__Rough week for PR...__ WSJ got its hands on some juicy __[Facebook](https://robinhood.com/stocks/FB)__-internal docs, and the bad headlines have been snowballing. Controversies include: a secret Facebook [moderation program](https://snacks.robinhood.com/newsletters/6273N36MQkF8DmmFKWXxCz/articles/2ovyNZgvE7UCLZgejwImpo/) that exempts celebs from usual posting restrictions, and a test initiative that pushed positive news stories about FB to users. The latest shocking revelation: FB has extensive [internal research](https://www.wsj.com/articles/facebook-knows-instagram-is-toxic-for-teen-girls-company-documents-show-11631620739) showing that Instagram is toxic for teens.

__Not a secret...__ Criticism of social media's impact on mental health has been building for years, amplified by documentaries like *The Social Dilemma* and vocal lawmakers. What's notable about FB is the scale of the problem. FB researchers consistently found that Insta is harmful for a significant percentage of users — especially young girls.

- __32% of teen girls__ said that when they felt bad about their bodies, Instagram made them feel worse.
- __6% of American users__ who reported suicidal thoughts traced those desires to Instagram. For British users, it was 13%.
- __+178%:__ Suicide deaths for children ages 10 to 14 nearly tripled from 2007 to 2017, when social media saw mass adoption.

__The paradox...__ The most problematic social app features also seem to drive the most engagement — along with profits and stock prices. Last quarter, FB's revenue soared, and profit nearly doubled to $9.5B. __[Snap](https://robinhood.com/stocks/SNAP)__ and __TikTok__ are also experiencing strong growth, largely thanks to young users who are growing up with these apps:

- __40%+ of Insta users are 22 and younger.__ Snap reaches 90% of US 13- to 24-year-olds. And 60% of TikTok users are between the ages of 16 and 24. 


Social

__We might be reaching a tipping point...__ Despite all the bad PR, social companies' revenue engines are thriving. Extensive regulations exist to protect our physical health (think: the FDA for food and drugs, and the NHTSA for driving). But we don't have many guardrails to protect *mental* health. If social giants start seeing regulatory and public criticism hit their balance sheets, an inflection point could force change. Already, lawmakers are pressing Facebook to abandon its plan to launch Instagram for kids.

Facebook’s Spiral: secret docs reveal the extent of Insta’s mental health toll on young users

__Surreal estate...__ Last week, markets wobbled as Chinese property giant __Evergrande__ missed an $83M payment — and it’s just the tip of a *$300B* debt iceberg. Investors [fear](https://snacks.robinhood.com/newsletters/3Bs2pOGJvHdNI3cCRY71xs/articles/1qtE8qfWuwZ3TCDJAbdXaw/) that Evergrande's collapse could cause a Lehman-esque global stock slump, and throw markets into turmoil. If Evergrande defaults, its financial partners, including __HSBC__, __BlackRock__, and __UBS__, could lose big money. Investors are watching to see if Evergrande will come up with the cash during its 30-day grace period — or miss more payments.

__You're gonna need a bigger boat...__ More like a higher ceiling.  Quick refresher: The US Treasury’s borrowing is limited by a “debt ceiling.” If it needs more cash, it asks Congress to raise the cap. Now, the US needs a higher ceiling to cover trillions worth of Covid expenses, but Congress can’t agree on a limit. If a deal doesn't happen, the US could default on its debts for the *first* time. Analysts say there’s a 20% chance of default, which could wipe out as many as 6M jobs and $15T in wealth. 


Zoom Out

Stories we're watching...

__Bed Bath & Beyond expectations...__ When you finally get the fitted sheet on the twin bed. Last quarter, __Bed Bath & Beyond__'s sales of bathroom and home organization products surpassed pre-pandemic levels, doubling from last year. Cue: BB&B raised its annual sales expectations,  and expanded its __DoorDash__ partnership to offer more delivery. We’ll see if the bedding icon saw a back-to-college boost when it reports quarterly earnings Thursday. 

__Fashion vs. #Flation...__ Consumer spending surged this spring when shoppers “revenge spent” on new outfits and plane tickets after a couch-bound year. While boosted unemployment benefits have ended, $300/month child tax credits ([#SecretStimulus](https://snacks.robinhood.com/newsletters/4UfptC7RMAEOo0YSfMmIZm/articles/9MKQo3q2RW7laXpPvRaf6/)) are now getting doled out. Experts expect spending to keep rising, but prices are also continuing to rise (#inflated). We’ll see if "revenge spending" has continued when inflation-adjusted consumer spending numbers drop on Friday.

Events

Coming up this week...

- __[Beat](https://snacks.robinhood.com/newsletters/5FNosAv8NvHNCzrNb49Ii6/articles/4O0eLLUfla8wJsZbvh3aNS/):__ __Universal Music__ shares soared 40% last Tuesday after going public, as the $53B music giant competes to make a soundtrack for the digital economy.
- __[Mine](https://snacks.robinhood.com/newsletters/Wse3pzG993ntz6I6lNfH0/articles/9jkoKs1Rhhifc8OVYQOlZ/):__ __Ford__ partnered with "urban mining" company __Redwood Materials__ to recycle its EV batteries from cars like the Mustang Mach-E.
- __[IRL](https://snacks.robinhood.com/newsletters/Wse3pzG993ntz6I6lNfH0/articles/1Zx3n1CYZfK7B547vqTIGO/):__ __Amazon__ reportedly plans to open physical department stores that feature QR codes, touch screens, and techy dressing rooms. The goal: end "retail ghosting."

ICYMI

Last week's highlights...

