__Cookie Monster goes on a diet...__ __[Google](https://robinhood.com/stocks/GOOGL)__ is Earth's biggest digital advertiser. In 2020, it accounted for 52% of the world's digital ad spend (FYI: *$292B*). But it's making some privacy changes that'll reduce its precious targeting abilities. 

-  __Last year,__ Google said it would remove third-party cookies from Chrome  by 2022. These tiny pieces of data are widely used to track your individual browsing activity from site to site.
-  __*Yesterday,*__ Google [said](https://blog.google/products/ads-commerce/a-more-privacy-first-web/) that it *won't* introduce new ways to track individual browsing once cookies are gone. 

__That's the way the cookie crumbles....__ Well, at least the third-party cookie. Google isn't scrapping *first*-party cookies, which are meant to be used on the same domain they're placed on. They're why you don't need to log in each time you open Gmail (cookie remembers). Google will still track your Search history, and target ads/results there — same goes for YouTube. But when you visit BuzzFeed, Google won't target ads based on your "organic cat food" search.

- __Google isn't getting rid of tracking:__ That would kill its biz. Instead, it could use aggregated, anonymized tracking to target without *individual* info. One of Google's solutions includes putting people into groups based on similar browsing behaviors. 


_Advertisers love that cookie magic_

Track

__Google thinks the benefits outweigh the losses...__  and it could be right. Individualized tracking has come under fire by regulators and privacy advocates. This could be a move to get ahead of regulation — and win points with the public. Plus, Google's biz likely won't take a major hit thanks to the alternatives it's cooking up: with group-based tracking, Google [says](https://www.cnbc.com/2021/01/24/google-extremely-confident-about-third-party-cookie-alternatives-.html) advertisers can expect at least 95% of the conversions per dollar spent (compared to cookie-based advertising). Wall Street isn’t worried, either: Google shares fell only 1% more than the  market yesterday.


Google will stop using your individual browsing history to sell targeted ads

__And the Oscar for best NYSE debut goes to...__ *not* __[Oscar](https://robinhood.com/stocks/OSCR)__. If the __[Airbnb](https://robinhood.com/stocks/ABNB)__ and __[DoorDash](https://robinhood.com/stocks/DASH)__ IPOs were [blockbusters](https://snacks.robinhood.com/newsletters/3dRtKJ3pIUtnX1yDSLVTJY/articles/47zqImTPv4BiAjpmDbiqv4/), Oscar's IPO was more like a low-key Hulu flick. The Millennial-focused health insurance startup (you can tell by the [font](https://www.hioscar.com/)), saw its share close down 11% from their IPO price yesterday. Oscar is similar to __[Lemonade](https://robinhood.com/stocks/LMND)__, except Lemonade offers home/renters insurance. Oh, and Lemonade's stock [doubled](https://www.cnbc.com/2020/07/02/tech-ipos-getting-mispriced-as-lemonade-and-agora-double-in-debuts.html) on its first trading day (womp). Both are putting a friendly face on insurance — but Oscar has a harder task. 

__American health insurance is infamously complex...__ You could go to med school in the time it takes to understand insurance plans. Oscar's trying to make it simple, affordable, and personal — especially for people who *aren't* insured through employers. It now has 529K members. 

- __How it started:__ Oscar was cofounded by Josh Kushner in 2013 to complement Obamacare. The founders believed it would thrive on Obamacare exchanges, where people compare and pick plans.
- __How it's going:__ Not so hot. Oscar's 2020 revenue fell 5% from 2019, and it *lost* $407M (almost as much as its sales). 


Insure

__Oscar needs "gigification"...__ It's banking on  continued growth of the American gig economy. Its core customers *don't* have employer insurance. Think: DoorDash drivers, freelance writers, and part-time sitters. Oscar has a few things working in its favor. The gig economy [scored](https://snacks.robinhood.com/newsletters/7jMUu1TK8PviqbKCFjQhjC/articles/f06IOakKwXbXOcwTVNbjX/) a huge victory in November when CA voters said "Yes" to Prop 22. Now, companies like Lyft don't have to reclassify gig drivers as employees, which would've meant providing health insurance. Also: 10M+ Americans are still unemployed, and many are turning to side jobs like food delivery. 

Oscar, the "Obamacare stock," plunges after going public — it needs the gig economy 

Dow Jones

S&P 500

Nasdaq

Bitcoin

🕵️‍♀️  Google's cookies crumble 

__Bullseye...__ If you're feeling down, just Google pictures of __[Target](https://robinhood.com/stocks/TGT)__'s bull terrier puppy [mascot](https://corporate.target.com/article/2018/12/green-monday).  Target's sales jumped a record 20% last year to $94B. Wild stat: 2020 sales grew $15B+ from 2019 — that's more than Target's total sales growth *over the last 11 years*. Tarjay [says](https://www.wsj.com/articles/pandemic-boosts-targets-growth-at-rivals-expense-11614684877) it snagged $9B in sales from competitors. Online order pickup and delivery crushed it: 18% of sales came from digital channels in 2020, doubling from 2019.

__Omnichannel is thriving...__ and thankfully, it's not a new streaming service. Omnichannel = the fancy retail term for a synchronized shopping experience that unites stores, websites/apps, and services. Think: virtually trying on Warby Parker glasses, then picking them up in-store (or vice versa). Target has been working on its omni strategy for years, and stores are a key part of that: 

- __1.9K:__ Instead of splurging to build warehouses, Target mainly uses its 1.9K US stores as hubs for shipping and pickup (unlike Amazon).
-  __95%__ of sales came from stores in 2020, including online orders. That sweatsuit you ordered likely came from the Tarjay down the street.
-  __$4B:__ How much Target will invest into brick-and-mortar stores each year to speed up its online-order capabilities.


