__Secure the doses...__  American big pharma __[Pfizer](https://robinhood.com/stocks/PFE)__ and German biotech __[BioNTech](https://robinhood.com/stocks/BNTX)__ (creative) have been working on four mRNA COVID vaccine candidates. Unlike OG vaccines (which use a weakened virus), mRNA ones teach cells to destroy the virus (hardcore). No mRNA vax has ever been approved for human use, but the US government is clearly optimistic:

- __$1.95B:__ What the US will [pay](https://www.cnbc.com/2020/07/22/us-government-taps-pfizer-to-produce-millions-of-doses-of-coronavirus-vaccine.html) Pfizer/Bio to make and deliver 100M doses of their vaccine to Americans by the end of 2020 (if it gets approved). 
- __1.3B:__ The number of doses Pfizer/Bio expect to manufacture by the end of 2021. The 1st small testing round showed promising results. Larger, late-stage tests will take place this month. 
- __$0:__ Americans will get the vaccine at no cost since the government's paying. If the vax wins approval from the FDA, the US gets dibs on the 1st 100M doses (and 500M extras, if necessary). 

__Putting money on every horse...__ This big bet in the vaccine race is part of the Trump admin's Operation Warp Speed. Vaccines usually take 6-10 years from development to approval. Remember the Ebola outbreak of 2014? The vaccine was *just* approved in December. The US is investing in a "portfolio" of vaccines to up the odds that Americans will have at least *one* ASAP. Other big vax horses the US has funded:

- __[NovaVax](https://robinhood.com/stocks/NVAX)__ got $1.6B to achieve 100M US-reserved doses by January.
- __[AstraZeneca](https://robinhood.com/stocks/AZN)__ got $1.2B to produce 300M doses by this fall.
- __[Johnson & Johnson](https://robinhood.com/stocks/JNJ)__ got $486M to ramp up production to 300M doses. 
- __[Moderna](https://robinhood.com/stocks/MRNA)__ got $456M to power production of its mRNA candidate. 
  









__There's the scientific challenge, then the ethical one...__ Once a company gets an approved vaccine, ethical considerations around profits and distribution come into play. AstraZeneca and J&J [said](https://www.nytimes.com/2020/07/21/health/covid-19-vaccine-coronavirus-moderna-pfizer.html) they'll sell hundreds of millions of doses at price that just breaks even, aka not seeking a profit. On the other hand, Moderna explicitly said it's planning on profiting. Governments will feel obligated to distribute vaccines to their own citizens first if they're being manufactured domestically. That could mean poorer countries get it later.




Pfizer will get $2B from the US for 100M COVID vaccine doses by 2020

__Better have my money...__ __Universal Music Group__ is the major label that reps Rihanna, T. Swift, and hundreds of other musical A-Listers. For years, __[Spotify](https://robinhood.com/stocks/SPOT)__ has been coughing up cash to the world's largest record company for the right to stream its artists' tunes. It's a one-sided relationship in which Spotify pays UMG for each song stream. 

- __Spotify hasn't been consistently profitable__ since most of its revenue goes to paying music labels (since they actually own the music being streamed). Case in point: UMG made almost [$4B](https://www.musicbusinessworldwide.com/universal-is-now-an-8bn-a-year-company-as-streaming-revenues-surge-21-5-in-record-2019/) from streaming sales in 2019.
- __But Spotify has some leverage, too...__ Streaming sales now make up over half of UMG's revenue, and Spotify has around [35%](https://www.businessofapps.com/data/spotify-statistics/#:~:text=Spotify%20was%20estimated%20to%20have,specific%20Tencent%20Music%20on%2010%25.) of global streaming market share. So...

__Spotify's making it "two-sided"...__ Spotify just signed UMG onto its  "two-sided marketplace." Under the new licensing agreement, UMG could eventually be paying Spotify for marketing, data, and analytics. 

- __Right now UMG is just an experimentation partner__. Spotify thinks its tools will be valuable enough to hook the label into shelling out big bucks. That's because...
- __Spotify thinks it knows more about your music tastes than anyone:__ Last year, it intro'd the ability for labels to pay to send targeted push notifications for new music. Universal saw huge success pushing the Weeknd’s “After Hours.” 



_"Operation Two-Sided Marketplace" streaming soon_

__Spotify isn't embraced as "true tech" because of 1 thing...__ High marginal costs. the purest software companies pay for engineers and cloud storage, but besides that don't incur much additional cost for each customer they add. It didn't cost __[Google](https://robinhood.com/stocks/GOOGL)__ anything to show 1 more person that CBD oil ad, but it did make Google more money. For Spotify though, the more a song is streamed, the more it has to pay labels. Spotify’s marginal costs make it less profitable, but new revenues like the "two-sided marketplace" help.

Spotify strikes a deal with Universal Music to make the relationship two-sided

__Don't judge a pear by its blotches...__ Sometimes the imperfections are what make things fruitiful. __Misfit Market__ sells "ugly" or somewhat unfortunate-looking (but still perfectly edible) organic produce. Think: weirdly shaped avocados and dented apples that supermarkets won't sell. It just raised [$85M](https://techcrunch.com/2020/07/22/misfits-market-raises-85-million-series-b-to-send-you-ugly-fruits-and-veggies/) to ship its "Always fresh, sometimes normal" fruit to your door. The value prop:

- __Cheaper than stores:__ Misfits' funny-looking goods can be up to 40% cheaper than grocery store prices, since stores can't (or won't) sell them.
- __Reduces food waste:__ According to Misfits, 40% of all produce harvested in the US goes to waste.  Misfits and competitors like __Imperfect Foods__ are finding mouths for some of that rejected food. 

__Expand the niche...__ Misfits identified a market of people who find value in its mission-driven business model. While many are happy paying for obscene-looking squash to reduce food waste, Misfits wants to expand its biz to a wider audience. To do that, it's increasing its "imperfect" offerings to products like: olive oils with upside-down labels and nut butters with erroneous sell-by dates. 




Save

__Opportunities are born out of market inefficiencies ...__ One business’ market inefficiency is another business’ business. __Uber__ went mainstream because the market inefficiency was available cars and available driver time with a need for you to get from A to B. Misfits' ability to grow depends on just how much the inefficiency it is capitalizing on affects consumers.

Misfits raises $85M to send you "ugly" fruits and veggies 

Dow Jones

S&P 500

Nasdaq

Bitcoin

10-Yr US Treasury

💉 Pfizer gets $2B for a 2020 vaccine

__No more halftime truck-sized sodas...__ __[Coca-Cola's](https://robinhood.com/stocks/KO)__ sales [plunged](https://www.wsj.com/articles/coca-cola-sales-fall-28-with-fewer-products-sold-at-bars-restaurants-11595332395?mod=business_lead_pos1) 28% last quarter and profits plopped 30%. Over half of Coke's sales come from "away-from-home" venues — think: restaurants, sports stadiums, and movie theaters. Since those were corona-closed, expectations for Coke were pretty low. Coke stock actually *jumped* after the news because:

- __The worst is over,__ according to Coke's CFO. The April-June quarter put sales through the wringer, but he thinks the only place to go from that bottom is up. 
- __Coke's sales improved__ in May and June as lockdown measures eased and businesses started reopening around the world. Investors like the way this is trending.  