Dow Jones

S&P 500

Nasdaq

Bitcoin

_Remembering where the Bed Bath & Beyond coupons are stashed [sturti/E+ via GettyImages]_

📱Insta’s mental health toll

__Disruption on Level 2 Women's...__ __[Amazon](https://robinhood.com/stocks/AMZN)__ upended department stores by becoming a click-to-buy shopping behemoth. Now, the Zon reportedly plans to disrupt physical department stores again — *by opening its own*. Amazon tried to keep it hush-hush, but WSJ's "people familiar with the matter" (#PFWTM) [revealed](https://www.wsj.com/articles/inside-amazons-department-store-plans-high-tech-dressing-rooms-its-own-apparel-brands-11632303002?mod=business_lead_pos2) some juicy deets about the rumored stores...

- __What:__  The Zon's own clothing brands would be featured front-and-center. Amazon launched private label apparel in 2016, and now has 100+ brands. This year, it surpassed __[Walmart](https://robinhood.com/stocks/WMT)__ as America's largest clothing seller (wild). 
- __Why:__ Amazon wants to see if stores can boost sales of private labels, while merging the digital and IRL experience. The first stores could open near San Francisco and Columbus, OH as early as next year.

__Do you have this in size Prime?...__ The most disruptive part of the Zon's rumored stores: techy dressing rooms. According to WSJ, customers could scan QR codes of items they want to try via phone app, while associates gather the fits and deliver them to rooms. But what happens *inside* the dressing room is even techier:

- __No awkward door-talking:__ Instead of calling for help through the door, you could request more items using a touch screen. 
- __No barefoot browsing:__ Instead of rushing out of the stall to dig for better items, the screen could recommend other clothes based on what you've scanned. 

_Alexa, show me this in blue [Kris Ubach and Quim Roser via GettyImages]_

Dressy

__It's harder to "retail ghost" in person...__ That's partly why Amazon has expanded into physical stores for groceries, books, and now potentially clothes. Dressing rooms are the digital shopping carts of physical stores. But it's easier to abandon items in your e-cart than to walk out of a dressing room empty-handed. Clothes typically have higher profit margins than other items. Amazon's hoping its techy rooms will reduce retail ghosting and returns, while boosting cushy apparel sales.   

Amazon reportedly plans to open department stores with techy dressing rooms at the core

__Where is my mined?…__ __[Ford](https://robinhood.com/stocks/F)__ partnered with battery recycler __Redwood Materials__ to recycle EV batteries from its e-cars, like the Mustang Mach-E. Redwood, started by an ex-__[Tesla](https://robinhood.com/stocks/TSLA)__ exec, is a Nevada-based “urban mining” startup. It extracts valuable metals like lithium, nickel, and cobalt from old cell-phones, appliances, and car batteries. One EV battery = 166 iPhones worth of cobalt. How it works:

1. __Trash:__ Ford sends its old EVs to Redwood’s US processing facility.
2. __Transform:__ Redwood recovers 95%+ of battery materials by “mining” metals, then sends them back to Ford. 
3. __Treasure:__ Ford and other car makers build new EV batteries from the reclaimed metals. 

__What’s yours is mine(d)…__ For a price. The metals in EV batteries and smartphones are already pricey because they’re globally sourced: Your iPhone could contain Congolese cobalt or Bolivian tin. But prices are spiking even higher. Lithium prices have *doubled* since November. Battery recycling is booming since it reduces production and transit costs: 

- __$25B:__ How much of its battery-recycling biz Redwood plans to shift from Asia to the US. 
- __$50B and $174B:__ Biden's commitments to the domestic chipmaking and EV industries, respectively. EV incentives could give the battery biz an energy boost.

Mine

__Supply circles are the new supply chains…__ Because one car’s trash is another car’s treasure. Other EV-makers are also trying to “close the loop” of their supply chains by recycling their own batteries: __Tesla__ recycles its e-batteries, and __[GM](https://robinhood.com/stocks/GM)__ partners with battery recycler __Li-Cycle__. It’s not just EVs, either: Next time you recycle your cell-phone or laptop at __[Best Buy](https://robinhood.com/stocks/BBY)__, it could end up with Redwood.

Ford’s new EV battery recycling deal could take “urban mining” mainstream – and ease the supply crunch 

👗 Amazon department store rumors

__Welcome to workationland...__ __[Airbnb](https://robinhood.com/stocks/ABNB)__ CEO Brian Chesky predicts a revolution: *a travel revolution*. At a conference this week, Chesky said he expects the industry to bounce back bigger than ever. Chesky believes a “travel revolution” will usher in a new golden age of travel, that’s more free-style than pre-pandemic travel. What he expects:

- __Long stays:__ 50% of Airbnb stays are a week or more, and 20% exceed a month.
- __Loose plans:__ 40% of travelers don’t initially have a destination or date in mind when they visit Airbnb’s site.
- __Rural > urban:__ Rental occupancy in large US cities fell 11% this year from pre-pandemic levels, but *increased* 27% in rural areas.

__You say you want a travel-ution…__ Airbnb is a comeback story of the corona-conomy. The rental icon lost 80% of its business when the pandemic hit. But it quickly embraced the work-from-home life and catered to changing travel trends. Since then, sales have rebounded to exceed pre-pandemic levels. How Airbnb’s ushering in the travel-ution:

- __“I’m Flexible” options__ let travelers go anywhere, anytime. Handy, since 70% of US companies will continue offering flexible and remote work.
- __Unique stays__ like boat houses, yurts, caves, and even shipping containers cater to adventure-hungry, couch-tired remote workers (#edgy).
- __Off-the-beaten-track options__ in rural allow travelers to stay socially distanced as part of Airbnb’s “Greatest Outdoors” campaign.
- __Online experiences__, like a Mezcal & Tequila Cocktail Masterclass, give travelers Covid-safe options. 


_Airbnb review: 5 stars for location, 1 star for no microwave [Marco Bottigelli/Moment via GettyImages]_

Bleisure

__Revolutionize to thrive...__ is better than “adapt to survive.” Airbnb thrived during the pandemic by recognizing the “old” travel biz was gone, and quickly building new experiences for remote, Covid-conscious customers. But it’s harder for some travel companies to adapt: Despite a rebound in leisure trips, the airline biz is struggling. Business travel, which brings in 75% of airlines' profits, still isn't budging back.  