_If Target launched streaming: "Let's go with Omnichannel+"_

Omni

__Stores are Target's leg up over Amazon...__ Target customers who shop in multiple channels (like in-store *and* delivery) spend ~4X more money on average than customers who shop only in-store — *and nearly 10X more than online-only customers*. There are cost benefits, too: in 2019, Target's move to store fulfillment slashed costs by 40%. __[Walmart](https://robinhood.com/stocks/WMT)__ has been leaning into this strategy, turning some of its 4.7K US stores into fulfillment centers. Stores give Target and Walmart an omni edge that __[Amazon](https://robinhood.com/stocks/AMZN)__ mostly lacks — especially as people start to leave the house.


 Target leans into an anti-Amazon strategy after a record sales year

__Cold towel, hot water...__ __[One Medical](https://robinhood.com/stocks/ONEM)__ is kind of like the Equinox of primary care ($200/year membership fee). The app-based concierge healthcare company went public last year, with the goal of "making people fall in love with their doctor's office." We know it loves Millennials, since it mentioned "delight" seven times in its IPO filing (more than "doctor"). Now it's dealing with some undelightful attention. 

- __The bad:__ One Medical has allegedly been letting ineligible patients and wealthy VIP clients cut the Covid vaccine line, [according](https://www.npr.org/2021/02/24/970176532/high-end-medical-provider-let-ineligible-people-skip-covid-19-vaccine-line) to NPR.
- __The ugly:__ Congress is now [investigating](https://www.cnbc.com/2021/03/02/house-panel-investigates-one-medical-for-allegedly-letting-clients-cut-covid-vaccine-line.html) the allegations. One Medical stock has plunged 15% since the NPR report dropped mid-last week. 

__The response...__ One Medical pushed back, saying that it doesn't "broadly and knowingly disregard eligibility guidelines." It also says it fired staff members that had glossed over eligibility rules. That didn't spare it from backlash: Washington state and five Bay Area counties have stopped sending vaccines to One Medical. The SF Department of Public Health went a step further, asking it to *return* 1.6K doses of the Pfizer vaccine. 


__Vax distribution already has an equality problem...__ If One Medical is exploiting the (federally funded) vax rollout for its own biz interests, it's making the inequality worse. The vaccine is still scarce, and [67%](https://covid.cdc.gov/covid-data-tracker/#vaccination-demographic) of people who have been vaccinated in the US so far have been white. On the bright side: __[Johnson & Johnson](https://robinhood.com/stocks/JNJ)__'s game-changing [one-shot](https://snacks.robinhood.com/newsletters/6jwYdiy4al8n5v0GOdIik/articles/7kSxhWesI8SzTyVJS53x2B/) vaccine has started rolling out, and President Biden just said the US will be able to vax all adults by the end of May. But if the One Medical allegations are true, that could limit (or end) its vax involvement. That could hurt its growing biz and its stock price.


One Medical allegedly let VIPs skip the vaccine line (spoiler: the stock plunged)

🎯 Target's anti-Amazonian strategy 

__Like Game of Thrones...__ but for the plant-based world. Some major alliances have recently formed in the alt-food market. __Oatly__, the oat milk brand that craft coffee shops brush their teeth with, just snagged one of the highest honors in "mainstreamification": a nationwide rollout at __[Starbucks](https://robinhood.com/stocks/SBUX)__. 

- __DTR:__ Starbs has been testing Oatly at its stores in the Midwest, and even brought it to 4.3K Chinese locations. With the nationwide rollout, the Swedish oat brand is getting a major validator ahead of its recently announced IPO(at). 

__On the patty side...__ __[Beyond Meat](https://robinhood.com/stocks/BYND)__ just signed big deals with __[McDonald’s](https://robinhood.com/stocks/MCD)__ and __[Yum Brands](https://robinhood.com/stocks/YUM)__, the owner of KFC, Taco Bell, and Pizza Hut. Think: McPlant Burgers for MickeyD's, and plant-protein pizza toppings and alt-chicken for Yum Brands. Beyond has been beefing up its presence: in January, it teamed up with __[Pepsi](https://robinhood.com/stocks/PEP)__ for plant protein drinks and snacks. In 2019, it launched a Beyond Sausage breakfast sammie at 9K __Dunkin'__ locations. During the pandemic...

- __Restaurant plays didn't really pay off:__ Beyond's US restaurant sales plunged 43% last quarter from 2019, as you swapped Dunkin' sandwiches for Quaker Oats.
- __Grocery plays *did*:__ Beyond's US grocery sales popped 76%, as it expanded to more locations (including 2.4K Walmarts). To capitalize on the home life, Beyond offered more affordable patty packs to compete with beef prices.


__Beyond is a "double-dip" brand...__ and Oatly is now following its playbook. There aren't many food brands that you recognize both in the grocery aisle *and* on the restaurant menu (besides alcohol). With their strong brand recognition, Oatly and Beyond have the power to be both restaurant and grocery staples. They can rely on grocery stores when restaurant sales are down, and vice versa (aka: pandemic/recovery hedge). While Beyond has snagged more partnerships, Oatly is following its lead with this Starbs deal.


Oatly and Beyond Meat snag deals with major restaurant chains (they're hedging)

__Could buy a beachside condo...__ for the price of one __[Berkshire Hathaway](https://robinhood.com/stocks/BRK.A)__ Class A share (*~$378K* for BRK.A, ~$250 for BRK.B). Warren Buffett's legendary holding company owns businesses like Geico and Dairy Queen, and has major investments in companies like Coke and Amex. Buffett is the OG financial influencer (#finfluencer): for decades, investors have closely followed his moves.  Which brings us to...

- __Buffett's famous annual letter__ to shareholders was [released](https://fm.cnbc.com/applications/cnbc.com/resources/editorialfiles/2021/02/27/2020ltr.pdf) Saturday. It earned $42.5B in 2020, including realized and unrealized capital gains from investments. That's about half of what it earned in 2019. 
- __Back to benchmark:__ Berkshire compares its stock performance to the __[S&P 500](https://learn.robinhood.com/articles/7kFFEUv46vmMCmMfLuNiRX/what-is-the-s-and-p-500/)__ index, which is used as a benchmark for the overall market. In 2020, the S&P 500 rose ~16% — *Berkshire shares rose ~2%*.

