__Cue the “Social Network” soundtrack...__ Tension is rising at the company formerly known as Facebook. __[Meta](https://robinhood.com/stocks/FB)__ shares tanked 22% after the company [disappointed](https://www.cnbc.com/2022/02/02/facebook-parent-meta-fb-q4-2021-earnings.html) on earnings and user growth. Meta’s quarterly revenue growth slowed, with sales up just 20% from a year ago (compared with 33% growth the previous quarter and 56% before that). Even worse: Quarterly profit *fell* by $1B from a year earlier.

- __Meta blamed__ __[Apple’s](https://robinhood.com/stocks/AAPL)__ iOS update, which lets users opt out of ad tracking, and inflation and supply issues for hurting advertiser spend. Ads still make up 97% of Meta’s revenue. 
- __Awk:__ Google just posted its third straight quarter of record sales despite facing the same challenges, as holiday searches drove ad spend.

__An Oculus for Hanukkah...__ Smart Ray-Bans for Christmas. This holiday quarter was the first that Meta broke out results for Facebook Reality Labs, which houses its VR and AR goodies. Think: $200 Oculus VR headsets, which are required to access Meta’s immersive “Horizon Worlds.” ICYMI: Meta is positioning itself as a metaverse company, *not* a social company. How it’s going:

- __Virtual $$:__ Reality Labs brought in $877M in quarterly revenue, slightly up from a year ago. But its operating loss was *$3.3B*. 
- __To build an immersive meta-future,__ Meta says it’ll spend $10B over the next year. It’s a big bet that’s currently hurting profits. 
- __A bet that *didn’t* pan out:__ Meta just ended its cryptocurrency project, Diem (fka: Libra), [selling](https://www.theverge.com/2022/1/31/22911426/meta-diem-cryptocurrency-confirms-sale) it for $200M after years of regulatory pushback. 

Looking for the lost profit like [gremlin/E+ via Getty Images]

Reality

__The metaverse = a major conversation-shifter...__ because Meta *doesn't* want you talking about its failed crypto project, regulatory scrutiny, misinfo issues, and Insta’s mental-health toll on teens. Zuck hopes that by 2030 the metaverse will reach 1B people and generate hundreds of billions in commerce sales. __[Microsoft](https://robinhood.com/stocks/MSFT)__, __[Roblox](https://robinhood.com/stocks/RBLX)__, and __[Nvidia](https://robinhood.com/stocks/NVDA)__ are also investing in a meta-future. But today Meta is still an ad-based social giant with the same sticky problems. 

Meta’s shares tank on bummer earnings, while its metaverse investments weigh on profits

__Shamu meets the Millennium Force…__ Bring a poncho. __[SeaWorld](https://robinhood.com/stocks/SEAS)__ has made a splashy comeback since the pandemic forced it to shut down parks and furlough nearly [all](https://www.wsj.com/articles/seaworld-lays-off-most-furloughed-employees-11599260090) its employees in 2020. Last quarter, SeaWorld’s sales hit a [record](https://www.tampabay.com/life-culture/entertainment/theme-parks/2021/08/05/seaworld-busch-gardens-beat-market-estimates-on-attendance-revenue/) as thrill-seekers returned to its water parks for holiday-themed nights ([see](https://seaworldentertainment.com/howl-o-scream/): Howl-O-Scream). Now SeaWorld wants to double down by buying fellow amusement-park operator __[Cedar Fair](https://robinhood.com/stocks/FUN)__ for $3.4B. What’s on the table:

- __Cedar [owns](https://www.cedarfair.com/properties) 11 US-based__ amusement and water parks, including California’s Great Americas. SeaWorld owns 12 US parks, so it could double its footprint with the acquisition. 
- __Deal déjà vu:__ Rival __[Six Flags](https://robinhood.com/stocks/SIX)__ offered to buy Cedar Fair for $4B back in 2019, but was rejected because the price was "too low." Not promising for SeaWorld’s $3.4B bid.

__Beached…__ amusement parks were feeling the pain mid-pandemic. And despite the record revenue, SeaWorld’s attendance still isn’t back to pre-pandemic levels. Tighter international travel requirements have stalled the return of foreign tourists, which made up more than 10% of SeaWorld’s guests. But Americans are starting to fill the spending gap:

- __NBCUniversal’s__ theme-park division just posted its most profitable quarter [*ever*](https://deadline.com/2022/01/universal-studios-orlando-nbcuniversal-theme-parks-jeff-shell-universal-studios-hollywood-1234920882/) as domestic visitors splurged on souvenirs and pretzels. Cedar Fair also saw record revenue *and* in-park spending last quarter.

