__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

Dow Jones

S&P 500

Nasdaq

Bitcoin

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%.

Zoom Out

Stories we’re watching...

__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.

ICYMI

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

🦄 Softbank’s frowning unicorns

__Swipe left…__ Your local grocery and __[Disney](https://robinhood.com/stocks/DIS/)__ have a common enemy: card fees. This spring, __[Visa](https://robinhood.com/stocks/V/)__ and __[Mastercard](https://robinhood.com/stocks/MA/)__ [hiked](https://www.cnn.com/2022/05/18/economy/credit-card-swipe-fees-inflation/index.html) the “swipe fees” they charge merchants for card purchases. FYI: merchants can pass swipe costs on to shoppers. Visa and Mastercard process 83% of US credit cards and earned $55B+ from swipe fees last year. But the duopoly is under scrutiny:

- __New rules:__ The Senate’s [finalizing](https://www.bloomberg.com/opinion/articles/2022-08-03/credit-card-rewards-aren-t-free-shoppers-don-t-care) a bill that would boost payment competition by forcing banks to use several partners, versus exclusively using Visa or Mastercard. More competition’s expected to reduce fees by $11B+ annually.
- __New suits:__ This month Disney [sued](https://www.nytimes.com/2022/08/01/business/dealbook/pornhub-visa-mastercard-disney.html) Visa and Mastercard, alleging they were essentially fixing fees — they settled privately. __[Walmart](https://robinhood.com/stocks/WMT/)__, __[Kroger](https://robinhood.com/stocks/KR/)__, __[Amazon](https://robinhood.com/stocks/AMZN/)__, and others have won billions doing the same.
- __Scandals:__ Last week a judge [greenlighted](https://www.nytimes.com/2022/08/01/business/dealbook/pornhub-visa-mastercard-disney.html) a suit against Visa for processing payments for Pornhub parent __MindGeek__ (which is accused of enabling child sex abuse). The case could make payment juggernauts responsible for all transactions they process.

__Land of the fee…__ home of the paid. US retailers pay 7X more in swipe fees than European retailers, which cap card fees. Most of that fee $$ goes to the bank that actually issued your card, because the bank is the one paying the merchant. But networks like Visa and Mastercard, which move your $5 latte payment from your bank to your coffee shop, are cashing in too: 

- __Booming profits:__ Visa’s and Mastercard’s profits surged last quarter, and Visa’s 66% profit margin is the S&P 500’s highest.
- __Soaring IOUs:__ Credit-card balances spiked 13% last quarter, the biggest jump in 20+ years, as savings dwindled and inflation sizzled. 

Is it, though? (Justin Sullivan/Getty Images)

Swiped

__The swipe economy is changing…__ Swipe fees increase costs for US families by $700 annually, on average, and hit low-income shoppers hardest. Now lawsuits and legislation could rewrite payment rules and curb the swipe-opoly. Meanwhile, Visa and Mastercard are building in-house buy now, pay later systems and crypto products to unlock revenue beyond swipes. But they’ll face scrutiny: last year the DOJ blocked Visa’s $5.3B acquisition of pay-tech giant __Plaid__.

Visa and Mastercard are profiting from higher swipe fees and growing debt, but their swipe-opoly is under fire

__Ready, player none…__ The pandemic gaming boom is over. Global video-game sales are [expected](https://fortune.com/2022/07/05/global-video-games-market-decline/) to fall this year for the first time in seven years. Last week, gaming titan __[Activision](https://robinhood.com/stocks/ATVI/)__ Blizzard (“Call of Duty,” “Overwatch”) said its quarterly revenue was $600M lower than a year ago. __[Nintendo’s](https://robinhood.com/stocks/NTDOY/)__ Switch sales plunged 60%, __[Microsoft](https://robinhood.com/stocks/MSFT/)__ reported lower gaming revenue as Xbox sales slipped, and FIFA legend EA lowered its sales forecast. Up next to report: __[Roblox](https://robinhood.com/stocks/RBLX/)__. Supply woes, recession jitters, and IRL fun are expected to [shrink](https://www.reuters.com/technology/electronic-arts-sales-forecast-disappoints-gaming-craze-cools-2022-08-02/) gaming sales by 9% this year. 

