__Track record…__ Yesterday, __[Norfolk Southern](https://robinhood.com/stocks/NSC/)__ said that the February derailment of one of its trains — which spilled toxic chemicals into a small Ohio town — would likely [cost](https://www.washingtonpost.com/business/2023/04/26/earns-norfolk-southern/82658592-e42c-11ed-9696-8e874fd710b8_story.html) the company $387M, or about 12% of its profit last year. 

- __Cleaning up:__ The price tag includes $31M pledged to help local residents recover. So far, Norfolk said it’s spent $55M removing contaminated soil and water.

- __Lawyering up:__ That includes legal fees, because Norfolk faces lawsuits from the DOJ, Ohio, and shareholders, among others. 

__The issue runs deeper…__ than just one spill. The National Transportation Safety Board launched a special investigation into Norfolk’s general safety practices. The company’s workforce has shrunk by almost 40% since 2012, a steeper drop than that of rivals __[BNSF](https://robinhood.com/stocks/BRK.A)__, __[CSX](https://robinhood.com/stocks/CSX/)__, and __[Union Pacific](https://robinhood.com/stocks/UNP/)__. From 2013 to 2022, Norfolk’s accident rate spiked more than 80% — nearly 3X the industry average. The Ohio disaster has led to greater scrutiny of the rail industry’s safety practices. 

- __Accidents up:__ In the past decade, the seven major US freight railroad operators have had 27% more accidents. Lawmakers and safety officials point to an industry-wide strategy called Precision Scheduled Railroading, or PSR, as a reason for declining safety.

- __Profits up:__ PSR aims to boost profits by cutting costs and increasing efficiency through measures like lengthening trains (some up to 3 miles long), shrinking staff, and cutting inspection times.

Norfolk Southern’s derailed freight train in East Palestine, Ohio (NTSB/Xinhua/Getty Images)

Locomotion

__Financial efficiency can hurt operational efficiency…__ Since 2010, rail companies have paid shareholders almost $200B through dividends and stock buybacks. While PSR has helped rail corps haul in record profits, it’s also led to widespread safety problems and worker dissatisfaction. In December, President Biden blocked a nationwide rail strike that would’ve cost the US $2B/day.

Norfolk Southern puts a price on its Ohio derailment as rail safety practices come under greater scrutiny

__From Big Macs to Kraft mac…__ Americans aren’t giving up their comfort-food staples. Big food companies have crushed earnings expectations as consumers keep [paying up](https://www.wsj.com/articles/mcdonalds-pepsico-flex-their-pricing-power-dfe2e295?mod=business_lead_pos2) to eat up, despite significant price hikes. It’s a theme: 

- __[McDonald’s](https://robinhood.com/stocks/MCD/)__ beat estimates as US traffic grew for the third straight quarter, amid higher McMenu prices and inflated nuggets. Global same-store sales grew 13%.

- __[Chipotle](https://robinhood.com/stocks/CMG/)__ saw stronger-than-expected traffic and sales growth, while the burrito legend’s prices are up 10% from a year ago (guac = *extra* extra).

- __[Nestlé](https://robinhood.com/stocks/NSRGY/)__, the world's largest food company, also grew sales after hiking prices by about 10% as folks kept grabbing its Kit Kats, Hot Pockets, and "Nes" products (’presso, ’café, ’quik).

- __[Pepsi](https://robinhood.com/stocks/PEP/)__ lifted its annual sales forecast as demand for products like Gatorade, Cheetos, and Doritos stayed strong — after it raised prices by 13%.

- __[Coke](https://robinhood.com/stocks/COKE/)__ had bubbly results, too, as higher prices and rising demand fueled its bev sales. 

__I’ve got the (pricing) power…__ Pricing power = how much companies can raise prices *without* hurting demand. Food companies are flexing that power by showing that consumers are willing to pay more for their goodies, from brand-name sodas like Coke to affordable splurges like Egg McMuffins. Even during economic downturns, people tend to hold on to these little treats.

Bite

__Pricing power has its limits…__ because budgets can stretch only so far. McD’s said that diners in some markets have pushed back more than anticipated against higher prices, and customers are ordering fewer items. Coke noted signs of shifting buying habits, and said it plans to slow price hikes this year. As US retail spending dips, corporate price bumps could flatten.

Big foodies flaunt “pricing power” as consumers stomach higher costs (for now)

__Game changer…__ Yesterday, UK regulators [said](https://www.theverge.com/2023/4/26/23689252/microsoft-activision-blizzard-acquisition-blocked-uk-cma) they’d block __Microsoft__'s $69B acquisition of __[Activision Blizzard](https://robinhood.com/stocks/ATVI/)__, worsening the chances of the deal’s approval. Microsoft’s bid to buy the Call of Duty maker (which would be the largest tech deal *ever*) has been on ice as regulators worry the merger would hurt competition. The Xbox maker has [struck](https://sherwoodmedia.com/snacks/newsletters/3DpeGe1lyARbnRKJrQl0dF/articles/1NLpPKfmkzaijNqlW1eIyh/) deals with rivals like __[Nintendo](https://robinhood.com/stocks/NTDOY/)__ and __[Nvidia](https://robinhood.com/stocks/NVDA/)__ to share its gaming treasures to win support for the Activision-quisition.

- __Stiff odds:__ The FTC is still evaluating the merger after suing to block it in December, and the EU is set to make a formal decision next month.

- __High stakes:__ Microsoft’s already planning to appeal the UK’s decision, but if it fails (or if other regulators nix it) it’ll owe Activision $3B in break-up fees.

__Cloud cover…__ By some estimates, Microsoft already controls 60%+ of global cloud-gaming services, and its Xbox Game Pass has 25M+ subscribers. For reference: __[Sony](https://robinhood.com/stocks/SONY/)__'s PSNow cloud-gaming service had just 3M subs before it was replaced last year. Now regulators argue that Microsoft's ownership of Activision's billion-dollar franchises (like: Call of Duty, World of Warcraft) would make it tougher for others to compete.

__Buyers, beware…__ The UK’s decision is a rare win for supporters of Big Tech regulation, and it could prompt more crackdowns in the US, where major antitrust rulings have been scarce. As governments [get tougher](https://sherwoodmedia.com/snacks/newsletters/1UaryfLlNYafGqkVnZiU00/articles/4pzAi33V9xaok1Q7KIh3Rt/) on protecting competition, tech biggies may have to revisit their M&A strategies, or risk losing billions if they fail.