__The anti-Netflix earnings report...__ Coke's earnings (and their effect on its stock) were the opposite of what we just saw with __[Netflix](https://robinhood.com/stocks/NFLX)__. The lockdown hero beat on sales *and* added 10M new paying subscribers, crushing the 8.2M expected. Buuut...

- __Netflix stock plunged 11%__ because the streamer expects new subscriber growth will majorly slow this quarter to just 2.5M new subs.
- __Netflix added [26M](https://www.theverge.com/2020/7/16/21326434/netflix-second-quarter-earnings-tv-shows-movies-originals-subscribers-adds-ted-sarandos) new subscribers__ in the first two quarters of 2020. For reference: it added 28M in 2019 *in total*.
- __*The best is over for Netflix*...__ At least, that's what investors think. The accelerated growth Netflix experienced in the corona-conomy will likely take away growth from *this* quarter. Netflix's disappointing forecast validated that. 

Toasting to a sweeter future

Drink

__Earnings are old news — investors care about *new* news...__ Earnings reports are mostly lagging indicators on how a company did in the past. Investors are most interested in *leading* indicators that point to how it'll trend in the future. Profits for the S&P 500 are expected to decline [44%](https://www.cnbc.com/2020/07/10/market-heads-into-worst-earnings-season-in-12-years-amid-worries-virus-is-slowing-recovery.html) this quarter, the biggest drop since 2008. But the major indexes are hitting all-time highs because investors believe the worst is over.

Coca-Cola's sales plunge 28% but the stock jumps on a sweeter future

__Angela Merkel must've watched *Hamilton*...__ EU leaders just [agreed](https://www.wsj.com/articles/eu-leaders-close-in-on-coronavirus-recovery-plan-deal-11595274568) on a €1.8T ($2T) stimulus package to support their ailing economy. The Eurozone economy shrank [14.4%](https://www.wsj.com/articles/eurozone-economy-suffers-record-contraction-steeper-than-u-s-11588242162) this year, compared to America's 4.8% drop. Months-long lockdowns and near-zero tourism crushed the bloc. Enter...

- __The package:__ $450B offered as grants (aka "free" money) and $415B as loans (aka debt). Also: $1.15T for a joint EU budget that'll run from 2021-2027.
- __The goal:__ Mediterranean countries were hit way harder than Northern ones. The package is meant to help them recover while not racking up insane amounts of debt. 
- __The opposition:__ Some members (cough, the Netherlands) worry the deal could turn the EU into a money-transfer union, where richer states bail out more indebted ones.

__"I'm just like my countr(ies)"...__ Europe isn't young or particularly scrappy, but it's hungry...for relief.  ICYMI, Hamilton (aka the US' 1st Treasury secretary) got the US federal government to absorb states' debt. The EU is *kinda* emulating this:

- __It's the EU's 1st big issuance of common debt.__ The EU has a monetary union, not a fiscal union. 19 of the EU's 17 countries share the Euro as a common currency, and the European Central Bank controls interest rates and money supply (like the Fed in the US).
- __Member countries usually do their own fiscal policy.__ That involves things like taxation and government spending. 
- __This unprecedented fiscal partnership__ could tighten the economic bond. Buuut: it still needs approval by individual parliaments. 

"_One day, we'll inspire Merkel and Macron_"

Spend

__It all goes back to Euro...__ The benefit of this package is that it could support the Euro's stability. While Dutch politicians don't want their citizens' tax dollars funding other countries' programs, economic stability *is* in everyone's interest. Without the bailout plan, Italy’s national debt risks imploding to a level that could destabilize the whole bloc. Helping struggling member states out now could be better than facing a big currency crisis later. 



The EU agrees on a Hamilton-ish $2T spending package for its economy 

__My lil' pumpkin spice Frappuccino...__  __[Starbucks](https://robinhood.com/stocks/SBUX)__ wants more of your monogamous coffee love. To make sure that all 67 of the cold brews you consume per week come from its stores, Starbs launched its mobile reward program in 2009. It was a pioneer in the (then new) world of reward apps. Now it has sneakily become the fintech product of caffeine:

- __Over 19M Americans__  are active Starbucks Rewards Members. In 2019, the Starbucks Rewards app was the most popular mobile payment app in the US.
- __A shocking 48% of Starbucks' sales__ in May came from Rewards members thanks to corona-conomy mobile orders.

__Getting even more intimate...__ with your wallet. Before, you had to digitally preload a Starbucks Rewards card to pay. Starbucks just [announced](https://edition.cnn.com/2020/07/21/tech/starbucks-rewards-credit-card/index.html) you can link your credit/debit card and pay directly in-app this fall. You can also order on mobile, then pay with cash in person and still get "Stars". FYI: the new payment options give you half the points you'd get using a preloaded card.

- __Defining the relationship__ with customers is more important than ever when Starbucks expects sales to fall ~15% this year. Mobile-order perks are a way to reignite the spark at reopened locations. 
- __Starbucks isn't the only one__ putting a ring on it: __[Wendy's](https://robinhood.com/stocks/WEN)__ just became the 1st big burger chain to [launch](https://edition.cnn.com/2020/07/21/business/wendys-rewards-launch/index.html) a food-based rewards program. __Panera__, which has a whopping 40M loyalty members, is giving MyPanera+ Coffee subscribers unlimited brews through fall.


_When Starbucks Mobile Rewards is the real significant other_

Commit

 __The restaurant Loyalty Wars are coming...__ and you’re the winner. Rewards programs used to be a differentiator. Now they’re becoming the norm. Delivery warriors like Uber Eats and DoorDash try to outdo each other with discount codes. Restaurant chains are increasingly dishing out perks to win your loyalty. __[Dunkin'](https://robinhood.com/stocks/DNKN)__, Panera, and Starbuckss all offer coffee rewards programs, but our loyalty is limited. Expect some one-upmanship in this space as well. 

Starbucks wants to make you even more monogamous — Behold the Loyalty Wars

🥤 Coke's anti-Netflix earnings

__Not just disappearing pics...__ __[Snap](https://robinhood.com/stocks/SNAP)__ wants users *doing more* in its app (besides sending double-chin shots). In 2015 it launched the Discover tab for news. Last year, it launched in-app games. *Yesterday*, Snap [launched](https://mashable.com/article/snap-minis-headspace-mindfulness-meditations/) "Minis," tiny apps you can use within its chat feature (without having to download anything):

- __For its 1st Mini, Snap is partnering with Headspace__, the popular mindfulness/meditation app where a soothing British voice tells you to breathe.
- __Headspace Mini__ offers six different 3-4 minute meditation sessions with titles like "Just Breathe," "Get Out Of A Funk," and "Me Time" (#sassy). Meditate with friends — or at least, with their Bitmojis. 

__Win-win brilliance...__ With Minis, Snap could theoretically let you do 100X more things in-app, which could lead to 100X more engagement — and a lot more ad revenue. By adding a popular partner like Headspace early, Snap can draw users to Minis. By offering itself for free, Headspace gets free marketing and exposure to Snap's 200M+ users. For Headspace, it's all about...

- __"Gateway" Partnerships:__ Headspace charges ~ $10/month for its app subscription. But it offers free sessions to partners like Nike Run Club and airlines — aka "gateways" for people to get hooked, download its app, and eventually become paying subscribers. 