__Playing it safe(r)...__ Berkshire has ~$138B in cash, but it didn't make any major acquisitions in 2020. It took big stakes in __[Chevron](https://robinhood.com/stocks/CVX)__ and __[Verizon](https://robinhood.com/stocks/VZ)__, but stayed away from the blockbuster deals that made it famous. *Instead*, Berkshire bought back a record ~$25B of its own shares last year. Stock buybacks are kind of like presents to shareholders. By reabsorbing their own shares, companies can improve their stock prices by reducing the number of available shares — and increasing shareholders' ownership.


Omaha

__Buffett invests in what he *knows*...__ and he doesn't really know software and high tech. Rule #5 of Berkshire's acquisition [criteria](https://www.berkshirehathaway.com/2000ar/acq.html): it invests in "simple businesses (if there's lots of technology, we won't understand it)." Berkshire *does* have a giant stake in __[Apple](https://robinhood.com/stocks/AAPL)__, and took a small(er) $735M stake in cloud company __[Snowflake](https://robinhood.com/stocks/SNOW)__ last year. But for the most part, it has stayed away from tech. Unfortunately for Buffett, Big Tech stocks currently dominate the overall market — *and they rallied big in 2020*. The tech-heavy __[Nasdaq](https://learn.robinhood.com/articles/1GXPrecRfkSNp0aBblBSsL/what-is-the-nasdaq/)__ index soared 43% last year, compared to BRK's ~2% gain.

Berkshire Hathaway invests a record amount of money... into itself 

"_Show us the Oatly_"

🔮 Buffett gives (buy)back

__Who ya got?...__ __[DraftKings](https://robinhood.com/stocks/DKNG)__ doesn't miss the days when Russian ping pong was the biggest live action on TV. Now, every major sports league is back in (bubble) action, and the sports betting app's shares have nearly 4X'd over the past year. Also helpful: 20 states (plus DC) have legalized online sports betting, and more are working on it. On Friday, DraftKings shares popped 6% after it raised its revenue outlook for 2021 and delivered strong sales:

- __2X:__ DraftKings' revenue more than doubled compared to the same period in 2019, as people hit the screens instead of the stadiums.
-  __$65:__ The average revenue DraftKings made per monthly user, up from $42 in 2019. It had ~1.5M monthly paying users last quarter.

__Love don't cost a thing...__ but attention does. DraftKings now says it's the top iGaming operator in the US, but that flex-worthy title comes at a price: DraftKings spent nearly $500M on sales and marketing in 2020 — *that's ~80% of its revenue for the year*. It basically spent 80 cents for every $1 of sales it brought in. Think: commercials, FB ads, and $500 sign-up bonus promos. While that helped it grow sales and users, DraftKings *lost* ~$844M for the year.

- __Airbnb is taking the *opposite* approach:__ In 2020, Airbnb pulled back on all marketing because its bookings took a pandemic plunge.
-  __Then something weird happened:__ Airbnb's site traffic bounced back to 95% of 2019 levels *without* any marketing spend. Last quarter, 90% of Airbnb's traffic was unpaid.
-  __Now,__ Airbnb CEO Brian Chesky says the company will never spend as much on marketing (as a % of sales) as it did pre-pandemic.


_DraftKings spends it like Beckham_

Score

__"Go-to" marketing is the best marketing...__ DraftKings has serious competitors like __FanDuel__, __[William Hill](https://robinhood.com/stocks/WIMHY)__, and __[Penn National Gaming](https://robinhood.com/stocks/PENN)__. Meanwhile, Airbnb is the clear go-to when people look for short-term rentals. Chesky thinks Airbnb doesn't need all that marketing, because "it's a noun and a verb in pop culture" (#flex). Companies like DraftKings and DoorDash rely on expensive promos to snag customers from competitors, but that "loyalty" can fade easily. Having "go-to" status reduces the need for marketing, increasing the chances of profitability.

DraftKings crushed sales, but it has a marketing reliance problem

__Screenshot these numbers...__ __[Snap](https://robinhood.com/stocks/SNAP)__ shares soared to a record on Wednesday after it updated investors about its biz. Snap [expects](https://snacks.robinhood.com/newsletters/6ayK3gl1rqepiw8vkFk0FE/articles/1w3MRpNTnNQjpGR8ALRL7z/) 50% annual sales growth for the next few years (music to investors' ears). With 265M daily users, Snap says it reaches 90% of 13- to 24-year-olds in the US. Investors also liked Snap's new strategy to grow ad sales in *non*-messaging features, like Snap Map. 35M businesses are already on Map, and Snap will continue Yelp-ifying to drive sales. With a growing mix of products, investors think Snap is past its pics-only tween stage: shares have more than 4X'd over the past year.

__*Not the band*...__ But if __[Carvana](https://robinhood.com/stocks/CVNA)__ had a theme song, it would be "Come as You Are." The online used-car seller saw its shares jump 8% after earnings on Friday. Carvana's quarterly sales jumped 65% from 2019, and profit soared 71% to an impressive $244M. People were scared of public transit, and many moved out of cities to WFS (work-from-suburb). That pumped up car demand and prices, *especially* for used cars: used vehicle prices [soared](https://apnews.com/article/prices-inflation-coronavirus-pandemic-united-states-c6f8a2a7cf916cbda0d5f112b1260997) a whopping 14% in 2020. Those increases boosted sales for online car sellers like Carvana and __[Vroom](https://robinhood.com/stocks/VRM)__.

Highs

Who's up...

__Arrived cold...__ __[DoorDash](https://robinhood.com/stocks/DASH)__ shares plunged 18% for the week after it dropped off its first earnings report as a public company. DoorDash [beat](https://www.cnbc.com/2021/02/25/doordash-dash-q4-2020-earnings.html) expectations on quarterly sales, which more than tripled from 2019 as burrito-in-bed replaced Friday night out. But its quarterly loss more than doubled to $312M — that didn't sit well with investors. Also unappetizing: DoorDash expects order volume to fall in 2021 as restaurants reopen and people ditch the bed for the bar.