Microsoft’s $69B Activision takeover is in jeopardy after UK regulators blocked the potentially historic gaming deal

Dow Jones

S&P 500

Nasdaq

Bitcoin

Netflix reportedly lost 1M users in Spain last quarter as it intro’d a password-sharing fee

🚂 Norfolk’s mess raises alarms

__Victory Royale…__ __[Apple](https://robinhood.com/stocks/AAPL/)__ described its day in court versus __Epic Games__ yesterday as “a resounding victory” after 9 out of 10 of the Fortnite maker’s claims [were decided](https://www.cnbc.com/2023/04/24/apple-declares-victory-after-decision-reached-in-epic-games-appeal-.html) in Apple’s favor. Refresher: in 2020, Fortnite was booted from Apple’s and Google’s stores after it directed players to its own discounted payment system to bypass the “app tax.” Epic retaliated by suing both tech titans and making a dramatic “1984” [parody video](https://www.youtube.com/watch?v=euiSHuaw6Q4). The legal saga appears to be over: 

- __Not a mobile-opoly:__ Judges ruled that App Store policies *don’t* break federal antitrust laws. Apple won’t need to allow third-party app stores on iOS devices or change its fees.

__The one claim that got away…__ is the core of Epic’s suit. The ruling says Apple [*can’t* bar](https://www.reuters.com/legal/us-appeals-court-upholds-lower-court-order-forcing-apple-allow-third-party-app-2023-04-24/) developers from steering users to off-app purchasing pages to skirt the 15 to 30% fee that Apple skims off in-app purchases (picture: Beef Boss skins). Read: Epic could allow players to set down their shockwave hammers and leave the Fortnite app to pay outside Apple’s ecosystem. Fortnite hasn’t been on the App Store since 2020, but it could return this year.

- __Giving up a slice:__ Last year, Apple started allowing “reading apps” — including __[Netflix](https://robinhood.com/stocks/NFLX/)__, Audible, and __[Spotify](https://robinhood.com/stocks/SPOT/)__ — to steer customers to alt payment options. Now it’ll have to extend the policy to games, too, if it fails to appeal this week’s ruling.

- __Prob-llama:__ As of 2021, gaming apps made up about 70% of all App Store revenue. If game developers start linking out to other payment options, Apple’s lucrative biz could take a hit.

Tim cooked up a legal victory (Jerod Harris/Getty Images)

Skins

__The walled garden could show cracks…__ Apple (mostly) won this round, but scrutiny of its app-store dominance isn’t over. Authorities in South Korea, the Netherlands, and Japan forced Apple to allow third-party payment systems to be added to apps, and an EU law could mean iOS 17 will open the door to app downloads from third-party app stores (aka: “sideloading”).

Apple declares victory in its App Store battle versus Fortnite, but there’s a banana peel in its path

__From K-pop to K-drama…__ Yesterday __Netflix__ said it plans to [spend](https://www.reuters.com/technology/netflix-invest-25-bln-south-korea-make-tv-shows-movies-2023-04-25/) $2.5B over the next four years to produce South Korean shows and movies, doubling its investment in the market. Over *half* of Netflix viewers watched Korean content last year, and 40% of its most-watched non-English-language shows are Korean, from revenge drama “The Glory” to reality hits like “Single’s Inferno.” As Netflix rolls out its largest-ever lineup of K-content, __[Disney](https://robinhood.com/stocks/DIS/)__, __Amazon__, and __Apple__ are investing in the streaming K-wave. With good reason:

- __Untapped potential:__ Last quarter, Netflix added 1.5M paid subscribers in Asia Pacific, making it the fastest-growing region by far.

- __Red-jumpsuit mania:__ “Squid Game” was a phenomenon, earning a half dozen Emmys and becoming Netflix’s most watched show or film *ever* — topping 110M viewers.

- __Ram-Don gold:__ Korean dark comedy “Parasite” made Oscars history in 2020 as the first foreign-language film to win Best Picture. 

__From “Beef” to Black Pink…__ Korea has become a pop-culture powerhouse and entertainment leader. Just a few examples: K-pop band BTS added $5B/year to the Korean economy (nearly 0.5% of the country's GDP) as the mega-stars took over charts worldwide. This month, the group Black Pink made history as the first Asian band to headline Coachella.

K-wave

__One wave can reach many shores…__ South Korea’s entertainment industry isn’t only boosting the Korean economy; it’s also fueling international engagement for streamers as its popularity spreads everywhere. While Hollywood has long been the main purveyor of entertainment, Korea’s solidified its place as an industry leader.

Netflix is splurging $2.5B on South Korean content as a K-wave goes global

Amazon, Alphabet, Microsoft, and Meta make up about 15% of the S&P 500’s market value

🥇 Apple’s Epic “victory”

__Overflowing chip bowl…__ not talking Doritos. Stale chip demand could take a big [bite](https://www.cnbc.com/2023/04/24/samsung-q1-2023-earnings-preview-memory-chip-price-slump-hits-giant.html) out of __Samsung__'s earnings this week. The South Korean tech titan is the world’s largest producer of memory chips, which are used in everything from smartphones to computers to servers. Memory-chip prices dropped 20% last quarter as companies like Samsung slashed prices to cope with an industry-wide glut. Now the flip-phone icon expects its worst quarterly profit since 2009. 

- __Short circuit:__ Earlier this month, Samsung said it would begin a “meaningful” chip-production cut, following similar moves by rivals like __[Micron](https://robinhood.com/stocks/MU/)__ and __[Western Digital](https://robinhood.com/stocks/WDC/)__.

- __Unchipper:__ Semiconductor giants have been losing money on every chip they churn out. Samsung's chip unit is forecast to post a record $1.6B loss on Thursday.

__Boom and bust…__ Tech gadgets were hot commodities midpandemic as homebound consumers splurged on new PCs, TVs, and phones. But demand for $1K flat screens has cooled, hurting chipmakers (which boosted production to ease “the great chip shortage”). Now they’ve got *too many* chips. The industry is notoriously cyclical, but the latest oversupply is historic. 

- __Geek Squad problems:__ Last quarter, __[Best Buy](https://robinhood.com/stocks/BBY/)__'s profit fell 42%, and it hinted at slower sales ahead. __Microsoft__ expects a PC sales slump “for the foreseeable future,” and __[Apple](https://robinhood.com/stocks/AAPL/)__'s Mac deliveries plunged 40% last quarter (worse than its laptop rivals).

Too many chips, not enough dip (Jakub Porzycki/Getty Images)

Chip-dip

__Not all chips are created equal…__ It depends on what’s in demand. While appetite for personal devices like PCs and phones has cooled, demand for AI-powering tech is heating up. Chipmakers like __[Intel](https://robinhood.com/stocks/INTC/)__ and __[Nvidia](https://robinhood.com/stocks/NVDA/)__ are going all in on AI, and the AI hardware market could hit $90B by 2030 (up 8X from 2021). __Nvidia__ shares have surged on hunger for its AI chips, which are selling for up to 20X more than its gaming processors.