_When your phone dies and you have to meditate without Snapchat's help_

Chill

__This could be the next (mini) App Store...__ Call it the Snapp Store. Apple takes a 30% cut of paid downloads, in-app purchases, and subs in the App Store. Developers have long [complained](https://snacks.robinhood.com/newsletters/1dxqpvdRnz5eITeoT8vbeN/articles/2WdP7dj2TMzaTUWzOkSACV/), but don't really have another choice. Now Snap is offering a platform to ship mini apps, which could later be monetized. 

- __Consumers would rather do multiple things in 1 app__ than download dozens of apps. China's WeChat [thrives](https://www.protocol.com/koji) with mini apps, and Apple's trying to do the same with "App Clips." 
- __Snap reaches [90%](https://www.theverge.com/interface/2019/4/5/18296063/snap-gaming-snapchat-teens-advertising) of 13 to 24-year-olds__ in the US. If Minis succeed, developers could turn their attention there to capture the next gen of users. 








Snap and Headspace launch a win-win partnership for Mini meditation 

__America runs on Dunkin'...__ But __[Uber](https://robinhood.com/stocks/UBER)__ runs on Google Maps. We don't think much about Uber's underlying GPS while drinking out of a plastic bottle and asking for the AUX cord. However, Uber has Google Maps built into it. Without __[Google](https://robinhood.com/stocks/GOOGL)__, Uber can't direct drivers, give ETAs, and stop you from asking 'how much longer.' That's why:

- __Uber just [inked](https://finance.yahoo.com/news/uber-inks-agreement-google-maps-075214014.html) a 4-year agreement__ with the tech giant, giving it access to Google Maps for its rides and Eats deliveries. 
- __Why Google?__ Uber said in its IPO paperwork “We do not believe that an alternative mapping solution exists that can provide the global functionality that we require." Apple Maps, *burned*.  
- __From 2016 to 2018,__ Uber paid Google $58M to use its Maps service. We don't know how big the latest deal is. 

__More like Pool pricing...__ $58M is a relatively small sum to pay for a service that essentially powers your app. Especially when Uber did $11B in sales in 2018, and Google did $39B (*in just the 4th quarter*). Sure, Google's happy with billions of riders subconsciously accessing its Maps. However, it turns out Google and Uber's relationship isn't casual (it's complicated):

- __Google has a 5.2% stake in Uber:__ Google's venture arm invested $258M  in 2013, back when Uber was a private startup. That stake is now worth over 10X more. 
- __Mo Equity Mo Partnerships:__ From 2016-2018, Uber spent [$631M](https://www.cnbc.com/2019/04/11/alphabet-uber-investment-stake-has-gone-up-20x-since-2013.html#:~:text=Six%20years%20after%20making%20what,in%20the%20ride%2Dsharing%20company.) for Google ad services.

Ride

__Big Tech is the "Silent Server" for the digital economy...__ The true power lies in the utilities you use, but don't necessarily see. __[Amazon](https://robinhood.com/stocks/AMZN)__'s cloud service, AWS, accounts for nearly [13%](https://www.visualcapitalist.com/how-big-tech-makes-their-billions-2020/) of its revenue and also powers the operations of millions of companies from __[Netflix](https://robinhood.com/stocks/NFLX)__ to __[Slack](https://robinhood.com/stocks/WORK)__ to __[Shell](https://robinhood.com/stocks/RDS.A)__. Google Maps, which runs on Google Cloud, (almost) invisibly powers Uber's operations — and it's expected to deliver Google nearly $5B this year. Tech giants' servers perform essential computing for the apps you love. So they can charge rent that you don't see, but definitely pay for.

Uber signs a 4-year deal with Google Maps — it's a "friends with benefits" relationship

👻 Snap wants Headspace

__$25B later...__ Back in April, airlines got [$25B](https://snacks.robinhood.com/newsletters/XFl10uA56LUjXq5vweRtc/articles/5B4WtFBkJTYQdMwixAwHFk/) in bailouts from the US government so they could continue paying their hundreds of thousands of employees. Under the terms, airlines can't make any layoffs or job cuts until September 30th. The hope was that the funds would be enough to tide airlines over until October, when travel was expected to pick up again. Reality check: *it's still bad*. 

- __While travel has ticked up__ since mid-April — when airlines had 96% fewer US passengers than they had in April 2019 — it's still pretty abysmal. 
- __On July 16th,__ the number of passengers passing through TSA was down [74%](https://www.tsa.gov/coronavirus/passenger-throughput) from normal times a year ago. COVID cases are surging again, so it doesn't seem like this will trend well.

__Honestly just sad...__ With depressed travel demand and high expenses, US airlines are burning through their bailout bucks. Now tens of thousands of employees are fearfully waiting for October 1st, when the ban on job cuts expires:

- __[American](https://robinhood.com/stocks/AAL)__ warned [25K](https://www.nbcnews.com/business/business-news/american-airlines-warns-25-000-employees-about-potential-job-cuts-n1233962) employees (almost 20% of its workforce) about potential  cuts, citing an 80% drop in sales. 
- __[United](https://robinhood.com/stocks/UAL)__ told 36K employees (almost 40% of its workforce) that they could be furloughed.
- __[Southwest](https://robinhood.com/stocks/LUV)__, which has *never* had an involuntary furlough, told employees that cuts will happen unless passenger numbers 3X by the end of the year. 
- __[Delta](https://robinhood.com/stocks/DAL)__, which took a $5.7B loss last quarter, might have to [cut](https://skift.com/2020/07/18/delta-pilots-face-decision-accept-furloughs-or-agree-to-reduced-minimum-pay/) pilots' pay to avoid furloughs. CEO Ed Bastian called the pandemic's effect on the (formerly thriving) airline "truly staggering."

"_No Biscoff cookies?_"

__Was the bailout a waste?...__ The government spent $25B of taxpayers' money to save US jobs, but it looks like jobs are likely to be cut anyway. It's even possible that airlines will still go bankrupt. Buuut: Had the government *not* bailed out the airlines, layoffs likely would have come much earlier. That would've meant government $$$ going to workers through unemployment checks. With the bailout, the gov gets to continue collecting income tax from those employees — at least until Sep 30th. For the bailout to have a happy ending, we need to slow COVID (fast).

Airlines warn of massive job cuts in October, despite $25B in bailouts

__Extra cheesy...__ __[Domino's](https://robinhood.com/stocks/DPZ)__ US sales surged 16% because it doesn't give a crust that its spots were closed for in-store dining — it thrives on the *out-of-store* experience: mobile-order takeout, delivery, and now even "[Carside Delivery](https://thespoon.tech/dominos-takes-a-cue-from-grocery-with-its-new-carside-delivery-feature/)." Dom's is one of the few restaurant chains that handles its own delivery (no Uber Eats or Doordash), so it gets to keep 100% of its mobile orders. Now it's focused on opening stores closer together to improve delivery times (aka "fortressing").  

__Hold the Dom...__  __[Chase](https://robinhood.com/stocks/JPM)__, __[Citi](https://robinhood.com/stocks/C)__, __[Goldman](https://robinhood.com/stocks/GS)__, and __[Morgan Stanley](https://robinhood.com/stocks/MS)__ announced expectations-smashing earnings driven by record trading revenues. But Big Banks can't celebrate those big bucks yet. Last quarter, the government's multi-trillion stimulus powered bond trading and padded consumers' wallets. But the extra $600/week in unemployment benefits is set to expire next week, and COVID re-closures are happening. Banks see so many loan defaults in their future that they set aside [$30B+](https://snacks.robinhood.com/newsletters/1YSfPrq3GpLOGVYKoLdjDA/articles/4Lf0cRhYQdGsnUq9Yd476s) to cover those expected loan losses (on top of $20B+ *last* quarter). 