Airbnb's CEO is planning for a travel-ution — and it’s all about flexibility (and yurts)

__Square-toe heels out in public...__ Princess Polly just hit the US public market. You've probably seen Gen Z “microinfluencers” doing hauls of its clothes (#PollyHaul). The trendy online fashion boutique, owned by __[A.K.A Brands](https://robinhood.com/stocks/AKA)__,  is one of the first fast-fashionistas to hit Wall Street since ASOS. Like ultra-fast fashion giant Shein, A.K.A churns out 500 to 800 styles per week across its brands, which include Princess Polly, Petal & Pup, and Rebdolls. But A.K.A. shares fell 9% after their NYSE debut. 

- __Used > new...__ Fast-fashion isn't so fashionable anymore. Recommerce and thrifting have been #thriving recently thanks to enviro-focused Zillennials.
-  __Wild stat:__ The fashion industry is responsible for 10% of global carbon emissions — and fast-fashion is one of the worst offenders.

__Recycled t-shirt bidding war...__ The ~$30B fast-fashion market is projected to grow 22% this year from 2020 – but younger consumers don't love the environmental price tag, and are willing to pay extra for more sustainable fashion. Now, fast-fashion brands are trying to hop on the green wave. Polly launched an "Earth Club" and started using "low-impact" clothing material, H&M plans to use 30% recycled materials by 2025, and UK-based BooHoo pledged to halve emissions by 2030.


Wedge

__Fashion isn't sustainable, but sustainability is fashionable..__ On one end, we've got recommerce brands like __ThredUp__ and __Poshmark__ that have leaned in to green. On the other, brands like Shein and __Forever21__ are focused on constantly-changing trends — which requires churning out thousands of new items each day. Gen Z controls $140B+ in spending power,  and 25% of GenZ'ers say their purchasing decisions are influenced by environmental impact. Fast-fashion may have to change to stay on trend. 

Princess Polly parent A.K.A Brands goes public as fast-fashion butts heads with sustainable trends 

🚐 Airbnb's travel-ution 

__Sound on…__ __Universal Music Group’s__ stock soared ~40% yesterday after dropping on an Amsterdam stock exchange, giving the world’s largest record label a $53B market cap. UMG represents stars like Taylor Swift, Justin Bieber, Billie Eilish and The Beatles. Now, it’s benefiting from the streaming revival of the music industry. 

__YouTube to MP3 download…__ The rise of streamers like __[Spotify](https://robinhood.com/stocks/SPOT)__ and __[Apple](https://robinhood.com/stocks/AAPL)__ reversed the music industry’s 15-year, LimeWire-powered decline. Since 2016, record labels’ sales have increased every year. Last year, streaming accounted for 83% of $12B total US music sales. But the “Big 3” record labels — __Universal__, __Sony__, and __[Warner](https://robinhood.com/stocks/WMG)__ — were privately owned until recently. 

- __Hot single:__ Warner Music [went public](https://snacks.robinhood.com/newsletters/1WiwiJZ2IRsY4gKeFWU4um/articles/4sBaguWCpI98yjIJ31UiSz/) last summer on the Nasdaq, but only listed 14% of its shares. Since then, its market cap has nearly doubled to $23B. 
- __Whole album:__ Universal Music listed 60% of its shares. Gaming giant __[Tencent](https://robinhood.com/stocks/TCEHY)__ — which licenses tunes for games —already owned a 20% stake. 
- __Still in the studio:__ Sony Music, valued at an estimated $62B, is still only accessible to investors as part of wider conglomerate __[Sony Group](https://robinhood.com/stocks/SONY)__.

_Getting that musical cheese [Catherine Falls Commercial/Moment via GettyImages]_

Biebs

__The digital economy needs a soundtrack…__ and __TikTok__, __[Peloton](https://robinhood.com/stocks/PTON)__, and Fortnite-maker __Epic Games__ are paying big bucks for the best beats. The opportunity to supply in-app songs is so huge: already, 10% of the total $22B in global streaming sales last year came from partnerships with popular apps. UMG already partners with __[Spotify](https://robinhood.com/stocks/SPOT)__, __[Apple](https://robinhood.com/stocks/AAPL)__, __[Facebook](https://robinhood.com/stocks/FB)__, __[Snap](https://robinhood.com/stocks/SNAP)__, TikTok, and video-sharing app __Triller__. Looking ahead, its CEO expects billions in future deals with makers of smart speakers, connected cars, and social apps. 


Universal Music soars after going public — and TikTok tunes could be its new growth engine

__The Netflix of cars...__ What __[Volkswagen](https://robinhood.com/stocks/VWAGY)__'s going for. This month, the car giant [launched](https://www.volkswagen-newsroom.com/en/press-releases/volkswagen-is-picking-up-the-pace-of-its-business-model-20-and-offering-car-subscriptions-from-today-7442) an electric car subscription service in Germany to accelerate its creatively-named “Business Model 2.0.” Volkswagen's goal: transform from a car manufacturer to a "mobility services provider."

- __For ~$600/month,__ the "AutoAbo" subscription offers access to 2K+ of VW's all-electric ID models.
- __"Everything but the electricity...”__ Sounds like a TJ's seasoning. The subscription includes  insurance, registration, maintenance, and 500 free miles/month. 
- __DTR:__ VW describes the commitment factor as mid-way between leasing and car sharing.

__Flexible like pandemic leggings...__ A typical car lease locks you in for two years. VW's subscription is flexible, with a three month minimum. This week, VW also showed its commitment to *low*-commitment mobility by filing an offer to buy European rental car giant __Europcar__. Europcar's 350K vehicles at airports and train stations could support the expansion of VW's subscription footprint. 