Samsung could post its worst profit in decades as the great chip shortage turns into a glut

__Clearin’ the cache…__ more like cash. China’s prepping its digital piggy bank to pay public workers in the city of Changshu (population 1.7M) *fully* in digital yuan (#digi-yuan) starting next month. The project will affect all public workers, from teachers to government officials — and marks the country’s [biggest push](https://www.cnn.com/2023/04/24/economy/china-digital-yuan-government-salary-intl-hnk/index.html) to circulate its digital currency.

- __Number yuan:__ Back in 2021, China [became](https://sherwoodmedia.com/snacks/newsletters/5gmxJQUqpvzHWE4CeHvylQ/) the first major economy to launch an e-currency. Over 100 countries, including the US, have been playing catch-up since.

- __Mixed reaction:__ Changshu’s digi-yuan project is trending on Chinese social media. While some say it could help curb government corruption, others worry that older people will struggle to take their finances online. 

__Sorry, anon…__ All digi-yuan transactions are recorded on a digital ledger that’s monitored by the Chinese government, giving the surveillance state even tighter control (picture: digi-yuan expiration dates to boost spending). Chinese citizens lead the way in global mobile-payment adoption, but getting them to use digital *yuan* could depend on integration with payment superapps:

- __Tap to pay:__ Alipay and WeChat Pay each have 1B+ users and process hundreds of billions of dollars’ worth of annual transactions. China has struggled to get its citizens to use its digi-yuan app, because most of them use superapps for payments and social interactions.

- __Competing with corporate:__ The digi-yuan was tested as an express payment option on Alipay last year, and China could exert greater pressure on tech companies to fully integrate it.

Digi

__The e-conomic race is on…__ China, India, Nigeria, and a handful of other countries have launched digital currencies. Now China is positioning the digi-yuan for international use, which could offer an attractive alternative to the US dollar for sanctioned countries like Russia. Meanwhile, the US Treasury is [reportedly](https://markets.businessinsider.com/news/currencies/cbdc-dollar-treasury-crypto-stablecoin-digital-trm-government-token-currency-2023-3) close to finishing its development of a digital dollar, which could give millions of unbanked Americans access to digital payments.

China plans its biggest digital-currency rollout, accelerating the global race to turn cash into code

Last year, global military spending hit a record $2.2T

📱 The great chip glut

__Not just platinum problems…__ Last week __[American Express](https://robinhood.com/stocks/AXP/)__ said it had set aside $1.1B — way more than expected — to cover potential loan losses. Amex isn’t the only lender worried about delinquencies. US consumer debt hit a record $4.82T in February, and Americans are starting to fall behind on credit-card and loan payments. Driving the IOU pileup: pandemic savings have dried up, wages are lagging behind inflation, and rising interest rates have become a national frenemy. 

- __Enemy/friend:__ Folks hate high rates on their debt (picture: car payments at 15-year highs), but they dig higher returns on their savings.

- __APYes:__ Last month the average annual percentage yield (aka: return) for online savings accounts reached 3.75%, up from just 0.5% a year earlier.

- __Interest chasing:__ 30% of US customers moved $$ between banks last month, and a third of those said they were searching for a higher APY — which also just hit a 15-year high. 

__Smilin' while they're cryin’...__ The double-edged sword of higher rates is jabbing banks too. Last quarter, the four largest US lenders wrote off $3.4B in loans (up 73% on the year) as consumers struggled to pay down debts. __[Citi](https://robinhood.com/stocks/C/)__, __[JPMorgan Chase](https://robinhood.com/stocks/JPM/)__, and __[Wells Fargo](https://robinhood.com/stocks/WFC/)__ recently set aside a combined $2B to cover potential loan losses. But there’s a corporate plus side to climbing rates: this month, those same banks reported expectation-busting earnings as rising rates on customer loans (like mortgages) padded their coffers. They expect profits to increase if hikes continue.

Good interest, bad debt (jayk7/Getty Images)

CA$H

__Cash is cool again…__ Now that investors can earn higher interest on their cash, some are parking more $$ in interest-bearing accounts like money-market funds and savings. That can be bad news for stocks, since investors demand higher returns from equities to justify the changed opportunity costs. Meanwhile, banks are competing to offer higher APYs than rivals as the Fed continues raising rates. At least one more hike’s expected in May.

The double-edged sword of rising rates has consumers chasing interest and collecting IOUs

__Big tech on deck…__ __[Google](https://robinhood.com/stocks/GOOGL/)__, __[Microsoft](https://robinhood.com/stocks/MSFT/)__, __[Amazon](https://robinhood.com/stocks/AMZN/)__, and __[Meta](https://robinhood.com/stocks/META/)__ are set to report, but slow growth (and high costs) could zap results. Last quarter, Microsoft missed sales expectations as PC and cloud demand cooled. Google disappointed as YouTube ads sagged. And despite Meta's cost slashing, analysts expect it to report its sixth straight quarter of declining profit. Tech stocks have jumped this year on hopes that the Fed would start cutting rates, but it may not be enough for a profit rebound.

__Next stop…__ cleanup. __[Norfolk Southern](https://robinhood.com/stocks/NSC/)__ will report for the first time since one of its trains derailed in Ohio in February. The rail giant faces suits from the DOJ and Ohio, among others, after the disaster spilled toxic chemicals. Norfolk says it’s paid out $28M for cleanup so far, but the full price tag could be much higher. Since 2012, Norfolk’s workforce has shrunk 39% and its accident rate has spiked 80%. Experts think understaffing could be an industry-wide challenge. Last week, rival __[Union Pacific](https://robinhood.com/stocks/UNP/)__ delivered muted #s.

Events

Coming up this week

__Fake Drake, real problems…__ Last week, an AI-generated [song](https://sherwoodmedia.com/snacks/newsletters/uzEZxUPPSYMbU0vFmw7x6/articles/6gm3kr2ZvPPHvH6m9HMS9K/) featuring the voices of Drake and The Weeknd racked up millions of streams across TikTok, YouTube, __[Spotify](https://robinhood.com/stocks/SPOT/)__, and other platforms. __Universal Music Group__, the world’s largest label, which reps the artists, had the song taken down on infringement grounds. Then *another* Drake fake was uploaded. Labels like UMG, __[Warner](https://robinhood.com/stocks/WMG/)__, and __[Sony Music](https://robinhood.com/stocks/SONY/)__ have aggressively protected their music (think: YouTube vids removed), but AI tracks could be a game of Whac-a-Mole until rules are established. 