Highs

Who's up...

__No Flix Zone...__ __[Netflix](https://robinhood.com/stocks/NFLX)__ added an Oscar-worthy 10M new paid subscribers *last* quarter, crushing the 8.2M expected. But shares [fell](https://www.cnbc.com/2020/07/16/netflix-nflx-q2-2020-earnings.html?__source=twitter%7Cmain) 10% Thursday because investors are already thinking 3 months ahead (since you're already on Season 2 of *Dead to Me*). Netflix expects new subscriber growth to majorly slow this quarter to just 2.5M new subs. BTW: Netflix's current Chief Content Officer Ted Sarandos will join Reed Hastings as co-CEO in a leading role. 

__Kim K, Joe Biden, and Apple walk into...__ a bitcoin scam. __[Twitter](https://robinhood.com/stocks/TWTR)__ suffered a major [hack](https://snacks.robinhood.com/newsletters/695acOxqA9l0V9Q9Xp38oj/articles/4aQQllifXyQmT3gMOFphRx) when accounts from Obama to Bezos started tweeting out requests for crypto payment. Twitter took the unprecedented step of blocking tweets from all verified users (aka blue checkmarks) to stop the damage. Despite the *relatively* harmless tweets (could've caused 1000X more havoc), the Twitter trust is bruised. The world is now questioning the security of the platform at the heart of market-moving breaking news. Just in time for the 2020 election. 





Lows

...and who's down

✈️ America's airline bailout bust

__What Elon, Kim K, and Biden have in common...__ All got __[Twitter](https://robinhood.com/stocks/TWTR)__-hacked on Wednesday. It started with an Elon tweet (doesn't it always?). But this Elon tweet was almost *too* strange: "doubling all payments sent to my Bitcoin address." Then the Bitcoin-scammy tweets started coming from Bill Gates. *Then* came a wave of Bitcoin-scammy tweets from: Barack Obama, Jeff Bezos, Kanye, Apple, and Uber (among others). Then, there was silence...

- __For the 1st time ever,__ Twitter took the extreme step of [blocking](https://www.cnbc.com/2020/07/16/twitter-hack-how-hackers-gained-access-to-accounts.html) new tweets from *all* verified users on Twitter (aka, silencing the blue checkmarks). 
- __Twitter blamed social engineering.__ Employees had access to high-profile accounts and were tricked into sharing. But Vice [reports](https://www.vice.com/en_us/article/jgxd3d/twitter-insider-access-panel-account-hacks-biden-uber-bezos) that a Twitter employee knowingly helped hackers in exchange for payment. Truth still TBD. 
- __$120K:__ What the hackers got from this high-profile crypto scam.

__*Yet this could have been 100000X worse*...__ Twitter is at the very heart of breaking news, government policy, and market-moving comms. President Trump's account wasn't hacked, but this breach makes you wonder if it could be. Imagine the market and political response if the hackers had sent...

- A tweet from Trump declaring war on a country 
- A tweet from Elon saying he's quitting Tesla 
- Tweets from Uber and Bezos saying Amazon is acquiring Uber
- Tweets from Biden and Kanye saying they're running together

_When the Twitter account you didn't know you had gets hacked_

Hack

__The Twitter trust is bruised...__ However this hack was orchestrated, it reveals that Twitter was/is vulnerable. Now the world is questioning the security of its systems. Lawmakers are knocking down Twitter's door to get clarity on how this could happen and why it wasn't stopped sooner (it took hours to block compromised accounts). Some public figures/companies might even quit Twitter as their go-to platform for breaking announcements. All of that would hurt user metrics, ad sales, and profits.

Twitter suffers a major celeb hack (that could have gone way worse) 

__More like UnitedWealth...__ Insurance giant __[UnitedHealth](https://robinhood.com/stocks/UNH)__ had its most profitable quarter *ever*. United [took](https://www.axios.com/unitedhealth-coronavirus-second-quarter-profits-0ff4a160-6e50-4b77-84d9-9a2bff9358d7.html) home $6.6B in profit, *double* the amount it made the same quarter last year. You didn't use the insurance benefits you pay United for monthly — so your canceled April doctor's visit went straight into United's pocket. That was for two reasons:

- __You literally couldn't:__ Elective surgeries and routine visits were paused for months this spring as hospitals focused on COVID. Don't even think about a hip replacement. 
- __You were scared to:__ People stayed away from germy hotspots (hospitals and doctors offices) out of fear. Mole removal can wait if it means a lower corona-exposure.

__Your health insurance policy might be complex__, but your health insurers' business is simple: *maximize premiums, minimize payouts*. That's exactly what United did last quarter: The money it paid out for COVID care was way less than the money it saved on all the care you *didn't* use. One magic metric tells that story...

- __Medical Loss Ratio ("MLR"):__ The amount of money United pays out, divided by the amount it receives in premium payments. 
- __70%:__ United's MLR last quarter, *a historic low*. United paid just 70 cents in claims for every dollar it received in premiums. 
- __That's significantly less__ than it was paying a year ago, when MLR was 83%. Less payout = more profits. 

 


Insure

__This profit doesn’t look good on healthcare...__ Health insurers profited on customers paying for benefits that they couldn't use (because, pandemic). Also, devastating job losses had millions losing employer-sponsored coverage. Regulators have called for some of the industry's profits to be returned to customers. Some health insurers have offered premium credits and discounts. United says it paid out $1.5B in discounts — but it still took home $6.6B in just 3 months.




UnitedHealth's most profitable quarter ever, courtesy of your canceled doc visit

🕵️‍♀️ Twitter-gate

__Free lollipops at the teller...__ __[JPMorgan Chase](https://robinhood.com/stocks/JPM)__, __[Goldman Sachs](https://robinhood.com/stocks/GS)__, and __[Citi](https://robinhood.com/stocks/C)__ all announced *expectation-beating earnings driven by record trading revenues*. The Fed has been on a corporate bond [buying spree](https://markets.businessinsider.com/news/stocks/federal-reserve-buys-corporate-debt-berkshire-hathaway-walmart-mcdonalds-cocacola-2020-6-1029349199#), lending companies money at near-zero interest (to grease up the economy). Banks cashed in on underwriting and trading all those bonds. Stock trading also surged on corona volatility (banks made bank on that, too).

- __JPM's__ overall trading revenue surged almost 80% to a record. *Bond* trading revenue doubled, helping JPM rake in $4.7B in profit from April - June. 
- __Goldman__'s bond trading revenue soared 150% for its biggest earnings win in 10 years.

__But this was a *very* unusual quarter...__ because of the multi-trillion dollar cash cushion the government unleashed on the economy. The Fed's massive bond-buying spree brought cash into banks. Financial safety nets, like stimulus checks and extra unemployment benefits, led to Americans' income actually *rising* 10% in April (despite extreme unemployment). Now... 

- __Some safety nets are closing:__ The extra $600/week in unemployment benefit is set to [end](https://fortune.com/2020/07/15/extra-600-unemployment-extension-next-stimulus-will-it-continue-extended-coronavirus-benefits-each-week-cares-act/) next week. Yesterday, the 3-month delay for tax filing ended.
- __JPM said loan defaults *had been* limited__ thanks to the gov's financial stimulus boosts. Now that benefits are ending, that could change. 




