__Build back greener…__ Last week President Biden [signed](https://www.washingtonpost.com/politics/2022/08/16/biden-inflation-reduction-act-signing/) a historic climate and social spending bill into law (confusingly dubbed: “the Inflation Reduction Act”). The $433B package is expected to help the US curb emissions by 40% by 2030, closer in line with the 50% goal Biden had set in the Paris Agreement.

- __Big deal:__ The landmark legislation [includes](https://www.wired.com/story/how-inflation-reduction-act-climate-bill-save-you-money/) nearly $400B in climate spending — less than Biden’s original agenda, but still the largest climate investment in US history. Included: $60B for clean sources and storage (think: wind turbines, EV factories) and tax credits to help consumers lower their emissions (think: home solar panels, used EVs).
- __Bigger problem:__ Despite the monumental law, scientists [warn](https://www.reuters.com/business/cop/world-scrambles-contain-damage-greenhouse-gas-emissions-hit-record-2021-10-25/) the world’s still "way off track" in capping rising temperatures, and the current energy crisis is making it harder for our gas-reliant globe to focus on green alternatives.

__From countries to companies…__ governments and corporations have made ambitious pledges to curb greenhouse-gas levels, which hit a [record](https://www.reuters.com/markets/commodities/eu-scientists-call-action-greenhouse-gas-levels-hit-high-2021-2022-01-10/) in 2021. G20 countries (notably the US, China, Germany, and India) account for more than 80% of the world's economic output *and* 80% of global emissions. Only 6% of the G20's $14T in postpandemic stimulus spending went toward projects to lower emissions. 

- __Companies aren’t doing so great either:__ [700+](https://hbr.org/2022/08/why-companies-arent-living-up-to-their-climate-pledges) of the largest 2K public companies have made net-zero commitments, and two-thirds of S&P 500 companies have set targets for emission reductions — but many are struggling to deliver.

A climate whirlwind (Andriy Onufriyenko/Getty Images)

Temp Check

__Climate problems are costly…__ hence: the Dems’ massive package. But the crisis might be even costlier to ignore. Climate-related adaptation and resettlement are expected to be multitrillion-dollar challenges: unchecked climate change could cost the global economy [$178T](https://www2.deloitte.com/global/en/pages/about-deloitte/press-releases/deloitte-research-reveals-inaction-on-climate-change-could-cost-the-world-economy-us-dollar-178-trillion-by-2070.html) over the next half century — not to mention the devastating human toll. Extreme weather has cost the US nearly [$2T](https://capitalmonitor.ai/institution/government/big-names-back-climate-disclosure-in-the-us/) since 1980, and nearly $100B last year alone.

The US is making its biggest climate investment ever, but the climate crisis could be much costlier

__Cloudy skies...__ literally. Cloud computing has enabled millions of Americans to work from home during the pandemic, but it’s come with a climate cost. There are nearly [3K](https://discover.cloudscene.com/market/data-centers-in-united-states/all) data centers in the US alone, which can each use enough energy to power 50K homes. As global temps rise, cloud companies are racing to keep servers cool while reducing emissions. The process could take a while: the cloud stores over 60% of all corporate data and has a bigger carbon footprint than the entire airline industry. 

__Crypto's climate conundrum...__ Many blockchains (think: __[bitcoin](https://robinhood.com/crypto/BTC/)__) use gobs [of energy](https://snacks.robinhood.com/newsletters/18QR0SyWNU2shCThYbl30f/articles/35CXk15pizW3Ju68UBK6WO/) to secure their networks. Bitcoin alone is estimated to guzzle more electricity than Argentina, and fossil fuels are key. A 2019 report said BTC mining emitted 23M metric tons of carbon dioxide a year (that # is likely greater now). But crypto's power situation is in flux. The planned September __[ethereum](https://robinhood.com/crypto/ETH/)__ merge ([PoW to PoS](https://mashable.com/article/ethereum-merge-explainer)) will make that chain a lot less energy-hungry. Meanwhile, US officials may put their fingers on the crypto-emission scales with industry reforms.

__Green investing…__ or green-washing? Investors hungry for climate-responsible capitalism are expected to park $50T in environmental, social, and governance (ESG) funds by 2025. Critics on the right say ESGs are too “woke” and critics on the left say ESGs are designed to prioritize profits over planet-saving progress. ESGs have [underperformed](https://www.reuters.com/business/sustainable-business/bear-market-puts-esg-investing-its-first-big-test-2022-07-13/) the market by nearly 2% during the first half of this year, thanks partly to slumping tech stocks. Now: new EU [regulations](https://www.bloomberg.com/news/articles/2022-08-02/esg-funds-face-new-rules-aimed-at-protecting-everyday-investors?utm_source=google&utm_medium=bd&cmpId=google) might tighten ESG marketing — or slow sustainable stocks.

__Carbon capture...__ is capturing corporate attention. The UN says limiting global warming will require taking tons of carbon out of the atmosphere (think: trees, carbon-sucking machines.) [In April](https://www.cnbc.com/2022/04/12/stripe-alphabet-meta-shopify-mckinsey-spur-carbon-capture-market.html), __Stripe__, __[Alphabet](https://robinhood.com/stocks/GOOGL/)__, __[Shopify](https://robinhood.com/stocks/SHOP/)__, __[Meta](https://robinhood.com/stocks/META/)__, __McKinsey__, and others created a $925M carbon-capture fund. __[Microsoft](https://robinhood.com/stocks/MSFT/)__ plans to spend $471M on the tech, and oil giants like __[Exxon](https://www.npr.org/2021/06/08/1002448099/big-oils-transition-3-takeaways-on-how-the-industry-is-and-isnt-going-green)__ say they’re investing billions in taking their emissions out of the air. But skeptics say it’s safer, cheaper, and more efficient to reduce carbon emissions now rather than try to clean them up later.