__Selling the forest for the trees…__ just in time for Arbor Day. American logging titan __[Weyerhaeuser](https://robinhood.com/stocks/WY/)__ has found a profitable new venture in carbon offsets: credits that can be bought by companies to counteract their industrial emissions. A Wall Street Journal [report](https://www.wsj.com/articles/weyerhaeuser-logging-carbon-emissions-offset-market-environment-76850c01) found that the tree-chopping lumber producer is selling the CO2-sponging abilities of its 10.6M acres of forest to companies looking to cut emissions. But critics say the environmental-benefit math is fuzzy. The logger expects to generate $100M/year selling offsets by 2025.

Zoom out

Stories we’re watching

- __[Beef](https://sherwoodmedia.com/snacks/newsletters/4sfDTlSxcdd08EIrnBUeZN/articles/3C63s0BazHEPyP2yeDtwqM/):__ __[Netflix](https://robinhood.com/stocks/NFLX/)__ added 1.7M subs last quarter, fewer than half what Wall Street was expecting. But the streamer hopes its password-mooching crackdown will fuel growth once the “cancellation reaction” wears off.

- __[Cut](https://sherwoodmedia.com/snacks/newsletters/C6iqmgjbPZvinLvNy5aW9/articles/7IZVFG7vLrLUdDAEfQHDx7/):__ The Writers Guild of America approved a strike if an agreement isn’t reached with studios by May. Streaming has led to a drop in writer payouts, but old rules may be catching up to disruptors.

- __[Angst](https://sherwoodmedia.com/snacks/newsletters/C6iqmgjbPZvinLvNy5aW9/articles/qAbjItXhlorcEgsK92dKc/)__: Gen Z and millennials are racking up record debt as financial avoidance leads to retail therapy and the bar for “doing OK” rises. US workers are now demanding a minimum of $76K to start a new job.

ICYMI

Last week's highlights

In 1991, Mall of America gave Sears a 100-year lease on a three-story spot for $10/year

⚔️ Double-edged rate sword

__Nice for bot…__ ICYMI: an AI-generated song featuring the voices of Drake and The Weeknd went viral this week. “Heart on My Sleeve,” posted on TikTok by a bed-sheet-clad user called Ghostwriter977, racked up [millions](https://www.axios.com/2023/04/19/ai-fake-drake-weeknd-song-streaming-services-removed) of streams across YouTube, __[Spotify](https://robinhood.com/stocks/SPOT/)__, Apple Music, and other platforms. The ghostwriter said they wrote and produced the verses for the AI-generated vocals. Then came the takedowns: 

- __Universal Music Group,__ the world’s largest label, which reps Drake and The Weeknd, had the song removed from platforms.

- __Legal verse:__ Universal said “the training of generative AI using our artists’ music” violates copyright law and that “we will not hesitate to take steps to protect our rights and those of our artists.” 

__Fake Drake(s) aren’t the only problem…__ Universal was quick to act, but now *another* Drake fake (“Winter’s Cold”) has hit the internet. Labels like UMG, __[Warner Music Group](https://robinhood.com/stocks/WMG/)__, and __[Sony Music](https://robinhood.com/stocks/SONY/)__ have been effective in aggressively protecting their music (think: YouTube videos and Insta stories being taken down or demonetized). Platforms like YouTube scan videos to see whether they contain copyrighted content, so identification is nearly instant. But AI tracks could be harder to spot. For consumers, it’s also tough to know if a track is authentic because Auto-Tune (used to synthetically improve tracks) is so prevalent.

Champagne Papi meets AI copies (Frazer Harrison/Getty Images)

Drizzy

__It may be endless Whac-A-Mole…__ until hard rules are established for AI-generated content. Copyright issues will likely keep popping up, and not just for the music industry: [media publishers](https://sherwoodmedia.com/snacks/newsletters/ZFPm5hIgbozaPl1FkBr62/) are said to be gearing up for a showdown with __[Microsoft](https://robinhood.com/stocks/MSFT/)__, __[Google](https://robinhood.com/stocks/GOOGL/)__, and __OpenAI__, demanding compensation for use of their articles. Meanwhile, [AI-art lawsuits](https://sherwoodmedia.com/snacks/newsletters/31MZjQaxwyvgzBaiazKUYy/articles/6JYfIJADVE53b21M5kUtl1/) could set precedents for bots trained on copyrighted artwork.

An AI-generated “Drake” song raises alarm bells for labels like Universal Music

__Meatballs and measuring tape…__ Yesterday __Ikea__ said it would invest $2.2B to build up its US biz — its biggest investment *ever* in a single country. Over the next three years, it plans to roll out 17 new stores, creating 2K+ US jobs. The Swedish sofa king also plans to bulk up its fulfillment centers. It notched record sales last year and has slowly grown its market share in the US (its second-largest market by sales after Germany). Now Ikea’s hoping its trendy “low cost, high quality” furniture will turn the US into its top market. 

- __DIY:__ Ikea’s planning to open nine "plan and order points," studios where shoppers can meet with specialists to design their dream home (but have the furniture delivered).

__The great home retreat…__ (not the relaxing kind). Home-furnishing spend has plunged since the pandemic as people ditch home-office builds for Cabo trips. Furniture-store sales generally dipped 2.4% in March from a year ago. The slowdown is starting to nail some of Ikea’s rivals: last quarter, __[Home Depot](https://robinhood.com/stocks/HD/)__ missed its sales expectations for the first time since 2019. __[TJX](https://robinhood.com/stocks/TJX/)__'s HomeGoods saw a 4% sales dip, and __[Bed Bath & Beyond](https://robinhood.com/stocks/BBBY/)__ is reportedly days from filing for bankruptcy. Online furniture retailer __[Wayfair](https://robinhood.com/stocks/W/)__ lost 5M customers last year and posted a $1.3B loss.

Balling

__One brand’s loss is another brand’s opportunity…__ Ikea’s US biz alone racked up nearly $6B in sales last year, attracting some 70M shoppers in stores and about 500M visits online as it kept prices stable compared to rivals. Now, as competitors like Wayfair cut jobs and scale back, Ikea’s doubling down to grow its market share.