__Try meditation...__ __[Workhorse](https://robinhood.com/stocks/WKHS)__ had a rough week. The electric van maker saw its stock lose more than half its value over the week. Investors were bummed that Workhorse [lost](https://www.freightwaves.com/news/oshkosh-beats-workhorse-for-postal-service-delivery-vehicle-contract) a key contract to build __USPS__' next-generation of mail trucks. Instead, __[Oshkosh](https://robinhood.com/stocks/OSK)__ will get $482M to assemble 50K to 165K USPS trucks over the next 10 years. Workhorse brought in less than $1M in sales in the first nine months of 2020, so this government contract would’ve made a big difference. BTW: Workhorse reports earnings today.   


Lows

...and who's down

🏈 DraftKings pulls out all the stops

__Signed, sealed, delivered...__ On Wednesday, Biden [signed](https://www.washingtonpost.com/business/2021/02/24/biden-supply-chain/) an exec order to address critical shortages, ordering a 100-day review of the US supply chain. ICYMI: [The Great Chip Shortage](https://snacks.robinhood.com/newsletters/31E6cwe7ndD6pM602Hiv9R/articles/3Nn6tVCu3oGQg2XsCbQmyc/) is causing widespread production issues, especially for tech companies and  car makers. All that WFH'ing has eaten up all the chips, so __[GM](https://robinhood.com/stocks/GM)__ and __[Ford](https://robinhood.com/stocks/F)__ have had to shut down car plants. __[Tesla](https://robinhood.com/stocks/TSLA)__ briefly [closed](https://www.cnbc.com/2021/02/25/tesla-temporarily-halts-production-at-model-3-line-in-california-report.html) its Fremont factory  due to shortages. But...

- __Chips aren't the only issue:__ The review will assess supply chain weak spots for other critical items (Grape-Nuts [not](https://www.usatoday.com/story/money/food/2021/01/27/grape-nuts-shortage-breakfast-cereal-supply-coronavirus-demand/4259281001/) included). Think: medical equipment, pharmaceuticals, raw materials, and EV batteries.
- __The US is the world's largest importer__. In 2019, the US imported $617B more worth of goods than it exported to other countries. The pandemic made everyone more isolated. Now American industry is suffering from a lack of self-sufficiency.

__Worse than the TP shortage...__ The pandemic highlighted the US’ reliance on other countries (especially China) for crucial supplies… and exposed the limits of globalization.  "Crisis mode" demonstrated how harmful that reliance can be:

- __In March,__ the US suffered a serious [shortage](https://snacks.robinhood.com/newsletters/4ccVNBL1WDcK4FkFwPcBis/articles/5oH5trxIDhAhz6R7hhXU2j/) of masks and ventilators. The US had to import at least [half](https://www.washingtonpost.com/health/2021/02/02/medical-mask-shortage/) of its PPE from China, and it still wasn't enough.
- __*Now*,__ there's this chip shortage. But more than 80% of chip production happens in Asia, with China leading the charge. The US is also heavily reliant on China for drug ingredients, electronic components, and "rare-earth elements" used in hundreds of tech products. 


Fried

__The US has entered a Cold Trade War...__ To prevent future shortages, the Biden admin is trying to shore up domestic supply chains and trade with friendlier countries  — instead of introducing new China tariffs like the Trump administration (don't forget the French wine). While Biden [isn't](https://snacks.robinhood.com/newsletters/18OQONWGOCQr3BPWg5Pk03/articles/3jah5iD0LYNNhuXY04QpYJ/) rushing to remove Trump's China tariffs, he’s taking a softer approach. Either way, this exec order isn't a golden fix: assessing supply chain issues is easy, but actually reducing foreign dependence will be one of America’s biggest long-term challenges over the next decade.


President Biden wants to fix the US supply chain (it's not just a chip problem)

__The stats speak for themselves…__ Minorities in America have been disproportionately affected by the pandemic, from both economic and health standpoints. Black Americans are [1.9X](https://www.cdc.gov/coronavirus/2019-ncov/covid-data/investigations-discovery/hospitalization-death-by-race-ethnicity.html#footnote02) more likely to die from COVID than white Americans, and 2.9X more likely to be hospitalized. For Hispanics and American Indians, the rates are even higher. In the first half of 2020, Black men suffered the [largest](https://www.npr.org/2021/02/18/968791431/american-life-expectancy-dropped-by-a-full-year-in-the-first-half-of-2020) decline in life expectancy, which dropped by three years. A few key factors help explain the higher risk:

- __Essential work:__ Black workers are [overrepresented](https://www.businessinsider.com/black-americans-unemployment-coronavirus-layoffs-disproportionately-high-april-bls-data-2020-6) in essential roles, like food service and public transportation, increasing the risk of infection. 
- __Other major factors:__ Crowded housing, inconsistent access to healthcare, and chronic health conditions that increase Covid complications. Also: a history of discrimination and mistreatment in healthcare has contributed to [distrust](https://theundefeated.com/features/new-poll-shows-black-americans-put-far-less-trust-in-doctors-and-hospitals-than-white-people/) in the medical system for many Black Americans. 

__On the financial side…__ The pandemic has had a disproportionate impact on Black business owners. Pre-pandemic, Black businesses were growing 2X as fast as overall businesses in the US. From February to April last year, the number of active US business owners [dropped](https://www.housingwire.com/articles/why-black-owned-businesses-have-been-hit-hardest-by-covid-19/) a record 22%. Black businesses owners took the hardest hit, dropping 41% in those three months.

__Why?...__ Geography and access to capital are key factors. Black-owned businesses are heavily [concentrated](https://www.google.com/url?q=https://apnews.com/article/virus-outbreak-health-new-york-business-u-s-news-ef407b45061d34503fa7413529b3fe04&sa=D&source=editors&ust=1614313922808000&usg=AOvVaw2st2HNB6J9Ri31NxGHyYpe) in Covid hotspots, and entered the pandemic with weaker financials and less access to capital. The financial health of businesses and individuals connects back to the massive [wealth gap](https://snacks.robinhood.com/newsletters/bg6FaCgu8qc8z1Zllmofx/articles/3ZVsKmCRQNLUOSaAVHfNJi/): the typical white family has 8X the wealth of the typical Black family. 


