper cakes) are worth ~$2.7B.
- YarnIt: Etsy said sales more than doubled last quarter from 2020, but the stock plunged 9% because it expects slowing growth (#DPF).
Thursday
- Weekly jobless claims
- Earnings expected from Moderna, Peloton, Beyond Meat, Expedia, Volkswagen, Live Nation, and AMC
Authors of this Snacks own shares of: GM and Uber
ID: 1636658