Money

__Banks aren't celebrating yet...__ JPM CEO Jamie Dimon thinks the worst of the recession lies ahead. Now that the big stimulus training wheels are coming off, many might not be able to pay back their loans, so banks are setting aside massive amounts of cash in advance to cover these expected losses. JPM, Citi, Goldman, and Wells Fargo saved $30B for these loan-loss provisions this quarter (*on top* of over $19B [last quarter](https://snacks.robinhood.com/newsletters/7AbTHa6Ld095hkHZCRzEaL/articles/6MiIgW9CSp3vQEIYRasNPN/)). They're prepping for an economic storm.





Big Banks report surprisingly strong earnings — but they can't celebrate yet

__Zoom, Zoom, Zoom, Zoom...__ *I want you in my room*. That's how __[Zoom](https://robinhood.com/stocks/ZM)__ hopes you'll feel about its [new](https://www.cnbc.com/2020/07/15/zoom-expands-into-hardware-with-599-video-chat-device.html) $599 video chat device. The hardware, called "Zoom for Home – DTEN ME" (catchy), is not actually being made by Zoom. Zoom's partner, DTEN, is producing it — Zoom just loads its software on:

- __The hard specs:__ The 27-inch screen monitor comes with three wide-angle cameras, eight microphones, and touchscreen display. So everyone can see your Zoom Face in HD. 
- __The soft specs:__ Zoom software is pre-loaded and the interface gives you easy access to popular features. Exciting stuff like: start  meeting, make call, choose generic background.

__*Why you so obsessed with Meet?*...__ Zoom for Home  is Zoom's bet that WFH is here to stay. With COVID cases surging in the US, remote work won't be losing steam any time soon. Zoom wants to capitalize on that (*even more than it already has*) — so it's investing in an immersive, souped-up WFH setup. 

- __It's not alone...__ __[Google](https://robinhood.com/stocks/GOOGL)__’s Nest Hub, __[Facebook](https://robinhood.com/stocks/FB)__’s Portal and __[Amazon](https://robinhood.com/stocks/AMZN)__’s Echo Show are similar video chat devices. They're also much cheaper than  ZFH (e.g. Nest Hub costs $90).  
- __*But have you ever seen anyone actually use those?*__ Zoom thinks its synonymousness with "WFH" gives it a better shot (than FB's flopped Portal). Plus: it doesn't really want *you* to buy ZFH... 

Hardware

__Zoom is really trying to win over your boss...__ Given the $600 price tag, it's clear that Zoom is targeting employer wallets (not employees). As WFH drags on indefinitely, companies have whole task forces dedicated to making remote employees feel as engaged and productive as possible. Zoom wants to convince companies that it can recreate real-time collab productivity at home. If it succeeds, ZFH could become an "expensed" fixture.

Zoom gets into hardware with a $600 multi-cam monitor (aimed at your boss)

__How to make insurance sexy...__ Call it "Lemonade" (in Millennial cursive), throw it in an app, and add pink buttons *everywhere*. Digital insurance startup __[Lemonade](https://robinhood.com/stocks/LMND)__ refers to [itself](https://www.sec.gov/Archives/edgar/data/1691421/000104746920003416/a2241721zs-1.htm) as a "cocktail of delightful experience." Its stock jumped 139% on its IPO day this month and has barely budged since. Now it's [launching](https://techcrunch.com/2020/07/15/lemonade-launches-pet-insurance/) Pet Insurance: the sweet new vertical will complement its core renters/homeowners insurance.

- __Lemonade data revealed:__ 70% of Lemonade customers have pets, but less than 2% have pet insurance. That's not a good feline for the 68% *un-insured* dogs and kitties.
- __Non-Lemonade data revealed:__ Americans spent over $75B on pets in 2019, and puppy love has only accelerated in the corona-conomy. __[Chewy](https://robinhood.com/stocks/CHWY)__ sales [soared](https://snacks.robinhood.com/newsletters/6PR0xbLSMdv6hGEyPZHPHD/articles/1qID0PIUvnfyK7kmL5mfVe/) 46% last quarter on extra pet pampering and adoptions. 

__The art of the cross/up-sell...__  Lemonade is pricing its pet insurance at $12/month. *But* existing customers who bundle it with their home/renters policies get a 10% discount.

- __Cross-sell:__ Lemonade is trying to juice more out of its customers by throwing in this extra offering it knows they'll want. 
- __Upsell:__ Lemonade can also lure in *new* customers with its affordable pet insurance, then *upsell* them its pricier core home insurance.
 

_Lemonade shareholder meeting_

Puppies

__Lemonade needs to increase your Lifetime Value...__ if it wants to become profitable. 90% of its customers are 1st-time insurance buyers. Page 131 of Lemonade's [S-1](https://www.sec.gov/Archives/edgar/data/1691421/000104746920003416/a2241721zs-1.htm#cy40510_business) reveals its simple master strategy to gradually increase their monthly payments: *expand to new products*. Lemonade gets you with renters insurance at 25, bumps you to pricier condo insurance at 30, then will add on Auto, Life, and Umbrella insurance by your 50th b'day. Growing with customers *now* means Lemonade needs to launch new products *ASAP*. 



Fresh off its IPO, Lemonade adds Pet Insurance —  it's all part of the  plan

🎥  Zoom's pseudo-iPad

__SpongeBob French voice: "*25 years later*"...__ The Bronco is back. __[Ford](https://robinhood.com/stocks/F)__ stock revved up 5% yesterday after [unveiling](https://www.cnbc.com/2020/07/14/ford-unveils-new-bronco-as-off-road-open-air-suv-for-under-30000.html) a revival of its Bronco. The off-road, open-air SUV was manufactured from 1965-1996 (then Ford killed it). Now __[Fiat Chrysler](https://robinhood.com/stocks/FCAU)__'s Jeep Wrangler is the #1 off-road seller in the US.

- __When one door closes, four open.__ The new Bronco line includes two and four-door SUVs, plus a smaller Bronco Sport SUV. 
- __Take the top off.__ Removable roofs and doors are key features (just like Jeep — #Zucked).
- __Name your price__ The 2021 Bronco starts under $30K (about the same as a basic Wrangler). But top-end models with extra bells/whistles could run you over $60K.


__Cry me a Hummer...__ The Bronco is Wrangler’s 1st real competitor since __GM__’s Hummer, which was discontinued in 2009 (but is being [revived](https://www.wsj.com/articles/gm-to-revive-hummer-name-on-new-electric-pickup-model-11578686692) as an EV). Given Wrangler's success...

- __Bronco could become Ford's next profit puppy:__ Credit Suisse estimates it'll add nearly $1B to Ford’s operations if sales reach 125K units.
- __Ford's *current* profit puppies__, its F-series pickup trucks and SUVs, have brought in billions in profits. The Ford F-150 has been the [best-selling](https://www.businessinsider.com/new-ford-f-150-pickup-why-its-americas-bestselling-truck-2020-6?IR=T) vehicle in the US since 1981 — a whopping 900K were sold in 2019. And yet...