Zoom Out

Stories we’re watching...

- __[Spark](https://snacks.robinhood.com/newsletters/29d17uJyHleH663tK5KuJ1/articles/5gnyDPfIyTl29DPyVD3NrR/):__ E-truck maker __[Nikola](https://robinhood.com/stocks/NKLA/)__ agreed to buy battery biz __[Romeo Power](https://robinhood.com/stocks/RMO/)__. EV batteries are the new oil — both expensive and scarce. That’s why EV suppliers have invested $30B in the battery biz over the past two years.
- __[Vroom](https://snacks.robinhood.com/newsletters/2zh9ZuNrQGjZdXgKAstRqM/articles/1clzXSu7L3YCvgXXkv57b1/):__ Dodge is retiring its gas-guzzling Challenger and Charger cars, and launching a new electric car (dubbed: Hornet). Dodge is leaning on brand fans to help it transition into a more EV-forward biz. 
- __[Boom](https://snacks.robinhood.com/newsletters/5OQRdDSON3q7HH9Mc9MUP1/articles/uWHUubxsK4Wgwez1MUerB/):__ __[American Airlines](https://robinhood.com/stocks/AAL/)__ agreed to buy 20 ultrafast jets that fly at twice the speed of commercial flights. New supersonics are *super* expensive, but their planned use of sustainable fuel could help demand take off.


ICYMI

Recent highlights… 

The US is making a huge climate investment, but the climate crisis could be much costlier

Dow Jones

S&P 500

Nasdaq

Bitcoin

Natural disasters are occurring 3X as often as they were a half century ago

🌎 Climate money

__Middle-earth…__ has a new lord of the rings. Yesterday, Swedish gaming company __Embracer__ announced a deal to buy IP rights for "Lord of the Rings" and "The Hobbit." FYI: Embracer is one of the largest game publishers with 120 in-house studios, 230 games in development, and 850 IPs. Under the deal, Embracer can create and sell LOTR-based films, games, merch, theme parks, and stage productions. 

- __Gi-Ent sized:__ The deal was part of six acquisitions that Embracer made, totaling nearly $573M. Presale estimates had put LOTR’s value at about $2B. 
- __Return of the ring:__ __[Amazon](https://robinhood.com/stocks/AMZN/)__ spent $250M on LOTR rights for its new "Ring of Power" TV series, which debuts next month. __[Warner Bros.](https://robinhood.com/stocks/WBD/)__ plans to release an anime LOTR film in 2024, and __[EA](https://robinhood.com/stocks/EA/)__ is working on a middle-earth mobile game.

__One IP to rule ’em all…__ Embracer’s been on an M&A spree over the past decade, scooping up smaller developers and the rights to classic franchises (like: “Tomb Raider,” “Hellboy”) to build its gaming archive. Rivals including __[Microsoft](https://robinhood.com/stocks/MSFT/)__ and __[Nintendo](https://robinhood.com/stocks/NTDOY/)__ are also droppin' big bucks to bolster their roster of classic franchises, even with gaming sales forecast to [shrink](https://snacks.robinhood.com/newsletters/7lRM3c04eGZ4ddiogzx4gE/articles/3rMD1M3DR0NWavorSAxY9m/) 9% this year. So far, stocking up is paying off: Embracer’s sales [jumped](https://www.gamesindustry.biz/embracer-net-sales-up-107-for-q1) 107% in Q1 of this year.

Grabbin' Gandalf (New Line/WireImage via Getty Images)

LOTR

__Super-sticky franchises can pay off big $$…__ just ask __[Disney](https://robinhood.com/stocks/DIS/)__. The Mouse House has made nearly $5B from "Star Wars" box-office sales alone after buying Lucasfilms for $4B in 2012. By grabbing super-sticky franchises, companies like Embracer can expand beyond gaming with name-brand fan faves, and diversify revenue through new channels (think: hobbit-inspired homeware or a Gandalf spin-off series).

Swedish gaming giant buys "Lord of the Rings" as big media stocks up on super-sticky franchises

Swedish gaming giant buys “Lord of the Rings" as big media snags super-sticky franchises

90% of US retailers now accept Apple Pay — but when it launched only 3% used contactless payment

🧙‍♂ Middle-earth's new kingdom

__Hitting the gas on electrics…__ Dodge says it's retiring both the Challenger and the Charger — two iconic muscle cars born in the ’60s — in the coming year. The fresh hotness: Dodge's first electrified vehicle, the Hornet R/T. The plug-in hybrid crossover should hit the streets in the spring, and the dual announcements — out with the gas-guzzling old, in with the EV new — show just how much Dodge is counting on EVs to carry its brand as it looks to leave purely gas-powered cars in the dust:

- __Rearview mirror:__ Dodge sold 54K Challengers in the US last year, making it the country’s best-selling muscle car.
- __Road ahead:__ The Hornet starts at $40K and can travel up to 30 miles per charge before a gas engine kicks in.