__Equitable vaccine access is key…__ to helping alleviate the impact on minority groups. But so far, the rollout hasn’t been proportional: of the people of known race who have been vaccinated, [64%](https://covid.cdc.gov/covid-data-tracker/#vaccination-demographic) have been white. Just 9% were Hispanic, 6% were Black, and 5% were Asian — and less than 2% were American Indian. Some positive efforts are underway to change this distribution: All 32 NFL teams have offered their stadiums as mass vaccine sites, many of which are close to large Black urban populations. Uber and Walgreens have teamed up to offer free rides to vax appointments for people in underserved communities. And last week, Lyft announced it’s doing the same with CVS.

The pandemic effect: the health and economic impact on Black Americans 

10-Yr US Treasury

_Reopening of Tesla's Fremont plant_

🍟 Biden cooks up a plan 

__Ghosted, then unghosted...__ __[Snap](https://robinhood.com/stocks/SNAP)__ can relate. Two years ago, Snap stock was languishing around $10/share. After going public in March 2017, Snap consistently [failed](https://money.cnn.com/2018/02/06/technology/snapchat-earnings-beat/index.html) to beat earnings estimates for nearly a year. But the little ghost has been wowing investors over the past year, and its shares have more than 4X'd. In 2020, Snap's sales growth was more than 2X  Facebook's (granted: Snap is younger, smaller, and *still unprofitable*). This week...

- __Snap shares soared to a record high__ of ~$73, and its market cap crossed $100B for the first time. [Market cap](https://learn.robinhood.com/articles/GByCbiOluG2kcWs1AF6m5/what-is-market-capitalization/) = the total value of a company’s shares (held by investors and insiders).
- __Driving the moves:__ At its investor event on Tuesday, Snap [said](https://www.axios.com/snap-snapchat-ready-for-profits-e3a6d866-aaa1-46d4-b652-3acc812db198.html) it expects 50% annual sales growth for the next several years. 
- __Wild stat:__ With its 265M daily users, Snap says it reaches *90% of 13- to 24-year-olds* in the US. Call it Gen S. 

__Bring back the rainbow puke filter...__ Investors were also impressed with Snap's new strategy to grow ad revenue in *non*-messaging features (it's not all about Taco Bell face filters). A key growth opportunity: the Snap Map. 

- __Yelp-ifying Snap Maps:__ The map where you stalk your friends' Bitmojis has the potential to bring in big bucks from small businesses. 35M businesses are already on the Map. 
- __Map it out:__ You zoom in to the map and click on Huckleberry Cafe. Snap shows contact info, directions, reviews, and even lets you order via food delivery apps. Businesses can pay to promote their listings, Yelp-style.


Ghost

__Snap is past its tween stage...__ though many of its users aren't. It's maturing into much more than just a place to send double chin pics. Over the past year, Snap has launched new features, from [Mini apps](https://snacks.robinhood.com/newsletters/2FFx07PkihITcdXy20oUUt/articles/f5oNMz0Gj22IuOs59hqQ3/) to Spotlight (a TikTok copycat that has over 100M monthly users). It also plans to [invest](https://www.axios.com/snap-snapchat-ready-for-profits-e3a6d866-aaa1-46d4-b652-3acc812db198.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosam&stream=top) more in content, like original shows for its Discover feed. This different mix of products is key to driving more ad revenue, which Snap badly needs to become profitable.

Snap hits a record high on sales growth and ad strategy (it's growing up)

__The most annoyed-sounding company name...__ __Ardagh Group__ (pronounced: ard-*ugh*?) is one of the world's largest metal and glass packaging companies. Think: Heineken bottles, minus the beer. Now the publicly-traded company is [spinning](https://www.nytimes.com/live/2021/02/23/business/stock-market-today#ardagh-spac) off its can business into *another* public company. The new can-only company is valued at $8.5B. Unsolicited name suggestion: OnlyCans.

- __From soda and beer:__ When Ardagh acquired its canning operation in 2016 for $3B, most of its sales came from big soda and beer companies.
- __To seltzer and 'bucha:__ Today, more than half of Ardagh's $7B in annual sales come from cans for brands like White Claw, Truly, and LaCroix. 

__Weird SPACaging...__ The new company is going public by merging with a SPAC — a company that goes public only to acquire a *real* company. The SPAC is betting on the continued growth of canned drinks, which are more enviro-friendly: aluminum is  easier to recycle than plastic (Ardagh calls it "infinitely recyclable"). OnlyCans has two trends going for it:

- __Short-term:__ Canned-everything. You're not drinking glass bottled beer at the bar — you're cracking open a canned wine at home.
- __Long-term:__ Sustainable-everything. Just this month, Nestle announced it's selling its North American water biz for $4.3B (bye, plastic bottles). 


_Stop trying to make OnlyCans happen_

Canny

__Commodity is hard to conquer...__ Ardagh is selling "shovels" in the seltzer gold rush. But at the end of the day, an aluminum can is an aluminum  can. And Ardagh can't control the price of a commodity like aluminum. Aluminum prices have risen over the past year, partly thanks to the "canned-everything" trend. Aardagh also has to compete on price with companies like __[Ball Corp](https://robinhood.com/stocks/BLL)__, which makes Coke cans. That's likely why Aardagh's profit margin is slim. 

The company that makes cans for White Claw is spinning off on a double trend

👻  Snap puts itself on the Map 

__New haircut?...__ Markets look a little different recently. The tech-stock heavy __Nasdaq__ index is down nearly 5% for the week: strange, since Big Tech has been on a tear over the past year. Also: interest rates are rising from historic pandemic lows. The 10-year Treasury yield (basically: the interest rate the US government pays to borrow money) has risen to its highest level since February 2020. The average interest on a 30-year-fixed-rate mortgage also rose. 