As the home-furnishing boom fades, Ikea’s splurging $2B to take over American living rooms

📜 __Policy…__ European lawmakers [approved](https://www.bloomberg.com/news/articles/2023-04-20/eu-s-mica-crypto-regulations-clear-final-parliament-vote) sweeping crypto regs (meet: MiCA) that are expected to take effect this summer. The rules will allow registered companies to operate across the EU, and have been hailed by crypto cos. About that…

🌶️ __Spicy…__ __[Coinbase](https://robinhood.com/stocks/COIN/)__'s CEO said the biz might [exit](https://www.barrons.com/articles/coinbase-ceo-leave-us-stock-crypto-regulation-6d81c3ce) the US in search of greener regulatory pastures, and that a move to the UK is "on the table." The exod-US isn't all bluster: Coinbase [reportedly](https://fortune.com/crypto/2023/04/19/coinbase-gets-bermuda-license-plans-to-launch-offshore-exchange-in-coming-weeks/) plans to launch an offshore exchange.

🧳 __Movin'…__ __Kraken__'s been hit with the travel bug too. The exchange, which earlier this year agreed to a $30M SEC settlement and killed its staking program, [scored](https://fortune.com/crypto/2023/04/18/kraken-digital-asset-license-ireland-vasp-crypto-abroad-crackdown/) a license to operate in Ireland.

VACAY

The Crypto Catch-Up…

New York City has the world's wealthiest population with 340K millionaires

🎵 Fake Drake, real problems

__RIP red-envelope DVDs…__ this one’s for you. __Netflix__ shares dipped yesterday, and not because the streamer announced it’s ending DVD rentals (was still a thing). It added only 1.7M new subscribers last quarter — fewer than half what Wall Street was expecting. Netflix said subscriber growth would be similar this quarter, but hopes for brighter days ahead. 

- __Play next…__ ad. After rolling out in November, Netflix's $7/month US ad-tier now earns more revenue per subscriber than its standard plan, which costs twice as much.

- __Three months left…__ to use your ex’s password. Netflix delayed its global “paid sharing” plan (ahem, password-mooching crackdown) in the US and other major markets until June. It doesn’t expect the extra $$ to kick in till the third quarter. 

__Are you still watching…__ on Mom’s account? 100M people use someone else's Netflix without paying. In February, the streaming icon launched its paid-sharing plan in countries including Canada, Spain, and New Zealand. Cue: searches for “cancel Netflix account” soared 8X. FYI: nearly two-thirds of zillennials have canceled a streaming sub in the past six months. 

- __But Netflix said the initial “cancel reaction”__ was followed by a boost in subscriptions and revenue. Canadian subs have grown since the crackdown, despite it costing $8/month to add new users to accounts — and revenue there is growing faster than in the US.

The beef is with the password crackdown (Michael Buckner/Getty Images)

Share

__Good content captures eyeballs…__ but must-see content captures wallets. No one wants to pay yet another monthly subscription fee. But Netflix hopes that its multibillion-dollar content budget (and loyal watchers of series like “You” and “Outer Banks”) will shell out to stay. While the “cancel reaction” could lose casual watchers, it may add lifelong subscribers.

Netflix posts anticlimactic results, but hopes its mooching crackdown will fuel growth


__“Cause it's like you're my mirror”…__ but maybe not for long. __[Lululemon](https://robinhood.com/stocks/LULU/)__ [reportedly](https://www.cnbc.com/2023/04/18/lululemon-sale-mirror-hydrow.html) wants to offload its in-home-fitness biz, Mirror, to its competitor __Hydrow__. The soft-pants producer bought the exercise startup for $500M in 2020 as living-room sweat sessions drove sales (goodbye suits and gym memberships, hello leggings and __[Pelotons](https://robinhood.com/stocks/PTON/)__). Now the 70-pound wall-mounted “mirror,” which displays fitness classes, is weighing down profits.

- __Self-reflection:__ In its last reported quarter, Lululemon said it took a nearly $443M impairment charge related to Mirror.

- __Losing more than a few pound$...__ Lululemon discounted the Mirror device to $1K (down from $1.5K) as sales came in below expectations.

__Buffing out the profit problem…__ Mirror's drag on earnings has threatened to sour Lulu's otherwise sweet business. Last month the company's stock stretched up after it beat expectations (picture: a 30% sales jump) and shared rosier-than-expected guidance. Other comfy-first brands that saw a pandemic bump (like __[Crocs](https://robinhood.com/stocks/CROX/)__) have likewise seen customers hesitant to shift back to “hard clothes.” But Lulu's rush into hardware hasn't aged as well as its leggings

Jeff Greenberg / Getty Images

BADLUCK

__Striking while the iron's hot can get you burned…__ when the fad cools. At the height of the pandemic, home-exercise tech was a must-have. Peloton went into overdrive trying to keep up with demand for its stationary bikes, and Lulu scrambled to get in on the action with Mirror. But Peloton ended up with a mountain of unsold bikes, and Lulu with Mirrors gathering dust. From indoor bikes to the metaverse to AI, brands that go big on the hot new thing risk mistaking flash-in-the-pan fads for long-term trends.

Lululemon moves to shed Mirror as a pandemic-era home-fitness bet shows cracks

India has surpassed China as the most populous country

🎬 Netflix’s mooching cut

__EXT. HOLLYWOOD — DAY…__ In a nearly unanimous vote this week, 9K members of the Writers Guild of America [approved](https://www.nytimes.com/2023/04/17/business/media/hollywood-writers-strike-vote.html) a TV and movie writers strike if a new contract agreement isn’t reached by May 1 with studios (aka: their employers). A record 80% of WGA members turned out to vote, signaling clear dissatisfaction among the teams creating your fave shows.

- __Buffering:__ Streamers like __[Netflix](https://robinhood.com/stocks/NFLX/)__ and __[Disney](https://robinhood.com/stocks/DIS/)__+ are playing a major role in the negotiations. Streaming has led to shorter TV seasons and exclusive rights, causing a steep drop in residual payouts to writers (watching “Succession” five times doesn’t count as a rerun). The WGA wants a new formula to account for the shift.

- __WG-AI:__ The union also wants studios to regulate the use of AI — and to bar studios from lowering pay or reducing rights and credits for content that leverages the tech.

- __Not guaranteed:__ The WGA authorized a strike in 2017 but ultimately reached a last-minute deal to avoid one. The last WGA work stoppage, in 2007, lasted three months and cost California over $2B.

__Lights, camera, no action…__ While a strike isn’t certain, Hollywood is making moves to prepare. Streaming platforms have several shows wrapped and ready to roll out in the event of a stoppage, and renewals to shows like “Abbott Elementary” were given out earlier than usual. Networks are also bulking up on animated shows (which are written far in advance) and unscripted TV (maybe Netflix can figure out live reunions by May).