__The EV race…__ is fully underway. 10 automakers have already pledged to go EV-only, and Dodge's parent company, __[Stellantis](https://robinhood.com/stocks/STLA/)__, says it’ll spend $35B+ on electrification by 2026. It's not alone: experts predict 54M global EV sales in 2040 — from 7M last year. Auto giants like Stellantis are moving, but they'll need to step on it if they're going to catch up: 70% of all EVs registered in the US last year were __[Teslas](https://robinhood.com/stocks/TSLA/)__.

Dodge plugs in (Brooks Kraft LLC/Corbis via Getty Images)

__If you're slow off the blocks…__ brand loyalty can give you a boost. Dodge is trailing rivals in its shift to electric — __[Ford](https://robinhood.com/stocks/F/)__ sold 27K+ Mustang Mach-Es last year alone — but it’s counting on brand fans to help it succeed over the long haul. One possibility: a future Challenger EV. Plus, Dodge says it has something extra under the hood: the youngest fan-base in the biz. It’ll need all those components if it's going to shift its muscle-car-loving customers to EVs.

Dodge ditches 2 gas-powered muscle cars as it races to catch up with EV competition

Dodge ditches gas-powered muscle cars as it races to catch up with EV competition

175M+ Americans have at least one credit card, and about half of active accounts carry a balance

⚡ Dodge's electrified dreams

__Cruisin’ at 60,000…__ faster than the speed of sound. __[American Airlines](https://robinhood.com/stocks/AAL/)__ dropped a [nonrefundable deposit](https://www.wsj.com/articles/american-airlines-agrees-to-buy-20-boom-supersonic-jets-11660660760) to buy 20 superfast jets from __Boom Supersonic__. The deal makes American Boom’s biggest customer. But not so fast: while the __Colorado plane co__ is accepting orders for its speedy aircraft — dubbed: Overture — the reportedly $200M plane is still being developed. The goal:

- __Seat:__ Boom says its jet will seat up to 80 passengers.
- __Speed:__ Overture should fly 2x as fast as commercial planes (think: Miami to London in five hours, LA to Honolulu in three).
- __Smoke:__ Boom says Overture will be carbon-neutral and run on sustainable fuel.

__Tray tables and orders…__ are up. So far Boom's received 35 total Overture orders — plus 130 preorders and options — from some of the largest airlines. __[Virgin](https://robinhood.com/stocks/SPCE/)__ optioned 10 jets for $2B in 2016, __Japan Airlines__ invested $10M and preordered 20 jets in 2017, and __[United](https://robinhood.com/stocks/UAL/)__ committed to 15 in 2021. And though not supersonic, Boom *is* moving: test flights are planned for 2026, with passenger flights by 2029.

Boomin' business (Justin Tallis/AFP via Getty Images)

Super

__Supersonics aren't ready for takeoff yet…__ but they're no pipe dream. While experts say Overture’s engine still needs work before it can break the sound barrier, the airline industry's offered supersonic flights before. The British and French developed Concorde — the first supersonic passenger-carrying commercial plane — which flew for decades. The prob? It burned fuel so quickly that round-trip tickets cost $12,000 (talk about a niche customer base). Now Boom hopes modern materials and sustainability will finally make supersonic flights blast off.

American Airlines agreed to buy 20 ultrafast jets from Boom Supersonic, but the supersonic industry's still up in the air

American Airlines agreed to buy 20 ultrafast jets from Boom Supersonic

Drake earned his 30th Billboard top-five hit — passing the Beatles for the most of all time

✈️ Supersonic business boom

__Burrito bowls and a bedside table…__ ETA: 45 minutes. __[DoorDash](https://robinhood.com/stocks/DASH/)__ (aka America’s biggest food-delivery biz) is adding secondhand goods to its couriers’ loads, thanks to a new partnership with Facebook Marketplace. Refresher: __[Meta's](https://robinhood.com/stocks/META/)__ marketplace has 250M+ monthly users who sell new and used goods through digi-storefronts. Now:

- __The deal:__ DoorDash drivers will deliver Marketplace orders up to 15 miles away within 48 hours. But the items have to fit in drivers’ trunks (RIP, daybed-delivery dreams).
- __The route:__ The deal’s been in talks since last year, with delivery already tested in several US cities. A full rollout date is still TBD.

__Doorstep delivery...__ Facebook's struggled to attract new millennial and Gen Z users as its swipey rival __TikTok__ becomes the social network of choice. Marketplace is one of the few Meta features that pull younger users (and grows revenue) as its ad-sale profit puppy struggles. Meanwhile, DoorDash gets to expand its delivery biz beyond perishables into personals (think: new makeup haul, vintage looks) to drive growth. The strategy’s already working:

- __Last quarter:__ DoorDash delivered a record 426M orders and 30% growth in revenue.
- __Last year:__ Rival __[Uber's](https://robinhood.com/stocks/UBER/)__ same-day package-delivery service (dubbed: Uber Connect), saw a 200% delivery jump from 2021.

DoorDash’s latest delivery (Alexi Rosenfeld/Getty Images)

Trunk

__If you can’t get new users online, find ’em IRL…__ The pandemic changed the delivery landscape with people relying on front-door drop-offs for everything from paper towels to pet transport. With its new partnership, DoorDash secures more non-food-related orders for its drivers, and Meta reaches fresh customers — and gets a slice of the delivery market. The cherry on top: more Marketplace users = more opportunities for Meta to regain some of its lost ad revenue.