- __By 2030,__ VW says that 20% of its sales could come from newer offerings like subscriptions and car sharing. But it has an [iffy track record](https://fortune.com/2021/07/29/volkswagen-car-rental-company-europcar-uber-competitor-software/) with past attempts. 
- __Flexibility is (car) key:__ “A growing number of people don’t want to own a vehicle permanently," according to VW. 
- That's why car-sharing companies like __Zipcar__ have seen success in NYC and other hubs — and why __Uber__ and __Lyft__ launched car rental services to complement ride-hailing. 


Subscribe

__The new generation is "low commitment"...__ That requires high-flexibility biz models. Even pre-pandemic, Millennials were moving [more often](http://zillow.mediaroom.com/2019-10-03-Millennials-Are-Moving-More-Frequently-Than-Previous-Generations#:~:text=3%2C%202019%20%2FPRNewswire%2F%20%2D%2D,a%20new%20Zillow%C2%AE%20analysis.) than previous generations. During the pandemic, people moved from cities to suburbs and Airbnbs, and from offices to "work-from-anywhere" locales. [70%](https://www.marshalltribune.com/premium/brandpoint/new-survey-how-companies-are-responding-to-the-delta-variant,22645) of US companies will continue offering remote or flexible work options. And over [a third](https://www.salamancapress.com/news/state/report-over-a-third-of-gen-z-and-millennial-workers-are-looking-for-a-new/article_bb774d1c-37e0-5ed8-9f81-e42835d4b505.html) of Gen Z and Millennial workers are looking for new jobs. When you don't know where you’ll be in two weeks, long-term commitments are daunting. Now, more car manufacturers might adopt flexible subscription models. 

Volkswagen launches electric car subscriptions for the commitment-phobic generation

🎶 The J Bieber IPO

__Not the boat that blocked the Suez…__ But this company’s causing big issues, too. Real estate giant Evergrande’s shares sank 10% yesterday, contributing to a global stock plunge. Evergrande is the 2nd largest property developer in China, with a $30B market cap — but it owes $300B to partners. With $83M in payments due on Thursday, analysts worry Evergrande could default and affect the global economy. 

- __1.4M__ = Buyers waiting for their pre-purchased apartments to be built.
- __85%__ = Drop in Evergrande’s stock value in the last six months.
- __$8B__ = How much Evergrande raised this year — just $292B short of its debt obligations.  

__Charge it to the card…__ Evergrande entered the real estate biz right after China embraced private home ownership in 1998, when homes became a symbol of China’s booming middle class. But Evergrande borrowed heavily to grow, which led to a cash crunch when regulators started cracking down on debt last year. Evergrande has asked employees for loans and tried to pay bills with half-built houses. Now, all eyes are on regulators:

- __It wouldn’t be China’s first bailout…__ Regulators took over the once-thriving Anbang Insurance Group three years ago due to massive IOUs.
- __Too big to (fully) fail...__ Regulators let Evergrande renegotiate payment deadlines earlier this month, signaling their willingness to keep the company alive.

Bills

__It’s not the whale, it’s the splash…__ If a big fish like Evergrande goes belly up, its lenders and investors — including HSBC, BlackRock, and UBS — could lose big money. Businesses that work with it could also suffer (think: paint suppliers). But the ripple effects could be worse: Since three-quarters of China’s wealth is in real estate, Evergrande’s collapse could cause stock sell-offs across China’s real estate sector — or potentially a global sell-off, like Lehman Brothers’ collapse did in 2008. But, some analysts don’t expect Evergrande’s financial struggles to trickle into other parts of the world.

Chinese real estate giant Evergrande could cause global turmoil if it can’t pay its bills

__A Royal Flush…__ Netflix has taken its obsession with royal titles into the real world, bringing home the most gold at Sunday’s Emmy awards. For the first time,  streaming services won the most coveted categories, like Best Drama and Best Limited Series. 

- __Netflix__ won a whopping 44 Emmys for its original shows including “The Crown" and “Queen’s Gambit,” tying a record last set by CBS more than 40 years ago. 
- __AppleTV+__ became the first streamer to win Best Comedy for “Ted Lasso.” It was only the Fruit’s second-ever Emmy appearance.  
- __Disney+__ received 71 nods but only got the primetime gold for “Hamilton.”
- __HBO & HBO Max__ snagged 19 wins, including four for crime series “Mare of Easttown,” starring Kate Winslet.  

__Virtual rewind…__ Netflix first made its mark in 2007 when it ditched DVDs for digital play buttons. In 2013, its show "House of Cards" became the first online-only TV series to nab a primetime Emmy, setting the stage for other streamers. Fast-forward:

- __In 2019,__ Disney+ and AppleTV+ made their streaming debuts with originals like “The Mandalorian" and “The Morning Show.” Last year, HBO Max debuted with 10K hours of shows.
- __This year,__ director Steven Spielberg, who once tried to boot Netflix from the Oscars, inked a multi-year production deal with the Flix this summer.


_Netflix takes home the crown [roman makhmutov/Moment via GettyImages]_

Flixy

__(Original) Content is King…__ and streamers are serving it like royal scones. Streamers have prioritized original content as a way to dominate a field once ruled by Hollywood OGs. This year, the Flix will spend $17B on original content, up from $11.8B last year. Meanwhile, Amazon’s total content spend hit $11B last year. Netflix also plans to make 90 original films per year –3X more than Lionsgate’s most productive year. Beyond scale, Netflix has data on your viewing habits, plus a smart recommendation engine to keep you clicking “next."

Netflix reigns supreme at the Emmys as streamers double down on content at scale

⭐️ The streaming Emmys

__Self-absorbed shopping spree...__ Last week, __[Microsoft](https://robinhood.com/stocks/MSFT)__'s board [approved](https://www.wsj.com/articles/microsoft-plans-60-billion-share-buyback-program-raises-dividend-11631720770) a plan to buy back as much as $60B of the company's own stock — the software giant's largest share repurchase program *ever*. Stock buybacks are (kind of) like gifts to shareholders: by reabsorbing their own shares, companies can potentially improve their stock prices by reducing the number of available shares. 