__What's going on?...__ Falling tech stocks and rising interest rates are likely related to one thing: *inflation fears*. Investors are scared that the purchasing power of the dollar will decrease and prices will rise — or, that a $4 coffee today could cost $6 in a year. To help the economy, the Fed has added trillions to the money supply through stimulus packages and bond-buying sprees. And we could get another $1.9T stimulus package soon. That increases cash in circulation, which could boost inflation risk.

- __Why interest rates are rising:__ With so much cash in the system, people are worried that the money they receive in exchange for lending could be worth less in the future. So they’re “demanding” higher rates from bonds.
- __Why tech stocks are falling:__ Rising interest rates can make bonds and savings accounts more attractive compared to riskier assets (like tech stocks). They also increase the cost of borrowing. That can curb profits, growth, and hiring for companies — and result in less consumer spending, which is generally bad for the economy.


Interesting

__Inflation is the Godzilla of finance...__ But we might not have to fear it just yet. Yesterday morning, Jerome Powell said the Fed is committed to its current policy of keeping interest rates low. He’s not immediately concerned about inflation levels, which have stayed relatively low for a decade — he *is* concerned about getting the economy back on its feet. JP's announcement helped calm inflation worries, so tech shares mostly rebounded for the day.


Falling tech stocks, rising interest rates, and inflation fears — how they’re connected

__Say it twice so it sounds cool...__ __[The RealReal](https://robinhood.com/stocks/REAL)__ is the online luxury consignment company that can smell a knockoff Birkin from a mile away. It verifies your fancy second-hand items, prices them, and sells them. But TRR isn't helping you pawn off those $900 Louboutins for free — it takes a big cut of the sale. Despite that...

- __TRR shares plunged 13%__ yesterday after it dropped disappointing quarterly earnings. Sales dipped 10% from 2019, and its quarterly loss more than *doubled*. 

__Now TRR is doubling down...__ on brick-and-mortar stores. The exodus from cities has slashed rent prices, making physical locations more profit-friendly. Last quarter, TRR launched an "innovative neighborhood store format" in Palo Alto, Newport Beach, and Brooklyn. The luxurious locations look like WeWorks merged with airline lounges. TRR is aiming to launch 10 by this summer. But why is an unprofitable, online-focused company splurging on fancy stores?


_The RealReal smells a fake Birkin_

Fashun

__Wear the trend, don’t let the trend wear you...__ With the rise of delivery-everything, it's easy to get sucked into pure ecommerce. But TRR knows its customers — and doesn’t think 100% online is their style. TRR is realizing that pairing digital with physical is better: Buyers who shop in stores *and* online spend 3X more compared to online-only shoppers. And consignors who step into stores bring in 1.5X more product value.


The RealReal is still deeply unprofitable, but it's splurging on physical retail

☎️  What's going on with tech stocks? 

__The LinkedIn of gig work...__ might actually be LinkedIn? __[Microsoft](https://robinhood.com/stocks/MSFT)__-owned LinkedIn is launching a gig marketplace called "Marketplaces" (#creative), [according](https://www.theinformation.com/articles/microsofts-new-gig-a-linkedin-freelancer-market-rivaling-upwork-fiverr) to *The Information*'s PFWTM. "Gig" elicits thoughts of delivery drivers, but Marketplaces is targeted to white-collar pros (like: app developers, marketers, and designers). Users will be able to book freelancers straight through LinkedIn. 

- __Marketplaces is slated to launch this fall__, and is expected to replace LinkedIn's $60/month ProFinder service (a skeletal version of Marketplaces).

__"I just came across your profile"...__ The pickup line of professional networking. It's a good time for LinkedIn to beef up its gig offering: ~10M Americans are unemployed, and many are WFH freelancers looking for gigs. Part-time is the new full-time: the number of gig/contract/freelance workers is expected to [triple](https://www.ft.com/content/92c6d068-384e-11ea-ac3c-f68c10993b04) to 42M this year from 2017. 

- __With its massive network of ~740M users,__ LinkedIn has a leg up over freelance sites like __[Upwork](https://robinhood.com/stocks/UPWK)__ and __[Fiverr](https://robinhood.com/stocks/FVRR)__, which generated a combined ~$550M in sales last year. They take a cut  when people get hired. BTW: both stocks plunged yesterday on the Microsoft report.
- __Marketplaces could be a triple whammy sales puppy:__ More ad sales + more subscription sales + *a cut of hiring transactions*. LinkedIn's huge reach poises it to capitalize on the hot gig market. 

Connection

__LinkedIn is the most mature social network...__ because it's the most diversified. __[Facebook](https://robinhood.com/stocks/FB)__, __[Snapchat](https://robinhood.com/stocks/SNAP)__, __[Twitter](https://robinhood.com/stocks/TWTR)__, and __[Pinterest](https://robinhood.com/stocks/PINS)__ each make more than 90% of their sales from pure ads. LinkedIn makes $$$ from business subscription services (like Sales Navigator), ads for job postings, and LinkedIn Premium (for shameless stalking in private mode). In 2020, it made ~$8.8B in revenue. For reference: that's more than double Twitter's yearly sales, but it's a small fraction of Microsoft's $143B 2020 total. Marketplaces could help it level up. 

LinkedIn is reportedly launching a gig-work marketplace (it’s so mature)

__Blimp-worthy news...__ Yesterday, investors received an invite to the biggest tire wedding in America: __[Goodyear Tire & Rubber](https://robinhood.com/stocks/GT)__ has [agreed](https://www.bloomberg.com/news/articles/2021-02-22/goodyear-agrees-to-buy-cooper-tire-for-about-2-8-billion?sref=q3KSFp38) to buy __[Cooper Tire & Rubber](https://robinhood.com/stocks/COO)__ for $2.8B (conveniently, they have the same last name). It's like the Royal Wedding, but for tires: Goodyear is the largest tire manufacturer in the US, and Cooper is #2. Investors celebrated the power couple:

- __Cooper stock soared 29%__, since Goodyear will pay Cooper shareholders a cash and stock premium  (worth [24%](https://corporate.goodyear.com/en-US/media/news/goodyear-to-acquire-cooper-creating-stronger-us-based%20leader-in-global-tire-industry.html) more than Cooper's closing stock price on February 19th). 
- __Goodyear stock jumped 21%__, since investors think the merger will boost sales and cut costs (#synergy). The deal also strengthens Goodyear's position as #1 in the US, and nearly doubles its presence in China (where car sales are surging again).