__BTS is back...__ we're not talking K-pop. This year’s back-to-school season will be pricey: families with kids in elementary through high school plan to spend, on average, $864 on supplies, up $168 from 2019. Retailers including Walmart and __[Target](https://robinhood.com/stocks/TGT/)__ have cut their sales outlooks as households prioritize essentials like groceries and __Ticonderoga__ pencils over new laptops. Still, overall BTS spend is on pace to match last year's $37B record. Some parents are dipping into savings to afford supplies. Now, some states are [offering](https://fox59.com/news/sales-tax-holiday-where-you-can-get-a-great-deal-on-back-to-school-shopping/) sales-tax holidays for BTS shopping.

__Love at first swipe…__ for __[Bumble](https://robinhood.com/stocks/BMBL/)__ investors. The dating (and networking) biz, where women make the first move, saw a 24% revenue bump last quarter as its 3M+ paying users spent more $$ on app perks. Now Bumble’s targeting Gen Z with cheaper subscriptions and more digi-gift offerings (think: $5 virtual bouquet). Still, global dating-app downloads have [dipped](https://snacks.robinhood.com/newsletters/6jwczdGxGtc3of4SVziNSV/articles/1ZoI3jEE9V3rGTpGmc8Tp5/) as people pick IRL meetups over speed-swiping. Tinder owner __[Match](https://robinhood.com/stocks/MTCH/)__ saw its shares plunge last week after reporting slowing growth. We’ll see whether Bumble felt the same heat when it reports Wednesday.

__Taking home the mini shampoo…__ Don’t forget free cotton swabs. Hotel staple __[Hyatt](https://robinhood.com/stocks/H/)__ reports tomorrow amid the travel rebound. The leisure + hospitality sector led July job gains as restaurants and hotels scrambled to hire (they’re still 1.2M positions short of prepandemic levels). Hospitality stocks have gained over the past month after strong earnings from Hilton and __[Marriott](https://robinhood.com/stocks/MAR/)__, whose revenue per available room surged 70% year over year. __[Airbnb](https://robinhood.com/stocks/ABNB/)__ had its best quarter ever with record bookings. We’ll see if Hyatt swung back to a profit.

- __[Batted](https://snacks.robinhood.com/newsletters/f8suYXqPD4YTOYUaoKShp/articles/7aMmFkMt3wJvNpCPjvMHFj/):__ After spending $90M on “Batgirl,” __[Warner Discovery](https://robinhood.com/stocks/WBD/)__ is scrapping the DC flick (which it had planned to release directly to HBO Max). Warner’s new execs are shifting focus back to box-office hits as losses mount. 
- __[Taipei](https://snacks.robinhood.com/newsletters/21a7001xbV9iPZ0fMfzUHV/articles/2XOGD88p5uBRL9HBfqymyP/):__ House Speaker Nancy Pelosi became the highest-ranking US official to visit Taiwan in 25 years. Last week’s historic visit drew China’s wrath and rattled global markets. 
- __[Bubbly](https://snacks.robinhood.com/newsletters/29d17uJyHleH663tK5KuJ1/articles/3r4WhA5Mb6b60gYyQWPyhC/):__ __[Pepsi](https://robinhood.com/stocks/PEP/)__ invested $550M in “healthy” energy-drink maker __[Celsius](https://robinhood.com/stocks/CELH/)__. As soda declines, big bev companies have shifted to functional beverages (think: vitamin-packed energy drinks and enhanced waters).

Visa and Mastercard are profiting from higher swipe fees, but their swipe-opoly is under fire

As of June, 61% of American adults lived paycheck to paycheck — up from 55% a year earlier

💳 Visa + Mastercard’s swipe-opoly

__Bye, bye, Batgirl...__ __[Warner Bros](https://robinhood.com/stocks/WBD/)__ splurged [$90M](https://variety.com/2022/film/news/batgirl-not-released-warner-bros-hbo-max-1235331897/) to produce "Batgirl," a movie based on the DC Comics character. Warner was planning to release it directly to its HBO Max streamer. Five years after the project kicked off, “Batgirl” was basically ready to go — but the public won’t see it.

- __Warner Bros. Discovery is axing “Batgirl,”__ which won’t be released on HBO Max or in theaters. FYI: studios rarely scrap finished productions.
- __Losing stream:__ The movie, starring Leslie Grace as Batgirl and Michael Keaton as Batman, was greenlighted last year as part of a push to create buzz-worthy features for HBO Max.
- __Gaining screen:__ Under new execs, Warner Bros. Discovery has pivoted its focus back to theatrical blockbusters as moviegoing recovers. It’s also scrapping its made-for-streaming “Scooby-Doo” movie, which reportedly cost $40M.