Show business, meet show labor (David McNew/Getty Images)

Scene

__Old rules can catch up to disruptors…__ Now that streaming has transitioned from industry disruptor to industry standard, evading old issues that networks and studios know well (like labor disputes) can only last so long. Similar battles are underway in other tech-disrupted industries like ecomm and ride-hail (think: __[Uber](https://robinhood.com/stocks/UBER/)__'s gig work and taxi union issues).

The WGA approves a Hollywood writers strike, signaling a potential shift for streaming

__Self-soothing with an Amazon order…__ But seven pairs of Crocs won’t help the real problem (neither will that popular fluffy [headband](https://www.wsj.com/articles/tiktok-headband-versed-1d6484e5)). US consumer debt hit a record high of $4.8 *trillion* in February as inflation-strapped Americans took out high-interest loans and maxed out credit cards. The IOU blues are [especially](https://www.wsj.com/articles/young-people-avoid-facing-their-finances-more-than-ever-e853910e?) bad for younger generations:

- __Pricey cold-brew habit:__ Millennials’ average credit-card debt rose nearly 30% in March from a year earlier, hitting a whopping $5.8K, Credit Karma reported.

- __Thrifting or splurging?__ Gen Z’s average credit-card debt soared 40% to $2.8K as Shein hauls and Celsius habits weighed down balances. 

__Need those fuzzy slides…__ to ease the sliding state of finances. April is financial literacy month, but many appear to be choosing “financial avoidance” instead. Sticky inflation, high interest rates, and dwindling savings have fueled anxiety. Psychologists say that ignoring your finances and overspending to cope with stress is typical among younger generations. The pandemic just made it more common. 

- __Saw it on TikTok:__ Social media has exacerbated zillennials’ splurge cycle. Lots of younger users make purchases based on influencer recs, a recent Pew survey suggested. And over 60% of users said they regretted a social-inspired impulse purchase, Bankrate found.

Charge

__The bar for “doing OK” is a lot higher…__ In December, over half of Americans earning more than $100K/year said they lived check to check. As prices rise faster than wages, US workers are demanding a minimum of [$76K](https://www.bloomberg.com/news/articles/2023-04-17/wage-floor-for-us-workers-at-record-76-000-in-ny-fed-survey?srnd=premium) to start a new job — up $2K+ from November. Meanwhile, the overconsumption cycle has also raised the bar for getting by.

Gen Z and millennials rack up record debt as “financial avoidance” leads to retail therapy

20% of Americans who've used buy now, pay later apps have used them to pay for groceries

🍿 Streaming strike

__New nest, who dis…__ __Rovio__, the company behind viral bird-chucking game Angry Birds, yesterday agreed to be [bought](https://www.wsj.com/articles/angry-birds-maker-to-be-bought-by-sega-cd5157b6?mod=hp_lista_pos1) by __[Sega](https://robinhood.com/stocks/SGAMY/)__ for about $776M. Sega is the legendary Japanese console and game maker behind franchises like Sonic the Hedgehog. Now it wants to take its IP to the small screen by tapping Rovio's mobile-game expertise and iconic franchise. 

- __Good egg:__ Angry Birds, launched in 2009, apparently became the first mobile game to be downloaded 1B times. Since then, it's been spun off into movies, cartoons, and more.
- __Your Angry Bird is waiting…__ Sega can leverage Rovio’s “live service” strategy, which uses frequent game updates to keep players coming back (think: notifications). And Rovio can use Sega to expand to non-mobile platforms.

__Mobile-gaming madness…__ The pandemic sparked a surge in scrolly-tappy gaming as couch-bound players splurged on extras like custom avatars and power-ups. Mobile-gaming revenue (finally) cooled 6% in the first quarter of last year, but was still up nearly 30% from prepandemic level. Now old-school gaming companies want in: 

- __Sweet deals:__ Last year __[Take-Two](https://robinhood.com/stocks/TTWO/)__ bought Farmville maker __[Zynga](https://robinhood.com/stocks/ZNGA/)__ for a whopping $12.7B. And in 2019 __[Activision](https://robinhood.com/stocks/ATVI/)__ snatched up Candy Crush parent __King__ for nearly $6B. 
- __Palm-sized:__ __[Nintendo](https://robinhood.com/stocks/NTDOY/)__ has already made billions from dropping smartphone versions of its popular console brands (think: Pokémon GO and Mario Kart Tour). 

On my way to steal your chick (Noam Galai/Getty Images)

Nested

__Small screens can turn into big hits…__ Sega predicts that by 2026 mobile games will make up 56% of the global gaming market (up from 53% last year). By snatching up smaller companies with franchise buzz, companies like Sega can also cash in on franchises (like movies, shows, and toys). This month, Nintendo’s “Super Mario Bros. Movie” became the highest-grossing video-game flick of all time. 

Sega buys Angry Birds for $776M as OG game makers go big on mobile franchises

__AI of the tiger…__ __[Google](https://robinhood.com/stocks/GOOGL/)__, in a (sort of) cautious sprint to maintain its search dominance, is [planning](https://www.nytimes.com/2023/04/16/technology/google-search-engine-ai.html) to launch a batch of AI-powered search features, The New York Times reported. The botty features (codename: “Magi”) are set to be rolled out to 1M US users next month — and 30M by year’s end. Google’s testing the waters for its broader plan to launch a brand-new engine: 

- __New-gle:__ There’s no ETA for Google’s AI-powered search engine, but it would reportedly be more conversational and personalized, and anticipate what users want to see based on past searches.
- __Slew-gle:__ Google’s working on slew of other AI projects, including a tool to generate images in Google Image results, a language-learning chatbot called Tivoli Tutor, and a Chrome assistant called Searchalong.

__Bot anxiety…__ The AI race poses a serious threat to Google’s $162B search business, and rivals like __[Microsoft](https://robinhood.com/stocks/MSFT/)__'s Bing chatbot apparently have the company panicking. News that __Samsung__ might make Bing the default search engine on its devices — a potential $3B loss in revenue — sent __Google__ stock sliding as much as 4% yesterday. A similar __[Apple](https://robinhood.com/stocks/AAPL/)__ contract, worth $20B, is up for renewal this year. Losing its default status on devices like iPhones and Galaxy phones would be devastating for Google.

Search

__It’s hard to stop midrace…__ Hurtling ahead to keep up with the AI pack, Google says it’s trying to move rapidly, safely, *and* ethically all at once — a tough needle to thread. In a “60 Minutes” interview on Sunday, CEO Sundar Pichai warned against rushing out AI products without regulation. But that might be hard to do with competitors bolting ahead. 