- __When shares outstanding decrease,__ investors' ownership in the company pie can increase. Think: owning 1 share out of 10 total, vs. owning 1 out of 5. 
- __Slightly awk:__ Microsoft shares are already sitting near records, and have soared 38% this year. But it's *also* sitting on a $130B cash pile, so it has money to spend. 

__Takeout or delivery?...__ Corporations have different options when it comes to spending extra $$$. They can invest it back into the business (think: hiring, R&D, building factories) — *or*, they can return value to shareholders through dividends and stock buybacks. Microsoft has used its ginormous cash pile to fund acquisitions, boost dividends, *and* do buybacks. Many companies flush with excess cash are doubling down on buybacks, too. 

- __Spending on buybacks increased much faster__ than capital expenditures (think: buildings, equipment) in the first half of 2021.
- __S&P 500 companies spent *more* on buybacks__ than on capital expenditures in the first half 2021. Share repurchases hit $370B, up ~30% from the first half of 2020. 
- __For example:__ __[Lowe's](https://robinhood.com/stocks/LOW)__, which thrived on the DIY [House Hype](https://snacks.robinhood.com/newsletters/7Fl0kcKPHzNEVEVwnee0Zp/articles/3djXYQJYytx1qKMDTR9yG1/), spent $6B on share repurchases — compared with barely $850M on capital expenditures. __[Target](https://robinhood.com/stocks/TGT)__, another corona-conomy thriver, recently [announced](https://www.marketwatch.com/story/target-earnings-and-revenue-beat-expectations-11629283071#:~:text=Target's%20board%20has%20authorized%20a,end%20of%20the%20second%20quarter.) *$15B* in buybacks.


Back

__The Big Buyback relates to the Big Shortage...__ Many US businesses are cash-rich, thanks to low interest rates on debt and strong earnings fueled by economic recovery. The problem: supply and labor shortages are limiting *how much* companies can invest back into their businesses. But the Big Buyback, which could be contributing to soaring stock prices, could hit speed bumps ahead: Democratic senators just [proposed](https://www.forbes.com/sites/jonathanponciano/2021/09/10/a-2-tax-on-stock-buybacks-is-being-proposed-by-democratic-senators-to-offset-their-35-trillion-budget-plan/?sh=7424ec77270c) a 2% tax on corporate buybacks to help fund the $3.5T US budget bill.


The Big Buyback: Microsoft is splurging $60B on its own shares, and it’s not the only one

__To boost or not to boost...__ With 65% of US adults fully vaxxed and Delta cases surging, President Biden hoped to start distributing __[Pfizer](https://robinhood.com/stocks/PFE)__ booster shots *this week*. But on Friday, scientists overwhelmingly [advised](https://www.nytimes.com/live/2021/09/17/world/covid-delta-variant-vaccine) the FDA *not* to recommend boosters for the general public — only for people 65 and older, and those at high risk. Third shots are already controversial since many countries still don’t have *first* shots. The FDA’s final decision on boosters is expected this week, and it usually follows scientists’ counsel. 

__Nemo’s loving the WiFi...__ __[Google](https://robinhood.com/stocks/GOOGL)__ just [completed](https://www.cnet.com/tech/google-finishes-3900-mile-subsea-cable-connecting-us-to-uk-and-spain/) a 3.9K mile-long undersea internet cable between the US and Europe. Since [98%](https://cloud.google.com/blog/products/infrastructure/announcing-googles-grace-hopper-subsea-cable-system) of global web traffic flows through undersea cables, e-giants like __[Facebook](https://robinhood.com/stocks/FB)__, __[Amazon](https://robinhood.com/stocks/AMZN)__, __[Microsoft](https://robinhood.com/stocks/MSFT)__, and __Huawei__ pay big bucks for bandwidth on shared cables. But Google’s cable is Google-exclusive, and can handle more traffic than all existing cables *combined*. As the cloud computing boom continues, internet giants will either compete to buy more bandwidth — or to build it.



__The Chipotle of homebuilding__... Instead of BYOB, __[Lennar](https://robinhood.com/stocks/LEN)__ and __[KB Home](https://robinhood.com/stocks/KBH)__  help you build-your-own-home. The housing market has been [#thriving](https://snacks.robinhood.com/newsletters/3W8LX1jIAswA4HFNTbvVHO/articles/4Fw8bHVeO2Nn0unnSjroHO/) since millions of Americans ditched city-living for pandemic-friendly suburbia. Demand is still sky high, with housing inventory sitting at 40-year lows. But last month, home sales dropped for the first time in over a year. We’ll see if homes are still booming when Lennar and KB Home, two of America’s largest homebuilders, drop earnings this week.

__Limited breadsticks…__ As eager foodies return to indoor dining, restaurants are having a hard time keeping up with demand. Supply chain and labor shortages have forced some eateries to trim menu items and shorten hours. And many small restaurant owners have [seen](https://www.cnbc.com/2021/09/17/inflation-labor-and-delta-variant-hit-restaurant-owners-goldman-sachs-data-finds.html) a surge in operating costs due to rising prices (#din-flation). Last quarter, __[Cracker Barrel](https://robinhood.com/stocks/CBRL)__ and Olive Garden-owner __[Darden Restaurants](https://robinhood.com/stocks/DRI)__ said sales were almost back to pre-pandemic levels. We’ll see if the rebound continued when they serve up quarterly earnings. 