DoorDash signs a delivery deal with Facebook Marketplace, as big techies go offline to lure younger customers

DoorDash signs a deal with Facebook Marketplace, as big techies go offline to lure customers

Physicists say there are about three hundred thousand billion billion jiffies in a second

📦 DoorDash deliveries go Meta

__Earnings in Aisle 5...__ America's favorite retailers are expected to report this week, and it’s looking like a rough quarter for __[Walmart](https://robinhood.com/stocks/WMT/)__ and __[Target](https://robinhood.com/stocks/TGT/)__. High food and gas prices are causing Americans to cut back on discretionary splurges (think: TVs, bikes, air fryers). Now retailers have billions’ worth of unsold inventory (picture: a mountain of hoodies).

- __Walmart cut its annual profit__ forecast in July and [laid off](https://www.wsj.com/articles/walmart-lays-off-hundreds-of-corporate-workers-11659558590) hundreds of corporate workers this month. America's largest retailer missed profit expectations in Q1 as inventory surged 33% from last year. This latest quarter could be worse.
- __Target issued a profit warning__ in June, saying earnings would take a short-term hit as it cancels orders and slashes prices to get rid of inventory. In Q1, Target shocked investors with a big profit miss as consumers scaled back on pricier items.

__Ignoring the decorative pillows...__ and turning your back on the pajama rack. Like Target, Walmart’s been on a discounting binge to unload stuff like sweatsuits, patio furniture, and blenders. Those were hot commodities mid-pandemic, but consumers are shunning them now:

- __Clothes down, food up:__ The pace of inflation slowed last month, but grocery prices continued rising from June, and consumer confidence hit another low in July.
- __*Not* saved by the bell pepper:__ Groceries account for over half of Walmart’s sales (and a good chunk of Target’s) but they’re less profitable than apparel and electronics.

How low can they go? (Bob Riha Jr./Getty Images)

Piles

__Being behind the curve is costly…__ It’s not just inflation hitting earnings: retailers have too much of the wrong stuff and not enough of the *right* stuff. __[Gap](https://robinhood.com/stocks/GPS/)__ has piles of unsold hoodies and leggings, while customers want cocktail dresses and office blazers. By acting fast to shed undesirables, retailers can make room for products customers actually want (like: groceries, school supplies). But being “guest-relevant” (as Target’s CEO put it) could take a few quarters — and that’s hurting profits now.

Walmart and Target could take a big profit hit as they aggressively discount to become “guest-relevant”

__Dark clouds…__ US trade officials have [halted](https://www.wsj.com/articles/u-s-solar-shipments-are-hit-by-import-ban-on-chinas-xinjiang-region-11660037401) imports from the Xinjiang province as part of a crackdown on China’s human-rights abuses of Uyghur Muslims and other ethnic minorities. Xinjiang produces over 40% of the world’s polysilicon, a key component of solar panels. Now panels from companies like __[Jinko Solar](https://robinhood.com/stocks/JKS/)__ and __Trina Solar__ can’t enter the US, and delays are expected to last at least six months. Trade troubles might spread beyond solar, since a quarter of the world’s tomato paste and 13% of its wind turbines also come from Xinjiang.

__A-list after-party…__ in the *metaverse*. Crypto winter hasn’t stopped celebs from bringing the virtual heat. Last week, mega-fluencer and entrepreneur Paris Hilton [debuted](https://snacks.robinhood.com/newsletters/3qF3Shfyn2JxNdyUWAF3Uo/articles/4b4mPHyiIFQEezvvxZDsxf/) her virtual Malibu mansion on meta-gaming site __Sandbox__ (think: digi-martinis by the meta-pool). The Sandbox has 2M users and 300 partnerships with big names like Snoop Dogg, Tony Hawk, Gucci, and __[Adidas](https://robinhood.com/stocks/ADDYY/)__. These “phygital” deals could help celebs and brands profit from fresh forms of entertainment (picture: a Snoop meta-concert). Still, this year virtual-land prices are down 85%.

__Weekend treasure hunt…__ down the $7 jeans aisle. As inflation squeezes wallets, bargain-seekers are boosting sales at discount legends __[Ross](https://robinhood.com/stocks/ROST/)__ and __[TJX](https://robinhood.com/stocks/TJX/)__ (which owns TJ Maxx and Marshalls). Last quarter treasure-hunters helped fuel TJX's 13% sales growth. Off-price chains have also [benefited](https://www.wsj.com/articles/glut-of-goods-at-target-walmart-is-a-boon-for-liquidators-11656927184) by selling backlogged merch from larger, oversupplied retailers. Still, apparel prices are up 5% from last year and consumer spending is slowing. We’ll see whether the bargain boost is intact when Ross and TJX report this week. 

__Mixed signals…__ Economists expected unemployment to jump as interest rates rose, but the US economy added *twice* as many jobs as expected last month, finally recovering all jobs lost in the pandemic. But jobless claims also rose to their highest level since November last week, and mass layoffs are getting more common — a sign job growth may wane. The Fed wants the labor market to cool to curb #flation (just not too much). Economists are anxiously waiting to see if Thursday’s jobless claims rise again.

Events

Coming up this week...