Splash

__Spreading out can minimize risk… if one region gets hit hard.__ SeaWorld’s properties are primarily scattered [across](https://seaworldentertainment.com/our-brands/) densely populated warm-weather states, like Florida and California. Meanwhile, Cedar Fair’s parks dominate the Midwest and rural areas. While Omicron continues to threaten recovery, diversifying location “portfolios” can help spread out risk. And could lead to billions in extra sales for SeaWorld.

Shamu icon SeaWorld makes a $3.4B bid for rival park chain Cedar Fair to diversify its footprint

Dow Jones

S&P 500

Nasdaq

Bitcoin

[Chesnot / Contributor via Getty Images]

Otters have tiny pockets in their skin to store their favorite rocks, which help them crack open mollusks and clams

🤖 Facebook’s first Meta earnings

__Double take on the gas-price sign...__ #PumpAnxiety is real. Gas prices are up 50% from a year ago and oil is near a seven-year high. That's hurting your wallet but helping energy giants. Last quarter, Exxon's sales [climbed](https://www.cnbc.com/2022/02/01/exxon-xom-earnings-q4-2021.html) over 80% from a year ago, to a slick $85B. Annual profit hit $23B, the highest since 2014. Last week __[Chevron](https://robinhood.com/stocks/CVX)__ also reported its highest yearly profit since 2014. __[Shell](https://robinhood.com/stocks/SHEL)__ and __[BP](https://robinhood.com/stocks/BP)__ report this week.

- __Exx-on:__ Exxon shares climbed 5% yesterday to their highest level since April 2019.
- __Exx-off:__ Exxon paid $20B in debt last year, bringing its IOUs to pre-Covid levels.
- __Houst-on:__ Exxon is moving its HQ to Houston as part of a reorg that it says will yield $6B in cost savings.

__Shareholders get $$$...__ Instead of simply reinvesting their cash into new oil projects, gas giants are [paying it forward](https://www.wsj.com/articles/exxon-chevron-hit-gushers-of-cash-as-big-oil-companies-lure-back-investors-11643721078?mod=hp_lead_pos12) to investors. Public companies can do that in two key ways: through dividends (literally giving investors $$) and share buybacks (which can boost share prices by reducing available shares). 

- __Chevron,__ whose shares hit a record last week, bumped its dividend payout by 6% to $1.42/share and said it’ll buy back up to $5B of its own stock this year.
- __Exxon__ said it would start buying back its stock this quarter and expected to boost its dividend this year. Shares are up 78% over the past year.

We’re going to need a bigger dividend [mediaphotos/E+ via Getty Images]

Gasolina

__“Anti-growth” mode is the new growth mode…__ Companies in relatively stagnant industries (think: oil and industrials) have seen their stock jump. At the same time, “growth stocks” like tech have plunged well below records. Growth companies are (in-)famous for splurging *now* to power more growth long term. But as interest rates and inflation rise, the value of a company’s future growth falls. For investors, results *now* (like: dividends from oil profits) are starting to look more interesting than potential growth.

Oil giants notch stunning profits as gas prices soar — now they’re paying investors

__The King of the NFL…__ Could become the king of the *NFT*. Yesterday, seven-time Super Bowl champ Tom Brady [announced](https://www.sportingnews.com/us/nfl/news/tom-brady-retirement-business-family/1b4z3gnsyq1yx1ryny461yood9#:~:text=What%20companies%20does%20Tom%20Brady,wrote%20in%20his%20retirement%20post.) his retirement from football on __[Twitter](https://robinhood.com/stocks/TWTR)__ and Insta. Over 22 seasons, Brady set all-time passing, touchdown, and win records, establishing himself as the GOAT — greatest of all time. Brady is also the highest-earning NFL player *ever*. He earned $293M on the field and $160M off the field through sponsorships for companies like __[Under Armour](https://robinhood.com/stocks/UA)__ and __Subway__. Between touchdowns, he *also* cofounded several businesses:

- __Blockchain Brady:__ Last year Brady and partners launched __Autograph.io__, a platform that sells collectible NFTs featuring famous athletes like Naomi Osaka, Tiger Woods, and… Tom Brady. In January it raised $170M. Brady and his wife, Gisele Bündchen, also took a stake in crypto exchange __FTX__ last June (even appearing in its [ad](https://www.youtube.com/watch?v=mfGtDjbpRBo&t=2s)).
- __Brady has cofounded__ wellness-coaching biz __TB 12 Sports__ (60-min. sessions for $200), apparel co. __Brady Brand__ ([T-shirts](https://www.bradybrand.com/products/regenerate-ponte-football-short-sleeve-graphite) for $140), and content shop __199 Productions__ (Brady’s expected to star in its upcoming film). 