__Why not let “Batgirl” fly?…__ Insiders [say](https://variety.com/2022/film/news/batgirl-not-released-warner-bros-hbo-max-1235331897/) the decision had nothing to do with the film’s quality, but was a result of shifting priorities. Remember when Warner’s then-CEO Jason Kilar [decided](https://snacks.robinhood.com/newsletters/5uT3B80poAFNjJebT4r6t/articles/3QEoAxpDIuCNZQVpsMlAV/) to release all of Warner’s 2021 films on HBO Max *at the same time* as theaters? That’s not happening this year. Current CEO David Zaslav seems committed to box-office hits.

- __Marketing $$:__ Studios need to market movies, and it would’ve [cost](https://variety.com/2022/film/news/batgirl-movie-why-not-releasing-warner-bros-1235332062/) between $30M and $50M to advertise “Batgirl” in the US alone — never mind globally. 
- __Awkward:__ While “Batgirl” may not be big enough for a global theatrical release, it’s likely too expensive to make sense for streaming alone. 
- __Write it off:__ Sources say Warner Bros [plans](https://variety.com/2022/film/news/batgirl-movie-why-not-releasing-warner-bros-1235332062/?sub_action=logged_in) to recoup some of its losses by taking a tax write-down on the film. But that would mean it *can’t* monetize it. 

Leslie Grace, the star of “Batgirl” (Sean Zanni/Patrick McMullan via Getty Images)

Batted

__The “sunk-cost fallacy” doesn’t always apply…__ Sure, Warner threw $90M into this movie. But studios need eyes on their productions, and Warner likely thought the marketing costs for “Batgirl” weren’t worth it. Now it’s cutting its losses, and not without reason: Yesterday, Warner revealed that it swung to a $3.4B loss, in its first earnings since merging with Discovery. Shares tanked 12%.

After spending $90M on “Batgirl,” Warner is scrapping the flick as priorities shift from streaming to screening

__Cross-chain bridges…__ pave the way for highway robbery. __Nomad__, a crypto protocol that helps people bridge coins and tokens between different blockchains (think: moving __[USDC](https://robinhood.com/crypto/USDC/)__ from __[ethereum](https://robinhood.com/crypto/ETH/)__ to __moonbeam__), lost $190M to a freewheeling hack on Monday. After someone spotted a security vulnerability in Nomad’s smart contract, potentially hundreds of people got in on the theft, striking a reputational blow to key crypto infrastructure. But the problem’s bigger than just Nomad. 

__Crypto bridge…__ is falling down. Nomad is only the most recent example of cracking crypto bridges. __Wormhole__ was hit with a $325M hack in February, $625M was boosted from __Ronin__ in March, and $100M was lifted from __Harmony__ in June. In other words, cross-chain bridges are increasingly taking a beating. Just this year:

- __69%__ of all stolen crypto has been looted from bridges (as opposed to exchanges or individuals).
- __$2B__ has been stolen from crypto bridges in at least 13 cross-chain bridge hacks.

Raided

__Cross-chain bridges are critical for crypto…__ but their shaky foundations put the #FutureOfFinance at risk. Different blockchains (think: __[bitcoin](https://robinhood.com/crypto/BTC/)__, ethereum, __[solana](https://robinhood.com/crypto/SOL/)__) are kind of like walled-off crypto kingdoms, with cross-chain bridges as the toll roads letting traders move coins (and Ape NFTs) between them. No bridges = no trade, making cross-chain bridges crucial to decentralized finance (DeFi). But like on the roads of old, robbers are hiding in the digital bushes — and they're getting bolder. Bridge security will have to get its act together if blockchain kingdoms are to potentially flourish.

Thieves stole $190M from a crypto cross-chain bridge, but the risk to decentralized finance is about more than $$

After spending $90M on “Batgirl,” Warner is axing the flick as priorities shift

Every US state but Delaware had wildfires last year

🦇 Warner scraps “Batgirl”

__Girls’ night out > *another* coffee date…__ __[Match Group](https://robinhood.com/stocks/MTCH/)__ wasn’t feeling the love from investors after earnings yesterday. Shares of the dating icon plunged 18% after it reported that swipe-fueled growth was cooling. Refresher: Match owns Tinder, Hinge, OkCupid, and 20+ other e-romance businesses. 

- __Burned out:__ Match’s revenue growth slowed significantly last quarter to 12%, and it’s lowered its forecast for the current quarter too.
- __Left-swiped:__ Tinder’s CEO stepped down this week after less than a year on the job. America’s #1 dating app also ditched its romantic metaverse plans (including a Tinder digi-coin).