"_Who's this Bronco guy?_"

Drive

__Ford doesn't hype itself up much...__ New releases like Bronco and the recently [unveiled](https://www.businessinsider.com/ford-f-150-pickup-trucks-coolest-feature-folding-desk-2020-7) F-150 drive under the radar. Same with Ford's self-driving, electric-vehicle [partnership](https://www.theverge.com/2019/7/12/20690722/ford-vw-alliance-self-driving-argo-investment-valuation) with VW... *and* its electric Mustang Mach-E. Meanwhile, __[Tesla](https://robinhood.com/stocks/TSLA)__'s theatrical Cybertruck unveil makes every major headline years before production. Tesla's good at hype — so good it's now the most valuable car company *on Earth* (despite no annual profit). Midwestern Ford could gas itself up more.

Ford brings back its iconic Jeep rival — but it might need to gas itself up more

__All the news that's fit to...__ convert into every single medium possible. Newspaper ad revenue has been devoured by __[Facebook](https://robinhood.com/stocks/FB)__ and __[Alphabet](https://robinhood.com/stocks/GOOG)__. Long-form journalism has lost its audience at the same rate that our attention spans shrank (to Instagram-size). All this to say: __[The New York Times](https://robinhood.com/stocks/NYT)__ had to adapt. After 170 years of ink and paper, NYT is no longer a newspaper stock — it has morphed into a full-on multi-media stock:

- __TV Shows:__  NYT reportedly has 10 scripted shows [in development](https://www.axios.com/new-york-times-tv-shows-8c7858f0-aee8-4f55-b72d-bb537e2f52a6.html), including a limited series for Amazon. Its *Modern Love* column got turned into a Prime Video show (and NPR podcast). Its weekly news show streams on Hulu and FX. 
- __Documentaries:__ NYT has 3 features slated for this year, including one for Netflix. It also premiered two feature-length docs at Sundance (fancy).
- __Audio:__ NYT's *The Daily* is a top-5 pod on Apple and Spotify. *1619 Project*, its chart-topping pod on slavery, is being brought to film/TV (thanks to Lionsgate/Oprah).
- __In case pods weren't enough:__ NYT [acquired](https://techcrunch.com/2020/03/23/the-new-york-times-company-acquires-audm-an-app-that-turns-longform-journalism-into-audio/) an app that turns articles into audio.

__NYT’s core product isn’t articles...__ It’s stories. NYT is leveraging its intellectual property by licensing deals left and right. That's how it was able to rise from the newspaper ashes of ad-pocalypse... and be born again just as successfully across entirely new non-print media channels.

Transform

__It’s not enough to be a one-trick content pony anymore...__ New mediums are key to reaching new audiences. Most people no longer have the attention span for longform journalism. 

- __NYT can reach them *with the same content* by repackaging__ it into a TV show or pod. It's easier to attract people with this “off-platform” journalism.
- __Distribution is just as important:__ The Times’ goal is to have 10M digital subs by 2025. Partnering with big shots like Netflix and Amazon is key to driving top-of-funnel growth.  





The New York Times is no longer a newspaper (it's a multi-multi-media company)

🚙 Ford's new Bronco... is a Jeep

__"The next billion users..."__ What __[Google](https://robinhood.com/stocks/GOOGL)__ counts instead of sheep to fall asleep at night. They'll likely come from India, the world's 2nd most populous country (barely short of China). Roughly [half](https://www.wsj.com/articles/google-to-invest-10-billion-in-india-11594635725) of India's 1.3B people have yet to get online. Google wants in on those ~650M, so it's investing big in the world’s fastest growing internet market: 

- __The Google for India Digitization Fund__ will pour money into India's tech sector over the next 5-7 years. Expect spending on: equity investments, partnerships, and connectivity infrastructure.
- __Google will invest $10B there__ to make the internet "affordable and useful" for all those not-yet-connected. *Longish-term goal:* gain ad-revenue-driving eyes in the #1 untapped digital growth market.

__"*I know I'm not the only one*"...__ As geopolitical issues with China heat up, more companies are looking to India. China already bans American tech giants like Google and Facebook for censorship reasons. Now America's security concerns are intensifying (think: TikTok bans, Huawei bans). Political and trade issues, like China's crackdown on Hong Kong and its new deal with Iran, create a tense situation that companies don't feel safe investing in. 

- __[Facebook](https://robinhood.com/stocks/FB)__ invested almost [$6B](https://techcrunch.com/2020/04/21/facebook-reliance-jio/) for a 10% stake in India’s biggest telecom, __Jio Platforms__, back in April (__[Intel](https://robinhood.com/stocks/INTC)__ and __[Qualcomm](https://robinhood.com/stocks/QCOM)__ are now proud investors, too). 
- __[Amazon](https://robinhood.com/stocks/AMZN)__ invested $1B to take Indian businesses online, and is investing $5B to expand its India operations. __[Walmart](https://robinhood.com/stocks/WMT)__ dropped $16B on Indian ecommerce company __Flipkart__ in 2018.




_In India, the internet comes to you_

Invest

__India brings less spending power, but more numbers power...__ Tech companies like Google value users by their revenue potential. India's gross national income per person was [$2,130](https://data.worldbank.org/indicator/NY.GNP.PCAP.CD?locations=IN) in 2019, compared to almost $66K for the US. But the US has 330M people, over 90% of whom are internet users — India has 1.3B people and only ~55% are internet users. A massive untapped market makes up for spending power differences. 

India has over 600M people without internet, so Google's investing $10B 

__New Season out soon...__ We're talking Earnings Season, baby. __[Netflix](https://robinhood.com/stocks/NFLX)__ is kicking it off on Thursday after the market closes. Investors have some thoughts before the numbers drop (*don't they always*). The stock has soared ahead of earnings, giving Netflix a larger market value than __[Verizon](https://robinhood.com/stocks/VZ)__ and post-Hamilton __[Disney](https://robinhood.com/stocks/DIS)__. 

- __The bulls think 2020 is the year Netflix becomes a utility.__ Home-bingeing has never been more important and Netflix’s obsessive [content-hoarding](https://snacks.robinhood.com/newsletters/3VYgq4XRGydXCiWCpJd3rW/articles/1hRrTGpsrWf1HFMQNZopbk/) gives it a big leg up over rivals: it reportedly has *2 years worth* of fresh movies/shows stashed away.
- __The bears think 2020 is the year Netflix loses to *subscripturation*.__ A slew of new streamers have launched, and growth could slow on the competition/saturation. Netflix already takes up [72%](https://www.theverge.com/2020/4/21/21229587/netflix-earnings-coronavirus-pandemic-streaming-entertainment) of home streaming time. 


__Netflix and no chill...__ What investors really care about is 1 key nail-biter stat:

- __Net new subscriber growth:__ Netflix absolutely crushed it in April, adding 15.8M new paying subscribers in the 1st quarter (more than double the 7.2M expected).
- __Investors are waiting for another hit,__ but that's a tough act to follow. Netflix has forecast [7.5M](https://www.wsj.com/articles/netflix-cant-afford-a-weak-sequel-11594639800) net adds for this June quarter, but some bulls are expecting 10M-12M. 

_Investors waiting for the Netflix earnings like_

Watch

__The thesis, the risk, and the result...__ Earnings expectations drive stock moves, so shares can be particularly volatile pre-earnings. Long or short term, investors formulate a thesis based on data and trends, then take a risk based on their projections. Investors who are bullish on Netflix could see their stock jump if new subscribers exceed expectations — and they'll likely see their stock drop if new subscribers fall short.