Google’s taking a tortoise-and-hare approach to the AI-powered search race

__A tricky Bittr-exit…__ SEC regulators yesterday [accused](https://www.coindesk.com/policy/2023/04/17/crypto-exchange-bittrex-violated-federal-laws-sec-charges-in-lawsuit/) __Bittrex__ of violating federal securities laws, saying the crypto exchange sold securities (and therefore should’ve registered with the commission). The Seattle biz was already planning to cease US operations by month’s end, and had pointed a finger at regulators as a key factor driving its exod-US. Bittrex said it would "vigorously defend" itself against the charges. 

__Not the first, probably not the last…__ Bittrex joins a growing list of crypto companies targeted by US regulators after __FTX__'s collapse. Last month the SEC reportedly told __[Coinbase](https://robinhood.com/stocks/COIN/)__ it was [considering](https://snacks.robinhood.com/newsletters/XV2nKUGd5DMTWDzADnDXy/articles/29eKBjymymQ1oqSGNKt766/) legal action, and the [CFTC](https://snacks.robinhood.com/newsletters/5tWO7MybQ6hruclDYZW4bS/articles/2IF7a4zafGF2KA53v4mz4z/) sued __Binance__. Earlier this year, __Kraken__ axed its staking program for US customers and paid $30M to settle claims that it failed to register with the SEC. Meanwhile, the SEC continues to hire more lawyers for its crypto-enforcement unit.

BITE

__Leaving the court doesn't end the game…__ Bittrex's planned US exit didn't stop regulators' pursuit, and any crypto company considering relocating still risks litigation for past actions. Now both companies and lawmakers are seeking clearer crypto rules. But crypto-focused bills that would’ve provided added regulatory clarity stalled last year. In their place, the rules might be set by a tangled string of lawsuits and court cases. 

The SEC hit Bittrex with charges as the crypto exchange was packing its bags to leave the US

A piece of human brain tissue the size of a grain of sand contains 100K neurons and 1B synapses

🎮 Angry Birds’ new nest

__’Tis the season…__ but it may not be so jolly. Earnings season is upon us, and expectations aren’t high for the first-quarter stocking. Quarterly profits from S&P 500 companies are expected to have dropped 6.8% from last year — that would be the sharpest earnings decline since lockdown-era 2020 and the second straight quarter of falling profit. Meanwhile, analysts expect that sales inched up a measly 1.8%. But the kickoff to earnings season pleasantly surprised: 

- __Bank buster:__ On Friday __JPMorgan Chase__ and __Citi__ reported stronger-than-expected #s, with JPM posting record revenue and a 50% profit surge on higher interest rates. 
- __Stocking stuffer:__ Despite less-than-stellar earnings expectations, the S&P 500 is up 8% for the year, while the techy Nasdaq has gained 17%. 

__Growth at all costs < profit at *less* cost…__ Soaring interest rates and sticky inflation have eaten into profits and cooled demand. Cue: companies are shifting away from growth-driven investments to focus on cost-cutting profit boosters. It’s “the year of efficiency,” __Meta__ CEO Zuck says. Corporate titans are tightening their belts to prep for a downturn. Last week the Fed said it expected that the banking-crisis fallout would tip the US into a recession this year. 

- __Cold-brew cuts:__ In addition to sweeping layoffs, companies like Meta, __Goldman Sachs__, and __Salesforce__ have cut cushy employee perks like barista-brewed coffee. __Google__ is swapping pricey MacBooks for Chromebooks. 
- __Robo-savings:__ Companies like __Disney__ and __Microsoft__ are backtracking on big bets like the metaverse. Instead, corporations are investing in things that could reduce costs long term (think: __Walmart__ and __Amazon__ leaning into warehouse automation). 


Busy week on Wall Street (Mario Tama/Getty Images)

__“How low will you go” is the question…__ on investors’ lips. They’ll be listening for guidance about how much lower corporate profits could fall. If companies signal further declines ahead, this year’s rally could reverse. But if cost-cutting measures start to show up on earnings reports as improving profits, markets could be pleasantly surprised.

Earnings-season forecasts are dim for America’s biggest companies as profits get pressured

__Biscoff cookies en route to Cabo…__ __United Airlines__ and __Alaska Air__ may have reason to join the spring-break party when they report this week. While US airline fares are up 17% on the year, travel demand is still taking off. The TSA's expecting a record-breaking year for flights, and analysts think this may be airlines' busiest spring ever. Last week __Delta__ unloaded a quarterly loss, but projected strong growth and profit ahead. It expects record advance summer bookings as consumers prioritize [delayed YOLO](https://snacks.robinhood.com/newsletters/1UaryfLlNYafGqkVnZiU00/articles/37SFbEAZ3QyWYdncUFOaA1/) experiences. 

__It’s finally here…__ Tuesday is the deadline to file tax returns for most Americans (many residents of CA, GA, and AL have until October). And it may be the last go-around for what you could call “IRS 1.0.” Over the next two years, the IRS will use billions in federal funding to upgrade its ’60s-era tech and hire 20K new employees. For you: faster returns and shorter phone wait times. Next tax year, the IRS will require anyone earning $600+ on payment apps (for goods and services — not from splitting checks) like Venmo to report it. 

__An apple a day…__ keeps the bills away. More Americans could see a boost in their credit scores after credit agencies scrapped 70% of all medical debt in collections. Last year, __Experian__, __TransUnion__, and __Equifax__ removed already paid medical debt from millions of credit reports. Last week they took it a step further by removing all *unpaid* debt up to $500. Nearly a tenth of US adults owe at least $250 in medical debt, but many don’t notice until it dings their credit score. The move could provide relief at a time when US households carry record debt. 

__Still watching…__ Votes will be counted today to see if the Writers Guild of America will strike in the event that a new contract agreement isn’t reached with studios by May 1. If the WGA strikes, we could see a repeat of the last screenwriting stoppage in 2007, which lasted 100 days. On the table: shortened TV seasons, cancellations, and a bump in unscripted content (imagine: more “Love Is Blind”). A strike would be a headache for streamers who are hungry for the next “Succession.” They’re expected to splurge $23.4B on scripted titles this year.