__From FaceTime to face-to-face…__ Match benefited during the pandemic as stuck-at-home singles shelled out more $$ for extra swipes to connect. But now users are more interested in BFF vacay retreats than at-home swipe sprees. Last quarter, Match's revenue per user grew just 3% — down from 15% last year. Global dating-app revenue has grown every year since 2015, but downloads have dipped from prepandemic highs.

- __Beesting:__ Rival __[Bumble](https://robinhood.com/stocks/BMBL/)__ has nearly doubled its market share since 2017 and its stock is [down](https://robinhood.com/stocks/BMBL/) less than 0.5% this year — whereas Match is down *over 50%*. Bumble (which reports next week) has said it has “substantial” growth opportunity in the US.

Tinder’s trampled spark (Peerapon Boonyakiat/Getty Images)

Ghosted

__There are plenty of fish left in the sea…__ The key is fishing in the *right* spot. As Match’s saturated North American market hits a wall, it’s looking overseas to expand. Last year, Match spent $1.7B to buy Korean social company Hyperconnect (its biggest acquisition) and launched Hinge in Germany. This year Hinge is expected to bring in $300M in revenue as it launches in other European countries and India, where dating apps are less popular.

Unmatched: Tinder's parent company lost a fifth of its value as its pandemic swiping boom fizzles

__A modern Midas…__ In Greek mythology, everything King Midas touched turned to gold. Activist hedge fund __Elliott Management__ seems to think it has the Midas touch too. Shares of __[PayPal](https://robinhood.com/stocks/PYPL/)__ and __[Pinterest](https://robinhood.com/stocks/PINS/)__ have spiked 14%+ this week after Elliott [disclosed](https://www.reuters.com/technology/paypal-reveals-2-billion-stake-held-by-elliott-announces-new-cfo-2022-08-02/) big stakes in each company (it’s now their top shareholder). 

- __Staying active:__ Elliott is one of the world’s oldest hedge funds, founded in 1977 by Paul Singer. Since then, it’s bought 40 companies (like: __[Barnes & Noble](https://robinhood.com/stocks/BNED/)__, __LogMeIn__), built stakes in __[Twitter](https://robinhood.com/stocks/TWTR/)__, __[AT&T](https://robinhood.com/stocks/T/)__, and __Samsung__, and is managing $56B in assets. 
- __High stakes:__ Elliott uses its stake in companies to force them to change (think: cost cutting, replacing execs). Right now it’s also invested in __[Marathon Petroleum](https://robinhood.com/stocks/MPC/)__, __[Tesla](https://robinhood.com/stocks/TSLA/)__, __[Wayfair](https://robinhood.com/stocks/W/)__, and __[Suncor Energy](https://robinhood.com/stocks/SU/)__.

__Activism’s so hot right now…__ Shareholder activism boomed last year, thanks partly to growing awareness of environmental, social, and governance issues. Investment companies like __Engine No. 1__ and __[Icahn Enterprises](https://robinhood.com/stocks/IEP/)__ have lobbied (successfully) to [install](https://snacks.robinhood.com/newsletters/GthYqJXfXa1UXvTAPKzZr/articles/1zYvayrbd8lJxnS8ecuB30/) climate-focused board members at __[Exxon](https://robinhood.com/stocks/XOM/)__ and (unsuccessfully) to [force](https://www.nytimes.com/2022/05/26/business/carl-icahn-mcdonalds-pigs.html) __[McDonald’s](https://robinhood.com/stocks/MCD/)__ to change how it treats its pigs. 

- __But at the end of the trading day__, a primary goal of shareholder activists is plain ol’ profits. Example: Elliott bought Athenahealth for $5.7B in 2018 and sold it for $17B earlier this year, pocketing $5B+.

Staked

__Activists love bargains…__ and in today’s market many companies are priced lower. The S&P 500 is down 13% this year, but some shares are down way more: before the Elliott news, Pinterest and PayPal had lost about 40% and 50% this year. For activists like Elliott, slumped shares are an opportunity to launch turnaround efforts at a lower price. Shareholder activism is expected to rise this year as investors keep bargain hunting.

PayPal and Pinterest shares soar after activist investor Elliott snaps up their slumping stocks

Tinder owner Match Group sees shares sink as its pandemic swiping boom fizzles

Airbnb made more money on July 4 than it has on any other day in its history, helping it notch a record quarter

💔 Match’s dating doldrums

__The plot thickens...__ House Speaker Nancy Pelosi landed in Taiwan yesterday, [becoming](https://www.wsj.com/articles/nancy-pelosi-heads-to-taipei-as-china-warns-of-disastrous-consequences-11659442605) the highest-ranking US official to visit the self-ruling island in 25 years. The visit, part of a broader Asia tour, is causing global drama. China has long claimed Taiwan and its population of 23M to be part of its territory, [saying](https://www.reuters.com/world/china/chinas-xi-says-reunification-with-taiwan-must-will-be-realised-2021-10-09/) that reunification is its "historical task." Chinese President Xi Jinping has vowed to eventually take Taiwan back by any means. Pelosi wants to show support for the small democracy, and is set to meet with the Taiwanese president today.