Netflix is set to report earnings — investors are waiting for 1 key number

__That feeling when you order Coke...__ And they ask if Pepsi's okay instead. Pepsi might not be everyone's soda of choice, but it's winning on one thing: *snacks*. With restaurants, sports stadiums, and movie theaters closed during the pandemic, __[PepsiCo](https://robinhood.com/stocks/PEP)__'s *beverage* sales [plunged](https://www.cnbc.com/2020/07/13/pepsico-pep-earnings-q2-2020.html) 7%. Good thing the snacks portfolio was there to save the day:

- __Frito-Lay sales rose 7%:__ Pepsi owns the four big Os (Cheetos, Doritos, Tostitos, and Fritos), plus Lays (you really *can't* eat just one). 
-  __Quaker sales rose 23%:__ Pepsi owns your entire breakfast with Quaker Oats, cereal, and those Chewy snack bars that you ate 1,000 of at soccer practice. 
- __Pepsi's overall sales__ fell just 3% for the quarter thanks to the dippy-chewy snacks success. 

__The revival of "forgotten habits"...__ The pandemic has boosted  Big Food brands like Pepsi, __Kraft__, __Unilever__, and __Kellogg__. Consumers have turned to these familiar, affordable names for corona hoarding. And stress snacking has gained new power in the WFH era. *However...*

- __Healthy-*ish* drinks sparkled:__ Pepsi Zero Sugar and Bubly sparkling water saw [double-digit](https://www.cnbc.com/2020/07/13/pepsico-pep-earnings-q2-2020.html) sales growth. Pepsi's juice biz (including Tropicana OJ) got a big immunity boost. 
- __Healthy-ish snacks__ like SmartPop popcorn, Sun Chips, Bare dried fruit chips, and Sabra hummus are also part of the Pepsi fam. Which is why...




"_Welcome to the Pepsi aisle!_"

Snack

__Pepsi needs to change its name (or at least rebrand)...__ When you think of Pepsi, you think of canned soda and Mountain Dew. But Pepsi has a lot more to offer than sugary soda. Its latest earnings reveal that those "didn't-know-it-was-Pepsi" products — like Quaker Oats and Naked juice — are thriving. Perhaps the whole brand could get a boost if Pepsi honed in on that value prop.

PepsiCo’s earnings reveal it should probably rename to SnacksCo

🍿 Netflix's pre-earnings

__"How to become YouTube vlogstar"...__ Every __TikTok__ stars' Google search last week after millions of like/view counts suddenly went to zero. TikTokers thought it was the first sign that their precious app had been banned. It was a [glitch](https://www.vulture.com/2020/07/tiktok-glitch-ban.html), but their fears are far from unfounded. The viral video app is owned by China-based __Bytedance__, the [most](https://www.businessinsider.com/tiktok-bytedance-revenue-billions-first-quarter-results-growth-2020-2020-6?IR=T) valuable private startup *in the world* (~$100B). Before we dig into TikTok's possible demise, let's recap the impressive rise: 

- __Within a few months of its 2018 US launch,__ TikTok reached #1 on the App Store, beating giants like Instagram and YouTube. In 2019, TikTok had over [738M](https://www.barrons.com/articles/beware-facebook-tiktok-revenues-are-exploding-51579201752) global downloads.
- __Today,__ TikTok has been downloaded over 2B times and has an estimated 80M users in the US alone. 


__Clock's TikToking...__ Security concerns around TikTok's ties to China are heating up. The US already bans employees of many government agencies (like the Army) from having TikTok on work phones. Last week, __[Wells Fargo](https://robinhood.com/stocks/WFC)__ told employees to [remove](https://www.theverge.com/2020/7/11/21320935/wells-fargo-bans-tiktok-devices-amazon-pompeo) it from company devices. Amazon did the same, then weirdly [backtracked](https://www.geekwire.com/2020/ban-wasnt-amazons-tiktok-reversal-leaves-tech-world-wondering-wth/). Also:

- __India full-on banned TikTok__ (and 58 other Chinese apps) on national security concerns. India was TikTok's largest market *by far*, driving [660M](https://edition.cnn.com/2020/06/30/tech/tiktok-india-ban-intl-hnk/index.html) downloads since 2017. This may cost Bytedance [$6B](https://www.forbes.com/sites/zakdoffman/2020/07/04/tiktok-loses-6-billion-as-users-urged-delete-app-immediately/#35d9efb91c98) in lost ad sales. 
- __President Trump said he's considering [banning](https://fortune.com/2020/07/09/tiktok-ban-trump-is-tik-tok-getting-banned-us-why-how-would-it-work-china/)__ TikTok and other Chinese  apps. Leaked moderation guidelines [reveal](https://www.theguardian.com/technology/2019/sep/25/revealed-how-tiktok-censors-videos-that-do-not-please-beijing) TikTok has censored content critical of China. And the administration is worried American user data could be passed to the Chinese gov. Interestingly...
- __China itself bans TikTok__ — Chinese nationals use Bytedance's __Douyin__, the original, non-international version of TikTok: Same branding, same parent, separate content (which is censored by the Chinese gov).

_When the TikTok ban nightmare becomes reality_

Dance

__TikTok has big US market influence...__ despite being a non-public, non-US company. Its explosive growth has major implications for American media. It's the biggest threat for disrupting social giants like __[Facebook](https://robinhood.com/stocks/FB)__, __[Snap](https://robinhood.com/stocks/SNAP)__, and __[Twitter](https://robinhood.com/stocks/TWTR)__. It contributed to __Quibi__'s flop. And recently, it's been trying to appeal to the American gov: it [brought](https://www.theverge.com/2020/5/18/21262872/disney-plus-streaming-kevin-mayer-tiktok-ceo-bytedance-coo) on a former Disney exec as CEO and is considering adding a non-China HQ. But more TikTok bans could be coming — *that would significantly reduce competition for US media companies*. 



TikTok's future is cloudy as the US looks into a security ban (India's already on it)

__Turn me on with your electric wheel...__ Electric vehicle startup __Rivian__ [raised](https://www.theverge.com/2020/7/10/21319899/rivian-2-5-billion-funding-round-amazon-soros-r1t-r1s-truck-suv-ford) an astounding $2.5B in its latest funding round — without ever having released a single product. Rivian wants to be the 1st to bring all-electric pickup trucks to roads *and* it's developing 100K electric delivery vans for __[Amazon](https://robinhood.com/stocks/AMZN)__ (ETA 2021). Producing all these EVs is capital-intensive — so investors have poured in $5.3B since 2019 (about 1/2 the value of Lyft).

__Bezos sweating over $21...__ __[Walmart](https://robinhood.com/stocks/WMT)__ stock jumped 7% on a report that it's [shipping](https://snacks.robinhood.com/newsletters/7npBg6WCh7X1ssgq9cuRtt/articles/5KSLxwetQ3mOFHvXF6Jnl9) a $98/year rival to __[Amazon](https://robinhood.com/stocks/AMZN)__ Prime *this month*. Creatively-named Walmart+ perks include: same-day and 2-hour grocery delivery, product deals, and gas discounts. Walmart is the US grocery leader, but half its top-spending families now have Prime memberships. Walmart doesn't want to lose them to Amazon — it's hoping this perk-filled subscription will secure long-term grocery loyalty. 