- __[WeCrash](https://snacks.robinhood.com/newsletters/JCFHKjEAYPfwYYjKzoi0t/articles/DgOZJmncilojeNgA5W7Le/):__ Investment giant __[SoftBank](https://robinhood.com/stocks/SFTBY/)__ lost a record $23B last quarter as its tech investments — from __[Uber](https://robinhood.com/stocks/UBER/)__ to __[WeWork](https://robinhood.com/stocks/WE/)__ to __Didi__ — plunged. Now it’s selling big tech stakes to curb losses. 
- __[#Ad](https://snacks.robinhood.com/newsletters/JCFHKjEAYPfwYYjKzoi0t/articles/4to0gNRSJSd0mBaH2DRfvD/):__ __[Lyft](https://robinhood.com/stocks/LYFT/)__ is launching an ad biz (feat. in-car tablets and in-app Oscar Mayer Wienermobiles) to monetize users’ eyeballs as ride-hailing rebounds. Ads could help it gain an edge on larger rival Uber.
- __[Streamy](https://snacks.robinhood.com/newsletters/3qF3Shfyn2JxNdyUWAF3Uo/articles/7K0IcNGbKsOqy5uKEYtCPG/):__ __[Disney+](https://robinhood.com/stocks/DIS/)__ added an expectation-crushing 14.4M subs last quarter, while Mickey’s parks and resorts posted record profits. But Disney’s streamers (Disney+, Hulu, ESPN+) are still losing billions.

Last week's highlights...

Walmart and Target could take a big profit hit as they price-slash to become "guest-relevant"

Over a third of US teens say they’re on social media “almost constantly,” with YouTube being the leading destination

🛍️ Walmart and Target’s pile problem

__Back down to Earth...__ Regulators are pulling the plug on an $886M [subsidy](https://www.wsj.com/articles/elon-musks-spacex-denied-bid-for-starlink-rural-broadband-subsidies-11660162973) for __SpaceX's__ Starlink after the satellite-internet biz failed to reach America’s most isolated areas. ICYMI: the FCC dished out over $9B worth of subsidies to broadband providers in 2020 to help connect millions of remote households and small businesses (see: [Rural Digital Opportunity Fund](https://www.fcc.gov/auction/904)). Now:

- __The deal:__ Starlink was originally awarded $886M over 10 years (one of the largest FCC grants) in hopes of [becoming](https://www.cnn.com/2022/08/10/tech/spacex-starlink-fcc-subsidies-denied-scn/index.html) a one-stop internet shop for rural areas. But its high-speed service has slowed from Q4 of last year to now.
- __The fallout:__ Regulators nixed the award Wednesday, blaming Starlink's “still developing” tech and pricey subscription for the reversal. 
- __The status:__ Starlink has nearly 2K low-Earth-orbiting satellites providing internet to 400K+ people worldwide. The basic service costs $110/month, plus a one-time $600 satellite fee.

__America’s digital divide…__ is growing wider. About 21M Americans — or 1 in 15 people — still don’t have access to high-speed internet. It’s worse in rural areas (think: small towns, farmlands) where more than half of residents have bad service. Some families have had to sit in parking lots to do remote work, job search, and attend online classes. The FCC’s subsidies could help with that:

- OG internet provider __[Charter](https://robinhood.com/stocks/CHTR/)__ received $1.2B in government subsidies and is investing an additional $3.8B of its own money to expand its broadband network in 23 states.

A satellite snafu (Joan Cros/NurPhoto via Getty Images)

Bars

__A public-sector failure could affect private funding...__ SpaceX has raised more than $2B this year, but funds are shared with its pricey next-gen rocket projects. Musk has already delayed Starlink’s IPO twice. And if it can’t meet the government’s expectations, private investors might lose confidence too.

Space's Starlink loses $886M in government funding because even satellite internet can’t fix America’s WiFi problem

__This year’s been a roller coaster…__ and __[Six Flags](https://robinhood.com/stocks/SIX/)__ is starting to feel queasy. Yesterday, shares of the theme-park giant plunged 18% after the biz [reported](https://www.wsj.com/articles/six-flags-revenue-falls-dragged-by-low-attendance-11660226069?mod=pls_whats_news_us_business_f) a 22% drop in attendance last quarter compared to last year. While Six Flags’ attendance is 35% below prepandemic levels, __[Disney’s](https://robinhood.com/stocks/DIS/)__ US theme-park visitors have rebounded. 

- __Off theme:__ Unlike Six Flags, Disney, __[SeaWorld](https://robinhood.com/stocks/SEAS/)__, and __[Cedar Fair](https://robinhood.com/stocks/FUN/)__ all posted record theme-park sales last quarter, thanks to rising prices and eagerly returning visitors.
- __A big drop:__ Six Flags’ quarterly sales fell 5% from last year, though spending per visitor jumped. Meanwhile, Disney’s parks reported a whopping 72% *increase*. 

__More like Five Flags…__ Actually, Six Flags got what it wanted: fewer visitors. It had recently hiked prices to reduce the number of people in its parks and improve the “guest experience.” Read: fewer visitors, *but ones who spend more*. The strategy seems to have worked too well:

- __Higher rollers:__ Six Flags wants to boost sales while limiting visitors. Fewer people = happier visitors + lower costs.
- __They wanted a drop…__ but not *that* big a drop. The Flags’ CEO said attendance numbers were 10%+ lower than targeted. 
- __The ride’s not over:__ Six Flags visitor spending jumped 23% last quarter, and it's up 50% from prepandemic levels (think: pricier tix + more merch and food sales).