- __China's response:__ Beijing staunchly opposed the trip, threatening consequences for the US. American officials [said](https://www.wsj.com/articles/nancy-pelosi-heads-to-taipei-as-china-warns-of-disastrous-consequences-11659442605) that China has been staging military drills, sending missiles near Taiwan, and boosting its military presence closer to the island.
- __America's response:__ President Biden can't really dictate where a member of Congress can travel (#SeparationOfPowers). But he did [say](https://www.nytimes.com/2022/07/29/world/asia/china-taiwan-pelosi-explained.html): "I think that the military thinks it’s not a good idea right now.”

__*Interesting* timing…__ US-China relations are at a precarious low, exacerbated by economic and military competition. Meanwhile, Russia’s invasion of Ukraine is far from over. China hasn’t overtly intervened on Russia’s behalf, but the two superpowers have their interests allied against the US. At the same time, China is a key trade partner: the US imports [more](https://www.cfr.org/backgrounder/contentious-us-china-trade-relationship) from China than from any other country, and China is critical for US exports. Taiwan’s __[TSMC](https://robinhood.com/stocks/TSM/)__ makes [half](https://www.cnbc.com/2022/08/02/apple-chipmaker-tsmc-warns-taiwan-china-war-would-make-everybody-losers.html) of the world’s computer chips (including __[Apple’s](https://robinhood.com/stocks/AAPL/)__).

USA in Taipei (Taiwanese Foreign Ministry/Anadolu Agency/Getty Images)

Visit

__Geopolitical tension is market kryptonite…__ Investors hate uncertainty, and the world is rife with it. China’s economy is tied to the world by a thread right now, and some fear Pelosi’s visit could be a pair of scissors. Escalating tensions with both Russia and China have investors on edge: global markets [tumbled](https://www.cnn.com/2022/08/01/investing/global-markets-pelosi-taiwan-intl-hnk/index.html) yesterday, from Hong Kong to New York.

Nancy Pelosi’s historic visit to Taiwan draws China’s wrath, sending shivers across global markets

__Rise of WFU…__ work from __[Uber](https://robinhood.com/stocks/UBER/)__. Summer getaways and high gas prices have gifted Uber a five-star quarter. Uber shares surged 19% yesterday after the ride-hailer more than doubled its revenue to a record $8B last quarter, [crushing](https://www.nytimes.com/2022/08/02/business/uber-quarterly-earnings.html) expectations. 

- __Backseat bliss:__ A record 122M riders and drivers used the app each month, fueling Uber’s first cash-flow-positive quarter.
- __Cold cuts:__ Uber’s delivery biz (mainly UberEats) grew 12%, but growth slowed from the year before as people ditched doorstep deliveries for boozy brunches.
- __Billion-dollar binge:__ Uber lost $2.6B on startup investments like __Zomato__ and __[Grab](https://robinhood.com/stocks/GRAB/)__, but execs say the overall biz is in its strongest position in years.

__Looking for your UberX…__ in a sea of Camrys. From festival szn to IRL work happy hours, more consumers are turning to ride-hailing as outings return. Uber introduced a fuel surcharge in March to combat high pump prices, but it didn’t stop riders from splurging on private drivers. In May, Uber made an average of $87/per customer *each month*, a 60% jump from 2020.

Surge

__Don't lose sight of your core biz…__ even when it falls through. While Eats was Uber’s MVP during the pandemic, its hailing biz has finally caught up. Uber’s ride segment finally surpassed Eats revenue in the first quarter and continued the trend in Q2. Now Uber’s recruiting new drivers ahead of a busy fall season by adding highly requested driver features like the ability to see fares up front. We’ll see whether the ride rebound is as strong for __[Lyft](https://robinhood.com/stocks/LYFT/)__ when it reports Thursday.

Uber posts record revenue as the summer travel surge and gas avoidance rev up ride-hailing demand

Pelosi’s historic Taiwan visit draws China’s wrath, sending shivers across global markets

Tiger Woods reportedly turned down a $700M+ offer to play in the Saudi-funded LIV Golf series