__More turbulence ahead...__ __[United](https://robinhood.com/stocks/UAL)__ shares plunged on news it may have to [furlough](https://www.barrons.com/articles/united-airlines-stock-layoffs-furloughs-travel-coronavirus-newark-51594235139) almost half its US workforce, despite the billions of federal funds it received. Airlines that took $25B in federal payroll support aren't allowed to furlough, lay off, or cut pay until Oct 1 — United's holding off until then. But it's now burning through $40M *a day* on high costs and near-zero sales (__[American](https://robinhood.com/stocks/AAL)__ and __[Delta](https://robinhood.com/stocks/DAL)__ feel the pain, too). October layoffs could be on the horizon. 

__Blame the $2 hand sanitizer...__ __[Walgreens](https://robinhood.com/stocks/WBA)__ lost $1.7B last quarter — bummer, since it *made* $1B during the same quarter last year. The shift to sales of less-profitable items (like TP vs. prescription meds) and higher labor costs (like extra sanitizing) contributed to the huge profit decline. Now Walgreens is cutting 4K jobs. But it's *also* making a [$1B](https://snacks.robinhood.com/newsletters/6hhuCOY10qHk7z0tNQJNYE/articles/5aYSlp1wVeRDxLaMBqz3MY) investment on a big bet: in-store doctors offices. Walgreens is splurging on a 30% stake in a medical startup to get you in for checkups  (even when you're just trying to grab Doritos).




📲 🎵 TikTok's future (or lack thereof) 

__Beyond Impossible...__ We find the Simple Truth. Grocery giant __[Kroger](https://robinhood.com/stocks/KR)__ stuffs its supermarkets with name brand items, but complements Heinz and Pepsi with its own Kroger-branded (private label) products. It owns a plant-based meat brand called Simple Truth, but also sells non-Kroger brands (like __[Beyond Meat](https://robinhood.com/stocks/BYND)__ and __Impossible__). *Just in-stock*: some tasty alt-meat stats...


- __+75%:__ How much Kroger's plant-based meat sales [jumped](https://www.foodbusinessnews.net/articles/16393-plant-based-meat-placement-matters-says-kroger) last quarter. The number of alt-meat buyers popped 50%. 
- __+23%:__ How much Kroger's plant-based meat sales grew simply by moving the products from the alt-food section to the *meat* department. 


__Location, location, location...__ Retail products want that prime shelf-placement real estate. Nice packaging and quality do little to help a product's sales if it's tucked on the bottom shelf by the Aisle 87 bathroom. 

- __Placement matters extra__ for a non-mainstream product like plant-based meat. By placing it in the meat department, Kroger made it a real consideration for traditional meat shoppers.
- __Meat-eaters are the target:__ Alt-meat companies like Impossible [know](https://snacks.robinhood.com/newsletters/1OakXJF4N8DrV0FqU98KXR/articles/TGtJ9fDfvnbskIgjgPyVo/) they can't grow unless they target meat-eaters. "Flexitarians" that eat both animal meat and plant-based are key to taking plant-based mainstream.


_Kroger's competitor-crushing secret_

Plant

__Kroger has the same power that Apple has...__ *To give its products special treatment*. __[Apple](https://robinhood.com/stocks/AAPL)__ owns and controls the App Store — and it's being sued/investigated in Europe for allegedly [playing favorites](https://snacks.robinhood.com/newsletters/1dxqpvdRnz5eITeoT8vbeN/articles/2WdP7dj2TMzaTUWzOkSACV/) with its own apps in App Store search results (e.g. Apple Music #1, Spotify #5). Kroger owns its markets, but also competes in them with others' brands. It has the power to give its products special shelf placement. With the best shelf space and a lower price point, it's probably eating into Beyond and Impossible's growth. 

Kroger's alt-meat sales soar on real-meat shelf placement (but is it pulling an Apple?)

__Kleenex, Aisle 6...__ __[Walgreens](https://robinhood.com/stocks/WBA)__ lost $1.7B last quarter — for reference: it made a $1B profit during the same quarter *last* year. Foot traffic fell because of stay-at-home orders and those who came in were buying less-profitable items (like TP instead of beauty products). So to save cash, Walgreens is cutting 4K jobs in the UK and the stock still fell 8%.

__Skipping 10 years of med school...__ Despite the loss, Walgreens will [invest](https://www.wsj.com/articles/walgreens-to-open-doctors-offices-at-its-u-s-stores-11594209601?mod=business_lead_pos3) a whopping $1B over 3 years to open up 700 doctors' offices. It's invested in primary-care provider __VillageMD__ to bring sleek, zen-themed clinics *into* your Walgreens locations (half in medically underserved areas). Walgreens is splurging for the "short-term pain, long-term gain" strategy:

- __Sales of prescription drugs__ account for most of Walgreens' sales, but they've dropped off in the corona-conomy. 
- __60% of Americans live with at least one chronic condition__ that requires multiple daily medications.
- __By adding easy-access clinics__, Walgreens can drive sales for its profit-puppy prescriptions (and sell you toothpaste, while you're at it).


Medicate

__Healthcare is big retailers' Big Bet...__ for big profits. __[CVS](https://robinhood.com/stocks/CVS)__ acquired Aetna insurance in 2018 and is planning 1.5K "HealthHUB" clinics by 2021 (no doctors though). __[Walmart](https://robinhood.com/stocks/WMT)__ is doing something similar with its flat-fee primary care clinics (and it just [launched](https://www.cnbc.com/2020/07/08/walmart-quietly-registers-insurance-business-in-its-latest-move-into-health-care.html) a health insurance biz this week). All these retailers already have big physical footprints, and they figure adding healthcare into one-stop-shopping could drive growth.

Walgreens drops $1B to open hundreds of doctors offices — healthcare is its Big Bet

__How to make mortgages sexy...__ *Thinking, thinking*.... Include some space-travel imagery. __Rocket Companies__ (formerly less-sexy Quicken Loans) is the largest mortgage lender in the US. Back in 2010, Cleveland Cavs owner Dan Gilbert chose downtown Detroit for Quicken's HQ. That kinda catalyzed a renaissance for the Motor City because Quicken brought some fast-paced business growth with it. Now:

- __Rocket Cos just [filed](https://www.marketwatch.com/story/rocket-mortgage-parent-files-for-ipo-2020-07-07) to go public:__ The target valuation hasn't been announced, but it's likely in the tens of billions of dollars, [according](https://www.cnbc.com/2020/06/11/quicken-loans-the-largest-us-mortgage-lender-is-planning-an-ipo-sources-say.html) to #PFWTM (people familiar with the matter). 
- __Rocket Mortgage,__ the flagship biz, has doled out over $1 Trillion in home loans. Last quarter, sales more than doubled from a year ago — Now it controls 9% of the mortgage market.  

__How to make mortgages sexy (part 2)...__ There's an app for that. The Rocket Mortgage app was so popular, that Quicken decided to rebrand itself to Rocket. Kind of like the TurboTax of mortgages, Rocket's calculators hand-hold your way into seeing what home ownership means for your wallet. You can see how the digital-first focus is working with its target:

- __75%__ of Rocket users are 1st-time homebuyers, encouraged by low interest rates right now.
- __But the risk__ facing Rocket (and the whole mortgage industry) is how home sales could change dramatically in a longer recession.





Lend

__Local mortgage providers have big competition...__ Historically, getting a mortgage required meeting a guy/gal at a local bank in town. But in-person transactions have declined with the rise of financial software — and this decline is accelerating quickly in the corona-conomy. Rocket's app-based approach helps it lower costs and scale quickly, which is why it processed 3X as many mortgages monthly as a typical lender.