Plunge

__You can’t crank the dial too fast…__ Six Flags may have “premium-ized” too aggressively during a tough economic time. It successfully pushed customers to spend more at its parks. But it hiked prices so fast that it caused its attendance levels to nosedive faster than a roller coaster. Still, the CEO says he’s confident the company will see a “long-term benefit” from its premium-ization strategy.

Six Flags shares plunge as attendance falls, but its premium-ization strategy is (kind of) working

SpaceX’s Starlink lost an $886M government subsidy because its service wasn't good enough

Last month the average rent for a Manhattan apartment hit a record $5.1K

📡 Starlink’s subsidy snafu

__It’s the Mickey Mouse Clubhouse…__ but the celebration’s happening in Mickey’s *boardroom*. __[Disney](https://robinhood.com/stocks/DIS/)__ shares popped 7% after it [reported](https://www.cnbc.com/2022/08/10/disney-dis-fiscal-q3-2022-earnings.html) expectation-beating sales and profit. Quarterly revenue at the House of Mouse surged 26%, fueled by theme parks and surprisingly strong streaming growth.

- __Parks and experiences revenue surged__ 70% from last year, hitting a record $7.4B. Profit 6X’d as consumers flocked back to Disney parks, cruises, and resorts (#BrunchWithBelle). 
- __Streaming crushed:__ Disney+ added 14.4M subscribers (beating expectations of 10M), for a total of 152M. Most new subs came from outside North America.
- __The streaming #s__ are a validating sign for CEO Bob Chapek’s goal of hitting between 230M and 260M Disney+ subscribers and achieving streaming profitability by September 2024. 

__All eyes on streaming…__ Investors were eagerly awaiting Disney+ subscriber numbers for indicators on the streaming industry’s growth prospects. Mid-pandemic, streaming’s future looked brighter than Tinker Bell’s wings. Now it’s iffy: 

- __The downside:__ __[Netflix](https://robinhood.com/stocks/NFLX/)__ lost 1M subs last quarter and expects to add just 1M this quarter — a major slowdown and a foreboding sign for streamers. 
- __The meh side:__ __[Comcast](https://robinhood.com/stocks/CMCSA/)__ had *no* subscriber gains for Peacock last quarter, and __[Warner Bros.’](https://robinhood.com/stocks/WBD/)__ HBO Max and Discovery+ gained just 1.7M subs combined. 
- __The upside:__ Disney’s big gains. Also: __[Paramount+](https://robinhood.com/stocks/PARA/)__ added a relatively strong 3.7M subs.

Sweet streams (Rafael Henrique/SOPA Images/LightRocket via Getty Images)

Streamy

__Netflix is no longer the benchmark…__ for the entire streaming industry. Disney’s #s showed this was a mixed quarter for streamers — read: it’s not all gloom and doom in the streamer-verse. Less than three years after launching, Disney+ is just 70M subs away from catching up to Netflix. But Disney’s streamers (Disney+, Hulu, ESPN+) are still losing billions as it splurges on original content, and now it’s [raising prices](https://www.cnbc.com/2022/08/10/disney-raises-price-on-ad-free-disney-38percent-as-part-of-new-pricing-structure.html) to curb losses. TBD if that’ll hurt its ambitious goals.

Disney+ crushes subscriber-growth expectations, suggesting that not all streamers are created equal

__Virtual margs on the meta-roof…__ that’s hot. Mega-influencer and entrepreneur Paris Hilton has teamed up her media company with metaverse gaming site __Sandbox__ to open a virtual Malibu mansion (trailer [here](https://www.youtube.com/watch?v=x2490ly6KY8&t=26s)). The [Sandbox](https://www.cnbc.com/2022/08/10/paris-hilton-will-sell-nfts-and-hold-virtual-parties-in-the-sandbox.html) is a “decentralized virtual world” where users can buy land, browse shops, and attend concerts — all virtually. With 40M+ global downloads, The Sandbox has become a hot spot for celebs to interact with fans:

- __Meta-palace:__ As part of the launch, fans can buy Paris-inspired NFTs and avatars, and attend virtual rooftop parties with the “OG crypto queen.” Paris’ company says she’s earned $3.5M from NFTs this year.
- __The guest list:__ Sandbox has 300+ partnerships with big names like Snoop Dogg, DJ Steve Aoki, and mega retailers __[Gucci](https://www.highsnobiety.com/p/gucci-vault-the-sandbox-metaverse/)__ and __[Adidas](https://robinhood.com/stocks/ADDYY/)__. 
- __FYI:__ Paris first got into meta-events in December with an interactive "Paris World" on __[Roblox](https://robinhood.com/stocks/RBLX/)__, which attracted 544K fans.

__Digital “For Sale” sign...__ Metaverse real estate has crumbled during crypto winter, with virtual land prices down 80% in the past six months. Last quarter, The Sandbox’s virtual-land sales hit their lowest level in over a year as IRL inflation tamps digi-splurging. But that hasn’t stopped meta-platforms from sealing deals with brands and celebs.

- __A-listers__ help The Sandbox engage with its 350K+ monthly users and boost (virtual) property values. ICYMI: someone [paid](https://fortune.com/2022/02/02/how-to-buy-metaverse-real-estate-snoop-dogg-celebrity-neighbor/) $450K to be Snoop’s meta-neighbor last year.