__Strength in unity...__  and in cost synergy. The happy couple will shave spend by combining corporate functions, R&D, and procurement. Goodyear expects to save $165M over two years from the merger. No manufacturing jobs or plants are being scrapped... *for now*. But the couple sees an opportunity to combine  production in the future. If approved by Cooper shareholders and regulators, the marriage will be finalized later this year.


_Ready for the Royal Tire Wedding_

Tired

__Scale is key...__ to succeed in a commodities-heavy business. Tires are basic products made of basic commodities: rubber and steel. While you might have a preference between iPhone 12 and Samsung Galaxy S21, tires don't have as many differentiating features/components. So companies compete on price. With this marriage, Cooper and Goodyear can join forces to scale production — instead of trying to beat each other. But we don't yet know how/if this will affect prices for consumers.

The Royal Tire Wedding: America’s largest tire companies tie the rubber knot

🖼  LinkedIn does freelance

__Hair oils are thriving...__  __[Walmart](https://robinhood.com/stocks/WMT)__ posted record sales of $152B last quarter, as we stocked up on groceries and #selfcare goodies. In 2020, Walmart filled *7X* more online orders than in 2019 (curbside pickup FTW). But it's projecting slower growth *this* year, so the stock dipped after last week's earnings. What didn't dip: wages.

- __Walmart is raising wages for 425K workers,__ bumping its employee average to ~$15/hour (up from $14). *But it's keeping its starting wage at $11*.
- __Walmart = America's largest private employer.__ With the raises, about half of its 1.5M US workers will earn at least $15/hour. 

__Sounds familiar...__ The Biden admin is trying to raise the federal minimum wage to $15/hour by 2025 (from $7.25/hour). It's [questionable](https://ktla.com/news/nationworld/biden-acknowledges-dim-prospect-of-15-minimum-wage-in-congress-raising-concerns-among-activists/) whether that'll get through lawmakers. A Congressional study [found](https://www.cnbc.com/2021/02/01/democrats-are-trying-to-pass-a-15-minimum-wage-through-reconciliation.html) that a $15 minimum wage would lift 1.3M Americans out of poverty. The *same* study found it may also leave 1.3M jobless because of higher labor costs. This month, Walmart CEO Doug McMillon met with Biden: McMillon supports raising the federal minimum wage, but hasn't yet endorsed a $15/hour minimum. Still...

- __Walmart has to compete__ with its peers for essential workers, especially in online-order fulfillment roles. That's why the raises are only for frontline associates. 
- __[Amazon](https://robinhood.com/stocks/AMZN)__ (aka: Walmart's biggest rival) raised its US starting wage to $15 back in 2018, and has lobbied Congress for a $15 federal minimum. __[Target](https://robinhood.com/stocks/TGT)__ made $15 its starting wage for all workers in 2020. Why isn't Walmart doing the same?

__Profit margin could be a factor...__ explaining Amazon's and Walmart's different stances on wages. Amazon's biz is mainly online, making it more cost-friendly than Walmart's (which includes 11K+ physical stores). Also: groceries make up more than half of Walmart's sales, and they're harder to profit from than tech. While broccoli has a slim profit margin, Amazon's AWS cloud is its biggest profit puppy.  Walmart did more sales in 2020 than Amazon, but its profit was much *smaller* than Amazon's: on $520B in sales, Walmart made $15.2B in profit — on $386B in sales, Amazon made *$21B* in profit. Walmart's biz is more sensitive to wage increases, but it needs them to compete with the 'Zon. 

Walmart raises wages for 425K employees, but it probably won't outdo Amazon

__You used to ping me on my cell phone...__ Cloud company __[Twilio](https://robinhood.com/stocks/TWLO)__ helps *other* companies talk to customers (think: text notifications, emails, support calls). Twilio's 221K customers [include](https://snacks.robinhood.com/newsletters/6SuaBO3rrBO6Jk36GEj3oC/articles/ZDMeTAELMugKjh7xmTgWK/) Uber, Instacart, DoorDash, and Netflix (all those password reset emails). It's a good time to be in remote comms: Twilio shares jumped after it reported expectation-crushing earnings on Wednesday (feat. a surprise adjusted profit). Both sales *and* customer growth accelerated from the previous quarter, and revenue jumped 65% from 2019.

__The Tractor Factor...__ __[John Deere](https://robinhood.com/stocks/DE)__ stock soared to a fresh record last week on killer earnings. Last quarter, Deere's profit more than doubled from 2020 as farming and construction perked up. Sales popped 23%, partly thanks to an efficient new operating strategy. The construction icon could benefit from President Biden's "Build Back Better" plan, which pledges to mobilize American manufacturing for a modern infrastructure (think: roads, bridges, buildings). Deere boosted its forecast for 2021, expecting greener pastures ahead.

__*Homeland*'s favorite stock...__ __[Palantir](https://robinhood.com/stocks/PLTR)__ is the secretive software company that crunches data for big clients like intelligence agencies. Since [going](https://snacks.robinhood.com/newsletters/5v5XVtc1gTDCrGNZIuANTa/articles/4melLm5tbEOhCjxLIJrNEi/) public in October, Palantir has been a little less mysterious (at least, its finances have): shares plunged 9% for the week after Palantir reported a $148M loss for last quarter — and $1.2B for the full year. Still, average revenue *per customer* was a whopping $7.9M last year. 2020 sales beat expectations, as Palantir won contracts with the US Army, the Air Force, and the FDA (and they probably didn't even get a free trial).