- __[Flyer](https://snacks.robinhood.com/newsletters/3aWztqHlVK88aCAOHKHyt5/articles/615L4UeXRNrBv69BPlY4ep/):__ Design startup __Canva__ notched a $40B valuation, making it the world’s most valuable female-founded and female-led startup.
- __[Hike](https://snacks.robinhood.com/newsletters/6273N36MQkF8DmmFKWXxCz/articles/2ocN7ACZMnCJkI07wU92mq/):__ House Dems proposed a $2.9T tax hike for high earners and big businesses to pay for President Biden’s $3.5T social agenda.
- __[Juicy](https://snacks.robinhood.com/newsletters/3aWztqHlVK88aCAOHKHyt5/articles/4UO2q0R1L2P5z8jG1RFv1f/):__  __Rivian__ became the first to bring a fully electric pickup truck to the consumer market, beating __[Tesla](https://robinhood.com/stocks/TSLA)__, __[Ford](https://robinhood.com/stocks/F)__, and __[GM](https://robinhood.com/stocks/GM)__ — who merely unveiled prototypes.


_Corporate card: would you like $60B buy back? [YuriArcurs/E+ via GettyImages]_

💰 Microsoft's big buyback

__Just got served…__ And not in a yummy way. __DoorDash__ sued NYC over a law that requires food-delivery apps to give restaurants more data about customers ordering dumplings at 10pm. That would potentially enable your go-to pizza spot to deliver to you directly (hold the Dash). It’s the latest in a food feud simmering between delivery giants and NYC. Quick recap:

- __At the start of the pandemic__, NYC capped the fees that __DoorDash__, __Uber Eats__, and __Grubhub__ can charge restaurants at 15% — they were up to 30% — to keep your local spots  alive.
- __This summer__, the City Council made those caps permanent.
- __Early this week__: DoorDash, Uber Eats, and Grubhub sued NYC over the fee limits.
- __Now__: DoorDash sued NYC *again* over a law that requires delivery platforms share customers’ contact info with restaurants. 

__The profits are getting cold…__ Food delivery companies struggled to deliver profits even *before* the pandemic. Now, their fee-skimming biz model is under fire nationwide. DoorDash and Grubhub were sued by Chicago last month for using deceptive fees, and 70 of the 100+ pandemic-era fee caps across the country are *still* in place.

_New lawsuit delivery to: City Hall [Ivan Pantic via GettyImages]_

Served

__Cost effective =/= politically effective…__ In many cities, business isn’t just financial — it’s *political*. NYC loves restaurants because they employ thousands of full-time workers,  promote consumer spending, and generate tax revenue. NYC *doesn’t love* delivery platforms’ treatment of gig workers or its funneling of profits to distant corporate HQs. Since DoorDash and Uber are failing politically in NY, they need help from the courts to keep their businesses cooking. 

DoorDash files a 2nd lawsuit against NYC as the city prioritizes restaurants over delivery apps

__Sustainability is in session…__ Harvard announced it’s officially ending investment ties to fossil fuels after years of pressure from students, staff, and climate activists. Harvard’s $42B endowment fund is the largest of any school in the US — and is bigger than roughly *half* of the world’s economies. 

- __179 to 20__: # of Harvard faculty who voted for and against fossil fuel divestment. 
- __<2%__: Harvard had already ended direct investment in companies that extract fossil fuels, but a tiny percentage was still indirectly invested — now, Harvard’s letting those “[runoff](https://www.thecrimson.com/article/2021/9/10/divest-declares-victory/).” 

__ESG Domino Effect…__ While the sustainability movement appeals to a wide range of people, younger generations have been among the most *vocal* supporters. During a Harvard vs. Yale football game, 200+ students stormed the field to protest the school’s fossil fuel investments. This year, a student activist group filed an official complaint with the state’s Attorney General. Dominos are falling:

- __2020__: The University of California became the largest college to go fossil fuel free.
- __-90%__: How much Stanford has reduced its fossil fuel investments since 2011.


GreenU

__Institutions may have to go green to get peace...__ Harvard’s landmark decision is yet another example of ESG investing's momentum (Environmental, Social, and Governance). As Millennials and Gen Z are expected to inherit $61T over the next 20 years, companies will need to attract their investment bucks. For higher education, ESG may be one way of satisfying climate conscious students while setting the stage for a new wave of endowments. 

The collegiate domino effect: Harvard ups its ESG credentials by divesting from fossil fuels 

🌯 DoorDash delivers a lawsuit

__Presentation deck looking like a Picasso...__ Sydney-based startup __Canva__ wants to make graphic design accessible to non-design pros. You might've used it to create snazzy flyers, Insta carousels, and that presentation you forgot was due yesterday. Those DIY design templates just helped Canva [raise](https://techcrunch.com/2021/09/14/canva-raises-200-million-at-a-40-billion-valuation/) $200M at a whopping $40B valuation, *up from $15B barely five months ago*. 

- __The big $40B:__ With its new valuation, Canva is now the world’s [most valuable](https://fortune.com/2021/09/15/the-rise-of-the-worlds-most-valuable-female-led-startup/) female-founded and female-led startup — and  the world's fifth-most valuable private startup.  

__Like a blank Bob Ross canvas...__ Canva went 0 to 60 real quick. CEO Melanie Perkins and her team launched Canva as a free product in 2013, and eventually introduced "freemium" and enterprise layers. Canva now has: 

- __60M__ monthly users across 190 countries, double what it had just over a year ago. And it's not just individuals looking for design help...
- __500K+__ teams pay for Canva, including corporate giants like Salesforce, Marriott, PayPal, and American. In 2019, Canva [said](https://techcrunch.com/2019/10/16/canva-now-valued-at-3-2-billion-launches-an-enterprise-product/#:~:text=More%20than%2020%20million%20users,to%20be%20on%20the%20platform.) *85%* of Fortune 500 companies use it.
- __$1B:__ Canva has been [doubling](https://www.bloomberg.com/news/articles/2021-09-14/canva-vaults-to-40-billion-value-as-online-collaboration-surges?sref=q3KSFp38) its revenue each year, and is expected to exceed $1B in annualized revenue by the end of 2021.


