👟 Allbirds’ woolly earnings
![Eucalyptus-pulp shoes in the wild [Gary John Norman/ The Image Bank via Getty Images]](https://cdn.robinhood.com/static_content/mwphzyq69oso/en-US/assets/files/34cHUzFAyLoXOiiFJXVGuV_1_GettyImages-149028451.jpg)
Hey Snackers,
Shine bright like a republic: The Caribbean island of Barbados has removed Queen Elizabeth II as its head of state. Rihanna, who hails from the former British colony, attended a grand ceremony to celebrate the new republic — and was named its 11th national hero.
Stocks plunged yesterday after Fed Chair Jerome Powell said higher inflation could be coming in the wake of the Omicron variant. He said the central bank might consider ending its economy-boosting bond-buying program sooner than expected.
UK regulators ordered Facebook to sell Giphy — and it could set a powerful precedent
Time to fire up the popcorn.gif… Facebook’s purchase of Giphy is turning into a thriller. Yesterday the UK’s antitrust regulator ordered Meta (formerly Facebook) to sell Giphy, the GIF-sharing platform that FB acquired last year for $315M. Refresher: Giphy doesn't own the rights to the vids used in GIFs, so it made money by showing sponsored results to searches (you search "glow up" and get a glossy mouth with Maybelline branding).
- 2 whammies: Regulators say the merger reduced ad competition by killing Giphy’s ad service in the US and hurt social competition by giving Meta control over Snap, Twitter, and TikTok’s access to GIFs.
- 4 options: Meta can appeal, sell Giphy, leave the UK, or get fined. The UK already fined Meta $70M for failing to cooperate with the investigation. The social giant said it’s considering an appeal.
Zuck never Meta tougher regulator… The company formerly known as Facebook has received plenty of antitrust criticism before, but this lawsuit is unprecedented because it involves a UK regulator trying to break up a completed tech merger between American companies. Still, global regulators have targeted US tech giants before. A few examples:
- London regulators ordered Uber to shut down in 2019, but Uber won the legal battle.
- Australia passed a law to make Facebook and Google pay for news content, and both eventually struck deals with Aussie media companies after getting the legislation amended. Oz is expected to announce a new inquiry into Big Tech companies today.
Precedent is powerful… Since Meta faces ongoing antitrust lawsuits worldwide, regulators will be watching its every move. If Meta doesn’t appeal, other regulators may be emboldened to crack down too. President Biden has appointed several regulators in the past year — like FTC Chair Lina Khan — who can’t wait to challenge monopolistic practices at Meta, Google, Apple, and Amazon. Meta doesn’t want to set a precedent that could break up its biz, so it may take extra care to guard its GIFs.
Eco-friendly shoemaker Allbirds posts strong sales for its first-ever earnings — but needs a bigger fan base to potentially turn a profit
Wool shoes and hydro flasks… Throw in a Patagonia, and you’ve got yourself a tech uniform. Allbirds’ eco-friendly shoes have become a Silicon Valley staple. Think: $98 kicks made from wool, sugarcane, and South African eucalyptus pulp. Shares of the direct-to-consumer company have fallen 33% since going public last month. Allbirds’ first public earnings report didn’t wow investors, and the stock dropped 6% after hours.
- Step up: Allbirds' quarterly sales rose 33%, to $63M, thanks to strong demand for its new athleisure clothing line and fresh sneaker styles (like limited-edition Runner Fluffs).
- Step down: Allbirds’ loss nearly doubled from last year, to $14M, as it splurged to expand its brick-and-mortar stores to 31 locations.
Plastic-bottle shoestrings… and carbon-negative soles. Allbirds has put sustainability at the center of its business, attracting eco-conscious Zillennials. While the average pair of sneakers creates 12 kilograms of CO2 emissions, Allbirds claims its shoes produce only 7. Its ESG pledges include creating 100% renewable energy for its production facilities by 2025.
- Younger consumers are almost 2X as likely to consider ESG issues when making purchasing decisions, compared to consumers over the age of 38.
- That’s why companies like Beyond Meat, Patagonia, Tom’s, and Allbirds have put eco-friendly messaging and materials at their core.
Brand love doesn’t equal brand permanence… Last year, more than half of Allbirds' sales were from repeat customers. But since its expenses are growing along with losses, it may need to grow beyond that core audience to survive long term. Values-driven companies like Impossible Foods and Beyond Meat have seen sales slump recently, and even OG sustainable shoe brand Toms has had to revamp its image to broaden its appeal.
What else we’re Snackin’
- Cron: While scientists race to understand Omicron’s threat, vax leaders are sharing early predictions: The creator of Pfizer’s Covid vax said Omicron is unlikely to cause severe illness in vaxxed people, while Moderna’s CEO said it could make shots much less effective.
- Pillin: An FDA advisory panel narrowly endorsed the use of Merck’s Covid-treatment pill, despite unanswered questions over its effectiveness and safety.
- DeTweet: Twitter said it won’t allow users to share non-public photos or videos of other people without their consent.
- Cryptic: Following reports that India would ban all private cryptocurrencies, the country clarified that it’s closely monitoring crypto ads — not weighing a ban (for now).
- Cloudy: Amazon’s AWS, aka the world’s biggest cloud provider, launched new chips to help customers beat the cost of computing chips from Intel and Nvidia.
- Musky: Elon told SpaceX employees that the lack of progress made in developing Raptor rocket engines has created a “genuine risk of bankruptcy.”
Wednesday
- Earnings expected from: Snowflake, CrowdStrike, Okta, Build-A-Bear Workshop, and Royal Bank of Canada
Authors of this Snacks own shares of: Google, Twitter, Apple, Uber, Snap, Pfizer, Amazon, and Moderna
ID: 1941041