Phygital

__Celebs are bridging the “phygital” gap…__ by bringing their real world into the virtual world. These physical-digital partnerships can help celebs and brands earn fresh $$ from new forms of virtual entertainment. Imagine: hitting up Paris’ virtual rooftop DJ set before heading to Snoop’s meta-mansion for the after-party.

Paris Hilton launches a virtual Malibu mansion on metagaming site Sandbox as celebs promote digital real estate

Disney+ crushes subscriber expectations, suggesting not all streamers are created equal

The price of eggs is up 38% from last year

🏰 Disney’s streaming surprise

__Fish and chips...__ More like fishing for chips. Yesterday, President Biden [signed](https://www.theverge.com/2022/8/9/23298147/biden-chips-act-semiconductors-subsidies-ohio-arizona-plant-china) the "CHIPS and Science Act" into law. The bipartisan win comes after nearly two years of negotiations. The $280B package features $52B for boosting US chip manufacturing. Picture: funding for American chip titans like __[Intel](https://robinhood.com/stocks/INTC/)__, __[AMD](https://robinhood.com/stocks/AMD/)__, and __[Micron](https://robinhood.com/stocks/MU/)__. And chipmakers are already making moves spurred by CHIPS:

- __[Micron](https://robinhood.com/stocks/MU/)__ [announced](https://www.cnbc.com/2022/08/09/micron-to-invest-40-billion-in-us-chip-manufacturing.html) yesterday that it would invest $40B in US chip manufacturing through 2030 with the help of $$ from CHIPS. It also said that its investment would create up to 40K US jobs and that it expects to begin US production in the second half of the decade.
- __[Qualcomm](https://robinhood.com/stocks/QCOM/)__ committed to spending an extra $4.2B on chips from __[GlobalFoundries](https://robinhood.com/stocks/GFS/)’__ NY plant — and to boosting its US semiconductor manufacturing by 50% over the next five years.

__Chips in the fridge…__ semiconductor chips, that is. Chips are critical to everything from smartphones and cars to military systems and medical equipment. But the US produces only one-tenth of the world’s chips and is heavily reliant on East Asia, which accounts for three-fourths of global chip production. Taiwan’s __[TSMC](https://robinhood.com/stocks/TSMC/)__ alone churns out 90% of the world’s advanced chips, and China’s only growing more dominant in its chip game.

Small but mighty (Saul Loeb/AFP via Getty Images)

Chipper

__Sometimes you need to dangle the carrot…__ to incentivize change. US chip manufacturers have been offshoring new foundries to Asia for years in exchange for cheaper labor and production. Now this $52B package gives American manufacturers a financial incentive to build at home. Micron said its $40B investment would boost America's global memory-chip market share to 10% from 2%.

After Biden signed the CHIPS Act, US chip makers are already committing billions to domestic manufacturing

__Shine bright like a (lab) diamond…__ Jewelry legend __[Signet](https://robinhood.com/stocks/SIG/)__ is shelling out $360M in an all-cash [deal](https://www.cnbc.com/2022/08/09/zales-owner-signet-buys-online-jewelry-brand-blue-nile.html) to buy direct-to-consumer jewelry brand __Blue Nile__. Signet is the world’s largest diamond retailer whose portfolio includes Kay Jewelers, Jared, and Zales (you know the jingles). Blue Nile’s modern designs and lower prices have made it one of the largest online diamond retailers and a zillennial go-to. The specs:

- __Digital carat:__ Blue Nile started as an online-only jewelry brand in 1999 and now has nearly 3M customers and 18 showrooms in hubs like Atlanta and LA.
- __Clear cut:__ Blue Nile makes most of its $$ from engagement rings, and gained even more popularity after teaming up with lab-grown diamond brand __Lightbox__ in 2020.

__Every kiss begins with Kay...__ but it can only be Jared? US jewelry sales have more than doubled from prepandemic levels as consumers splurged on gold hoops and icy watches. But yesterday Signet [cut](https://www.forbes.com/sites/pamdanziger/2022/08/09/signet-jewelers-scores-a-major-win-in-the-strategic-acquisition-of-blue-nile/?sh=34cbb6d363e1) its sales outlook for next year (and the stock plunged 12%) as econ worries threaten bling spend. Blue Nile’s digital dominance could help keep sales afloat, since more than half of Signet customers start shopping online.

__Multichannel fits all…__ Signet is trying to expand its "connected commerce” strategy — a frictionless shopping experience across sales channels (think: browsing in a showroom, then buying online). Since nearly all of Signet’s high-spending customers shop across channels, Blue Nile’s digital prowess could put it closer to its $9B annual sales goal. But the deal isn’t expected to close until next year.

Kay Jewelers parent Signet scoops up zillennial fave Blue Nile as retailers look to multichannel growth

The CHIPS Act is a go, and chip makers are already committing billions to US manufacturing

Serena Williams, who just announced she’s going to retire from tennis, has 23 Grand Slam singles titles and $94M in career winnings

🍟 USA chips

__Never disappoints on the quirky decks...__ Japanese investment giant __[Softbank](https://robinhood.com/stocks/SFTBY/)__ is famous for its simple but poetic earnings decks, which include pictures of unicorns falling into the "Valley of Coronavirus" ([slide 50](https://group.softbank/system/files/pdf/ir/presentations/2019/earnings-presentation_q4fy2019_01_en.pdf)) and a powerful slide that just says "Many Regrets" (11). To understand the mood of Softbank's latest earnings, check out this frown on [slide 4](https://group.softbank/system/files/pdf/ir/presentations/2022/earnings-presentation_q1fy2022_01_en.pdf).