_The world is your canvas [Westend61 via GettyImages]_

__Canva is fuel for the era of “Tap-anomics”...__  We've gone from in-store shopping, to Instagram shopping. During the pandemic, corporate America realized the importance of tap-ability: the number of "taps" companies receive is closely related to their posts' *aesthetic*. Companies don't need to hire a million pro designers — they just need professional-looking designs that are easy for employees to collab on. That simplicity helped Canva notch its eye-watering valuation. 

Design startup Canva notches a massive $40B valuation in the era of "tap-onomics"

__Sorry, Elon…__ Earlier this week, __Rivian__ produced the first electric truck that will actually end up in customers’ driveways — competitors like __[Tesla](https://robinhood.com/stocks/TSLA)__, __[Ford](https://robinhood.com/stocks/F)__, and __[GM](https://robinhood.com/stocks/GM)__ merely unveiled prototypes. The e-truck startup has raised $10.5B+ from investors including __[Amazon](https://robinhood.com/stocks/AMZN)__ and __Ford__, and is [seeking](https://www.theverge.com/2021/8/27/22644601/rivian-ipo-november-december-filing-amazon-ford) to go public at an $80B valuation. The deets on its R1T pickup:

- __Fully charged:__ The R1T has a range of 314 miles per charge and starts at $68K — a longer range, but higher price tag than most upcoming e-trucks.
- __Fully stocked:__ R1Ts come with off road-ready air compressors, built-in drink coolers, 11K pound towing capacity, and tailgates that can be lifted via app — bound to impress at any MIT tailgate.
- __Ready to roll:__ R1Ts trucks are now certified for sale in all 50 states. Rivian expects deliveries to start this month.

__A truckload of competition…__ Some analysts expect the e-truck industry will more than double between 2020 and 2026. Large automakers like __Ford__, __GM__, and __Tesla__ have spent years developing smaller EVs. But by staying laser-focused on trucks, Rivian crossed the e-truck finish line first. Others are expected to follow:

- __Tesla__ expects to start production of its $40K __Cybertruck__ in 2022.
- __[Lordstown](https://robinhood.com/stocks/RIDE)__ plans for limited production of its $55K __Endurance__ this month. 
- __GM__ says production of its $113K __Hummer EV__ will begin later this fall.
- __Ford__ hopes to start producing its $40K all-electric __F-150 Lightning__ in 2022. The *non-electric* version has been America’s top-selling vehicle for 39 years straight.


__Trucks could be the real EV ambassadors…__ America may be the home of the brave, but it’s also the land of the F-150. Pickup trucks accounted for *half* of the US auto industry’s top 10 best-selling vehicles last year, and the three best-sellers were *all* pickups. The best bet for automakers to pull Americans into an EV future could be towing them there... with e-pickups. If the US builds as many EV charging stations as Biden hopes, the success of e-truck makers may come down to pricing, timing, and range.

Rivian is the first to bring an e-pickup to market — but the truck wars are just beginning

🖼 Canva's big $40B

__13th time’s the charm…__ Is it though? __[Apple](https://robinhood.com/stocks/AAPL)__ dropped a new iPhone at its [launch event](https://www.cnbc.com/2021/09/14/apple-event-iphone-live-updates.html) yesterday, but Fruit-heads hoping for dazzling news iProducts may be disappointed by marginal upgrades. A few highlights: 

- __Oscar-level selfies:__ iPhone 13 features improved cameras with cinematic video features, better graphics, and a bigger battery. Price didn't budge: still $799 for the mid-range — or $33/month in installments. 
- __Fewer ways to lose your stuff__, thanks to new accessories, like a leather MagSafe wallet that connects to Apple’s “Find My” network.
- __More ways to sweat__ using the new Apple Watch 7, including Group Fitness classes, a calorie tracker for indoor cyclists, and a new crash alert system for outdoor bikers. 

__The apple of Apple's eye…__ Still iPhone. iPhone sales make up over half the Fruit's total, though they slowed in 2019 and 2020. This year, sales soared as the new 5G-enabled 12 fueled an upgrade cycle. While iPhone sales have slowed quarter-to-quarter, Apple is hoping the new model + jacked-up services will rev up demand for its precious hardware. 


_It's a bigger battery [Klaus Vedfelt/DigitalVision via GettyImages]_

Club

__Easier to walk in, harder to leave…__ By keeping iPhone prices flat and offering accessible installment payment options, Apple’s making it easier to walk into “Club Apple.” And it's making it harder *to walk out*. Apple is expanding its connected ecosystem, getting customers hooked on original content like *Ted Lasso* and services like Fitness+. That way, the world’s most valuable company could continue growing with some relatively simple additions.

The iPhone 13 may not be a jaw-dropper, but it's still getting harder to leave Club Apple

__Lay down the stats…__ Hispanic and Latino Americans are still far from the pandemic recovery finish line. The community has been disproportionately affected, both from economic and health standpoints. Latinos account for [over half](https://www.nbcnews.com/news/latino/latinos-account-half-countrys-population-growth-rcna1667) of the US' population growth over the past decade, and make up ~18% of the total population — but represent nearly [30%](https://www.tampabay.com/news/2021/08/05/new-study-affirms-that-pandemic-hits-hispanics-harder-than-others/) of coronavirus cases.

__The pandemic effect…__  Hispanics have a [higher](https://www.cnbc.com/2021/08/06/unemployment-rate-falls-but-is-higher-for-black-and-hispanic-workers.html) labor force participation rate than any other US demographic. But Covid sparked a sharp surge in unemployment — and the economic effects still linger today. That’s partly because Latinos are disproportionately represented in industries that were hardest hit, like restaurants and hotels. With Hispanics already earning [26%](https://www.cnbc.com/2021/08/06/unemployment-rate-falls-but-is-higher-for-black-and-hispanic-workers.html) less than their white counterparts pre-pandemic, elevated unemployment has been even harder to endure financially. 