__Up, in a bad way...__ US jobless claims [hit](https://www.bloomberg.com/news/articles/2021-02-18/u-s-initial-jobless-claims-unexpectedly-rise-for-a-second-week?sref=q3KSFp38) a four-week high of 861K for the week ended February 13th, rising for the second week straight. Despite a steady drop in Covid cases as vaccines roll out, ~10M Americans are still unemployed. And the pace of recovery is slowing: in January, the US economy added just 49K jobs. Investors are looking forward to more help from Uncle Sam. Dems are on track to (narrowly) pass President Biden’s $1.9T stimulus package, which includes boosted unemployment aid and $1.4K payments to most Americans.

_Heavy cart, slim margin_

💵 Walmart, Amazon, and the minimum wage 

__No more doom-scrolling?...__ Last year, Australia proposed a bill to address power imbalances between the news media and digital platforms (read: __[Google](https://robinhood.com/stocks/GOOG)__ and __[Facebook](https://robinhood.com/stocks/FB)__). The solution: force Google and FB to pay news outlets for displaying and linking to their content. The proposed law is expected to pass next week.

- __Google responded__ by making payment agreements with Australian publications, including News Corp. 
- __Facebook responded__ by *banning news in Australia*. This week, FB announced that it'll no longer allow Australians to share or view news content. Woah.

__Stick to the baby panda videos...__ and forget the breaking news on the Vegemite shortage. FB has banned all news-related links in Australia, *including* stories from international publishers. Also: FB users worldwide can't share or view news stories from Australia. The aggressive move could backfire if users see it as a dangerous threat to free expression. For now, it's mainly bad news for publishers:

- __Hot off the press:__ News outlets used to make $$$ selling papers filled with ads. When everything went digital, so did their ads. But Big Tech ads attract much more spend since they're targeted and have wider reach.
- __Hot off the feed:__ In 2019, 52% of Americans got their news on Facebook. And FB got all the $$$ from the surrounding ads. But Facebook says publishers shouldn’t complain, because FB drives traffic to their sites.


Checkmate

__This could be *convenient* for Facebook...__ By rejecting Australian news, it's setting a money-saving precedent. *But it's also embarking on a nationwide experiment*. FB has received massive heat for circulating polarizing content and fake news. CEO Mark Zuckerberg recently said that people don't want politics to take over their feeds. In Australia, FB has the chance to run a no-political-news experiment. If "no news" boosts earnings or user happiness in Australia, FB could expand it. If it hurts ad sales or engagement, FB might pull a Google and pay up.


Facebook bans news in Australia: a convenient "no politics" experiment?

__First, the primer...__ The BLM movement put a renewed spotlight on racial discrimination in many areas of society, including the beauty industry. Beauty companies have a history of marginalizing communities of color through non-inclusive marketing and products. In the past year, companies like __Estee Lauder__, __L’Oreal__, and __Unilever__ have been [criticized](https://www.theguardian.com/fashion/2020/sep/02/estee-lauder-reviews-skin-lightening-lines-amid-black-lives-matter-anger) for marketing “skin-lightening” products. LVMH-owned Sephora has been [accused](https://www.bloomberg.com/news/articles/2021-01-13/fewer-guards-more-black-brands-sephora-s-plan-to-win-back-shoppers) of racial bias in stores — including instances of associates not being able to do “dark makeup” for women of color. Recently, beauty retailers have started taking steps to improve inclusivity:

- __Ulta__ pledged to double its assortment of Black-owned brands in 2021. __Sephora__ pledged to increase its Black-owned brands from eight to 16 this year (out of its total ~300). And both are expanding employee training to fight unconscious bias. 
- __Sephora__ also signed the [15% Pledge](https://www.15percentpledge.org/pledged), which calls on retailers to work toward committing at least a population-proportional 15% of their shelf space to Black-owned brands.

__Building a foundation...__ In 2017, Rihanna’s makeup brand __Fenty Beauty__ was hailed as groundbreaking for releasing 40 foundation shades. Many of its darker shades sold out in days. That success [led](https://www.racked.com/2018/5/30/17409524/fenty-effect-foundation-40-shades) to the “Fenty Effect”: Big brands like __Dior__ and __CoverGirl__ followed, launching 40 foundation shades each. But a December 2020 [study](https://www.sephora.com/contentimages/belong/january2021/Sephora_RacialBias_eBook_DES_12-23-20_V12%20(1).pdf) from Sephora shows there’s still much left to be done: 

- __3 in 4__ retail shoppers feel that marketing fails to showcase a diverse range of skin tones, body types, and hair textures.
- __2 in 3__ shoppers think stores fail to deliver an equally-distributed assortment of products for different tastes and preferences.
- __2 in 5__ US shoppers have experienced unfair treatment on the basis of their race or skin tone.


__Beauty brands have a major opportunity...__ to foster inclusivity, help break down societal biases, and cater to an underserved market. In 2017, African Americans spent considerably [more](https://www.nielsen.com/us/en/insights/article/2018/black-impact-consumer-categories-where-african-americans-move-markets/) money in the general beauty marketplace than other groups. Black spending power in the US is expected to hit $1.5T by 2021, and is projected to grow significantly in the years ahead. Black consumer choices also have a halo effect that [influences](https://www.nielsen.com/us/en/insights/article/2018/black-impact-consumer-categories-where-african-americans-move-markets/) mainstream tastes. Addressing racism and catering to Black consumers is key to brands’ success. It’s also an opportunity for beauty companies to move the industry and its standards forward. 


🕵️‍♀️ Google's cookies crumble

🎯 Target's anti-Amazonian strategy

🔮 Buffett gives (buy)back

🏈 DraftKings pulls out all the stops

🍟 Biden cooks up a plan

👻 Snap puts itself on the Map

☎️ What's going on with tech stocks?

🖼 LinkedIn does freelance

💵 Walmart, Amazon, and the minimum wage

🗞 Facebook says "no news, friends"