- __[Stuck](https://snacks.robinhood.com/newsletters/1UaryfLlNYafGqkVnZiU00/articles/4pzAi33V9xaok1Q7KIh3Rt/):__ __Amazon__'s $1.7B deal to buy Roomba maker __iRobot__ is gathering dust as the FTC gets tougher on mergers. As antitrust gets anti-er, companies might think twice before snagging startups.
- __[Oops](https://snacks.robinhood.com/newsletters/Ku8oHOygOUFBElNxmnQHt/articles/2e3J0mmmxTJv7LWksc4Fd7/):__ __Samsung__ workers reportedly leaked secret company info while asking ChatGPT for help. Nearly half of companies (and the Biden admin) are exploring guidelines for AI-chatbot usage.
- __[Volt](https://snacks.robinhood.com/newsletters/3ITpC4k9Ogb756gLlOX7Ht/articles/3QQUl0m7n653lLXE6UcpIp/):__ __Tesla__'s building a Shanghai “Megapack” plant to build more energy-storage solutions for businesses and homes. Rising energy demand could fuel Elon’s biz as EV growth slows. 


In nearly half of US marriages, women earn about the same as their spouse — or more

🔮 Earnings-season forecast

__Biscoff cookies and Coca-Cola…__ a match made in cabin. __[Delta](https://robinhood.com/stocks/DAL/)__ unloaded first-quarter earnings yesterday. The Atlanta-based carrier posted a chunkier-than-expected loss, partly driven by extra costs like raises for pilots and employee bonuses. But Delta said it saw sunnier skies ahead, and [forecast](https://www.cnbc.com/2023/04/13/delta-air-lines-dal-earnings-q1-2023.html) upbeat sales growth and profit for the spring. 

- __Booked Italian summer (in March):__ Delta projected record advance summer bookings as consumers continue to prioritize travel, planning trips months in advance.

- __Champagne and free socks:__ First- and business-class sales (think: premium products) made up over half of Delta’s revenue as $4K splurges on bed-like seats beat out economy spending.

- __Charge it to corporate:__ Delta said business-travel bookings have been rebounding, with US corporate sales in March at 85% of prepandemic levels.

- __Cloudy:__ Still, Delta, __[JetBlue](https://robinhood.com/stocks/JBLU/)__, and other airlines are dialing back growth plans and routes as airport labor shortages and congestion limit capacity. 

__Only 47 days left ’til check-in…__ Consumers are upping their travel spending, despite cutting back in other areas. While inflation has been steadily cooling, travel costs are still sky-high: US airline fares rose 4% from February to March, and are up 17% on the year. Spring break 2023 is expected to be the busiest travel season *ever* for airlines, and the TSA expects demand to keep soaring throughout the year. Last quarter, Delta’s advance cash bookings were up nearly 20% from prepandemic levels, and CEO Ed Bastian said he doesn’t see a pullback on the horizon.

Springin’ for spring break (Anadolu Agency/Getty Images)

Cabo

__Delayed YOLO > YOLO…__ because everyone wants something to look forward to. Consumers are cutting back on instant-gratification buys like new iPhones and online-order clothing binges in favor of delayed-gratification experiences like summer vacays. We’ll get another window into the travel sector when __[Alaska Airlines](https://robinhood.com/stocks/ALK/)__ and __[United Airlines](https://robinhood.com/stocks/UAL/)__ report next week.

Delta enjoys higher bookings as consumers splurge on “delayed YOLO” experiences

__Stuck under the couch…__ __[Amazon](https://robinhood.com/stocks/AMZN/)__'s $1.7B acquisition of Roomba-maker __[iRobot](https://robinhood.com/stocks/IRBT/)__ has [gathered](https://www.wsj.com/articles/amazons-roomba-deal-keeps-getting-messier-73f09651) dust since it was announced last summer. Amazon’s potential fourth-largest acquisition ever is facing an investigation by the Federal Trade Commission and, as of last week, also by the UK’s antitrust regulator. Amazon’s already so dominant that regulators may be concerned about it ruling the vacuum world, too. 

- __Small vac, big punch:__ In late 2021 iRobot held a whopping 62% of the robotic-vacuum market (excluding China) — a significantly larger market share than that held by previous Amazon buys like __MGM__ and One Medical.

- __Privacy please:__ Antitrust and data-privacy experts are concerned that the acquisition might give Amazon access to Roomba customer data (picture: cameras that map homes to avoid couch run-ins).

- __Sputtering:__ iRobot shares are down 32% from Amazon’s $61/share offering.

__Dusting off powers…__ The FTC, under chair Lina Khan, has grown much tougher on big tech in recent years. In December, the agency sued to block  __[Microsoft](https://robinhood.com/stocks/MSFT/)__'s $69B takeover of __[Activision Blizzard](https://robinhood.com/stocks/ATVI/)__, and earlier this month ordered biotech company __[Illumina](https://robinhood.com/stocks/ILMN/)__ to undo its $7B buyout of cancer-test developer __Grail__. The moves may be having an effect: last year, __[Nvidia](https://robinhood.com/stocks/NVDA/)__ ditched plans to buy chip maker __Arm__ in what would’ve been the biggest semiconductor deal ever. Looking ahead, the FTC last month vowed to protect competition in the AI industry.

Justin Sullivan/Getty Images

Stuck

__Antitrust is getting even anti-er…__ and that could be bad news for tech titans. In 2017, Amazon completed its $13.7B __Whole Foods__ buyout within three months — now, it’s eight months into trying to buy iRobot. US tech mergers and acquisitions were down last year as companies faced a tougher market and the risk of FTC lawsuits. Given the agency’s new groove, cost-cutting companies might think twice about snatching up startups.

Amazon’s Roomba-quisition is looking messy as the FTC continues its antitrust press

🤖 __Techy…__ __[Ethereum](https://robinhood.com/crypto/ETH/)__, the second largest crypto, successfully [completed](https://www.bloomberg.com/news/articles/2023-04-12/ethereum-s-eth-shanghai-shapella-upgrade-looks-stable-developer-beiko-says) a major update dubbed [Shanghai](https://snacks.robinhood.com/newsletters/7g8WyDpRHlBW4XKb0ArYq9/articles/3YIdBYT3OuwOf9IqZp0aMK/). Validators who locked up ether as collateral can finally begin to withdraw (and sell) their staked coins. About that… 

🪙 __Coins…__ As of yesterday, validators had [queued](https://www.theblock.co/post/226125/ether-pending-withdrawals-billion) up $1.7B+ worth of staked ether to withdraw. The Shanghai update limits the # of coins which can be pulled out at once, so those who want to withdraw staked ETH have to get in line. 

🌶️ __Spicy…__ Crypto has a reputation problem: a Pew survey [found](https://www.pewresearch.org/fact-tank/2023/04/10/majority-of-americans-arent-confident-in-the-safety-and-reliability-of-cryptocurrency/) that while nearly 90% of US adults have heard of cryptocurrency, two-thirds aren’t confident that current ways to trade the digital assets are safe.

STAKED

For the first time, some banks lost money for each mortgage they financed last year