- __Today:__ While the Latino unemployment rate is falling, it was [6.4%](https://www.cnbc.com/2021/09/03/black-unemployment-rises-in-august-jobs-report.html) in August — compared to 4.5% for white Americans, 4.6% for Asian Americans, and 8.8% for Black Americans. 
- __Still…__ Over the course of the pandemic, Latinos have become [more optimistic](https://www.pewresearch.org/race-ethnicity/2021/07/15/for-u-s-latinos-covid-19-has-taken-a-personal-and-financial-toll/) about the country's direction and the situation of US Latinos.  
- __As one of the largest and fastest-growing__ populations in the US, the Latino community has seen major economic growth over the past decade.


__There's more growth ahead…__ Hispanic Americans saw [faster](https://www.bloomberg.com/opinion/articles/2020-10-06/hispanic-american-incomes-rising-faster-than-any-other-group-s?sref=q3KSFp38) income growth than any other major demographic group from 2014 to 2019. Despite pandemic challenges: in the past two-years, Latino-owned businesses grew revenue at an average rate of [25%](https://www.nbcnews.com/news/latino/latino-owned-businesses-are-seeing-record-growth-big-banks-are-n1256884) per year, vs. 19% for white-owned businesses. The young and educated Latino labor force is expected to continue driving growth for the US economy. Case-in-point: If the US Latino market was its own country, it'd be the [8th-largest](https://www.forbes.com/sites/seansalas/2020/09/27/the-26-trillion-us-latino-market-the-largest-and-fastest-growing-blindspot-of-the-american-economy/) economy in the world. 


The pandemic effect on Hispanic Americans: looking back, and looking forward

🍎 Apple's new(ish) gadgets

__VIP pug life…__ A bombshell WSJ [report](https://www.wsj.com/articles/facebook-files-xcheck-zuckerberg-elite-rules-11631541353) revealed __[Facebook](https://robinhood.com/stocks/FB)__ rolled out the moderation red carpet for at least 5.8M celeb users — including Donald Trump, Elizabeth Warren, soccer star Neymar, and even Doug the Pug. The drama revolves around a secret program known as “XCheck,” which shields millions of VIP users from FB's normal moderation process — kind of like an invisible verified badge. 

- __For "regular" users,__ AI usually scans posts for rule-breaking content and quickly removes it if there’s an infraction. Meanwhile...
- __XCheck accounts__ are placed on a "whitelist" that allows them to post without the same level of scrutiny or repercussions (the moderation equivalent of bottle service).

__Reporting politicians...__ It happens. Famous people get reported more than Berta from Oregon, even if their posts aren't flag-worthy. XCheck was conceived as a quality-control measure for actions taken against these high-profile accounts. 

- __The problem:__ XCheck only reviewed A-lister content *less than 10% of the time*, according to WSJ. For example: In 2019, Neymar posted naked images of a woman who accused him of sexual assault. 
- __Due to XCheck bias,__ 56M Facebook and Insta users saw the post before it was finally removed. While FB admits XCheck has flaws, it’s still not technically liable for its users' posts because of [Section 230](https://snacks.robinhood.com/newsletters/34Yw0kPPDSo5aJBnQRKCXN/articles/5pdRGmSLIP5qovztp6wkY/). 


_XCheck status [Hill Street Studios/Stone via GettyImages]_

Celeb

__This drama adds fuel to the fire…__ the *big*, familiar fire. Social giants like FB and __[Twitter](https://robinhood.com/stocks/TWTR)__ have been accused of letting abusive content run rampant, not applying moderation policies equally, and acting more like editors than social platforms. The mishandling of XCheck gives ammo to legislators who’ve argued for years that social giants should bear more liability for users' posts. TBD if they ever will.

Facebook's secret moderation program exempts some celebs from usual posting restrictions

__A taxing weekend…__ House Democrats [proposed](https://www.wsj.com/articles/democrats-release-details-of-tax-increase-11631539532) a plan to raise up to $2.9T in tax dollars over the next 10 years, the biggest tax hike in decades. The goal: pay for Biden’s ambitious $3.5T plan to expand America’s social safety net and combat climate change. Lawmakers plan to vote this week on the proposals. Whose taxes would be affected:

- __Individuals__ who make $400K+ per year and married couples that make $450K+ would pay higher taxes on income and capital gains — nearly 40% on income vs. the current 37%.
- __Corporations__ that make more than $5M in income/year would pay a 26.5% tax rate, up from  21%.
- __Small businesses__ that make less than $400K/year would pay *lower* taxes (18%). 

__9 am hike up Capitol Hill…__ Expect some sweat. Democrats don’t need Republican support to pass the plan — but they’ll need just about every Dem vote. Progressives are committed to the plan, even though the tax hikes aren’t as high as Biden's original pitch. But some moderates like Joe Manchin aren’t sold. 

- __Pros:__ The plan could raise trillions of dollars to rebuild America's aging infrastructure, fight climate change, invest in public housing, and expand public education.
- __Cons:__ It could stifle economic growth — think: reduced corporate hiring and investment. The US could also [lose](https://snacks.robinhood.com/newsletters/2FGYY02td4t3rp9KjKvLQM/articles/1d7eiIZp8iwgUI9aKXGIQZ/) corporate investment activity to countries with lower tax rates. 

Hike

__Higher corporate taxes = lower corporate profits…__  which could mean falling stock prices, at least in the short term. Stocks soared in 2017 when ex-President Trump cut corporate taxes, making companies more profitable overnight. Biden’s tax increase would partially roll back those cuts, reducing the cash companies keep as profit. Since stock prices often reflect investors’ expectations of future returns — think: dividends, cash flow, rising prices — lower profits could mean lower expectations.