- __Softbank reported its largest quarterly loss ever.__ The mind-numbing figure: $23.4B. Softbank's tech-centric Vision Fund alone [lost](https://www.cnbc.com/2022/08/08/softbank-vision-fund-posts-a-21point6-billion-quarterly-loss-.html) nearly $22B.
- __Blame plunging tech stocks —__ from __[DoorDash](https://robinhood.com/stocks/DASH/)__ to __[WeWork](https://robinhood.com/stocks/WE/)__ to __[Uber](https://robinhood.com/stocks/UBER/)__ — which Softbank was heavily invested in. The Vision Fund has lost [$50B](https://www.wsj.com/articles/softbank-reports-23-billion-quarterly-loss-as-tech-downturn-hits-11659940047) in gains from its peak (#WeCrashed).
- __Losses were spread__ across Softbank’s portfolio of 300+ companies, including __Klarna__, __[DiDi](https://robinhood.com/stocks/DIDIY/)__ (the Uber of China), and Singapore’s [superapp](https://snacks.robinhood.com/newsletters/73PYCZgEW1bG9MUNOaqJQc/articles/3mJwpmK77yoS0MetcedE4n/), __[Grab](https://robinhood.com/stocks/GRAB/)__.

__The decks are still iconic...__ but Softbank’s investments have soured. Rising interest rates have crushed high-flying valuations, while China’s regulatory crackdown on tech pummeled Softbank’s investments in Asia. Now Softbank is selling to raise cash and soothe losses:

- __Softbank has sold its entire stake in__ Uber, __[Slack](https://robinhood.com/stocks/WORK/)__, __[Opendoor](https://robinhood.com/stocks/OPEN/)__, Nvidia, and others. It says it made a $1.5B profit by selling its long-held Uber stake. 
- __Cutting back:__ The Vision Fund approved just $600M in investments from April to June, down from a record $20.6B a year earlier, and job cuts could be coming.

A frown quarter (STR/JIJI PRESS/AFP via Getty Images)

Frown

__It can be hard to see the downside…__ when the upside is so in your face. Softbank was riding high when tech was booming. For 2020, it [posted](https://snacks.robinhood.com/newsletters/2rQFq8IqPXoQvwG9uxlD8l/articles/7qLRWjMIgX25AvlI8nuSLv/) a record *$46B* profit — the highest for a Japanese company, and $5B more than __[Google](https://robinhood.com/stocks/GOOGL/)__ earned that year. CEO Masayoshi Son [said](https://www.wsj.com/articles/softbank-reports-23-billion-quarterly-loss-as-tech-downturn-hits-11659940047) he’d become "somewhat delirious" when prices soared, and regrets all the $$ he funneled into startups. Now Softbank is imposing discipline to weather the markets’ ups and downs.

Softbank lost a record $23B last quarter as its formerly booming tech investments turned sour

__Forget the aux cord…__ Soon you’ll be able to control music in __[Lyft](https://robinhood.com/stocks/LYFT/)__ rides without nervously asking your driver — but you’ll have to watch ads. Yesterday, Lyft [announced](https://www.wsj.com/articles/lyft-creates-media-division-to-expand-its-advertising-services-11659956407?mod=business_featst_pos3) Lyft Media, a new unit focused on advertising. Ride-hailing demand has roared back to life, and Lyft wants to monetize users’ eyeballs: 

- __Brands riding shotgun:__ Lyft is adding tablets to its drivers’ cars so that brands can serve ads on the go. Think: a __[Vita Coco](https://robinhood.com/stocks/COCO/)__ ad in the app when you book, and another in the car to the supermarket. 
- __New features:__ Riders will be able to choose music and tip drivers through the tablets. Lyft said drivers will make extra $$ from in-car ads.

__Wienermobile ETA…__ Two years ago, Lyft bought Halo Cars, a startup that makes car-top screens. Since then, Lyft has grown its marketing biz by putting ads on car roofs, bike-sharing docks, and in its app. Think: Oscar Mayer Wienermobiles moving on the Lyft map instead of a car. It’s good timing to appeal to advertisers:

- __More rides = more eyes:__ Lyft’s stock [soared](https://www.cnbc.com/2022/08/05/uber-and-lyft-stocks-had-their-best-week-ever.html) 46% last week after it reported its biggest bump in active riders since the pandemic began. But the stock’s still down 55% this year.

#ads

__The route less traveled by may make the difference…__ While Lyft has stayed narrowly focused on rides, Uber has grown its Eats biz into one of the largest food deliverers (and has expanded to everything-delivery). But now Lyft could capitalize on its strength: riders’ eyeballs. While Uber also sells ads, it hasn’t built an ecosystem like Lyft’s. But this month Uber said it planned to expand its ad biz — and that it could hit $1B in revenue by 2024.

As ride-hailing rebounds, Lyft’s launching an ad biz (feat. in-car tablets) to gain an edge over Uber

Softbank lost a record $23B last quarter as its tech investments soured

Consumer confidence in the housing market has hit its lowest level since 2011