__Old GOAT, new tricks…__ Brady helped write the playbook for the pro athlete side hustle, using his dominance to create a huge fan base — and then selling products to those fans. Others have followed the same formula:

- __NBA greats__ LeBron James, Kevin Durant, and Steph Curry have all helped found sports-media companies in the past decade.
- __Tennis icon Serena Williams__ has cofounded jewelry, apparel, and investment companies. Meanwhile, Maria Sharapova and Cristiano Ronaldo have launched candy, footwear, and fragrance brands while still competing.

[Kevin C. Cox / Getty Images]

GOAT

__The core brand is only the beginning…__ Brady’s “core brand” is football, but his next could be a crypto-powered Brady-verse. His NFL career earned him more $$ than any other player, but his crypto investments could be the plays that make him a billionaire. Other celeb-preneurs have made more money through their side hustles than their original careers: Rihanna and Kim Kardashian became billionaires only after launching multibillion-dollar beauty brands. If Brady can attract loyal fans to his crypto businesses, he could become the first all-star in the booming industry. 

Tom Brady retires as the highest-paid NFL star, but could make even more as a crypto-preneur

Tom Brady retires as the highest-paid NFL star ever, but could make even more as a crypto-preneur

This year's Super Bowl tickets are the most expensive ever, up 20% from last year, to an average price of $10K

🏈 Tom Brady’s next (crypto) play

__The rock ‘n roll revolt…__ just got an encore. Criticism from cultural icons has pushed __[Spotify](https://robinhood.com/stocks/SPOT)__ to be more upfront about its moderation policies. Refresher: last week, Neil Young demanded that Spotify remove his tunes or remove Joe Rogan, the world’s most popular podcaster. The backlash was fueled by an interview Rogan published with a scientist who promoted Covid vaccine misinformation. Young pulled his music from Spotify, and Joni Mitchell said she’d follow. Then Brene Brown [said](https://www.theverge.com/2022/1/30/22909140/brene-brown-spotify-podcast-joe-rogan-controversy) she was pausing her Spotify-exclusive pod. Now, Spotify’s making amends: 

- __Spotify published its [moderation policies](https://newsroom.spotify.com/2022-01-30/spotify-platform-rules/),__ which weren’t publicly available before and weren’t clearly enforced consistently. For example: Spotify has removed thousands of episodes containing Covid misinfo, but not the Joe Rogan ep. The streamer has also removed dozens of Rogan episodes, but no vax-related ones.
- __Spotify is working to add a content advisory__ to any Covid-related pods, which will direct listeners to a Covid hub with up-to-date, trusted info. 
- __Rogan’s response:__ In a 10-minute Insta video, Rogan said he would try harder to “balance out these more controversial viewpoints with other people’s perspectives” and that he’s happy to include a disclaimer on his pod. 

Spotify’s having its “__[Facebook](https://robinhood.com/stocks/FB)__ moment”... Facebook has faced major backlash for failing to rein in misinfo around important national issues (flashback to 2016 elections). __[Twitter](https://robinhood.com/stocks/TWTR)__, YouTube, and other social apps have also struggled with content moderation as they’ve grown — from regulatory probes to public backlash. Facebook has paid __[Accenture](https://robinhood.com/stocks/ACN)__ $500M per year to help moderate its platform, but still hasn’t regained user trust.

Spotify recording its Platform Policies [Vladimir Godnik via GettyImages]

__Stars have huge platform power…__ And if platforms lose stars, they could also lose users. Neil Young and Joni Mitchell successfully pushed Spotify to reverse its stance on Covid misinformation. And stars with even larger followings (cough, Taylor Swift) could push platforms further, as some [viral](https://www.nytimes.com/2022/01/31/technology/joe-rogan-spotify-controversy.html) tweets have flagged. Now that Spotify passed __[Apple](https://robinhood.com/stocks/AAPL)__ as the world’s largest pod platform, stars and their fans could hold it to higher standards when it comes to sensitive issues like elections, public health, and climate change.

Spotify boosts its moderation transparency after celeb-driven backlash vs Joe Rogan’s Covid content

__Unicorns find shelter…__ More than $1T has been wiped from the crypto market since November, when it was worth $3T. Despite the crypto currency plunge, venture capital is doubling down on crypto *companies*. Bahamas-based crypto exchange __FTX__ just raised [$400M](https://money.yahoo.com/crypto-exchange-ftx-raises-fresh-capital-now-valued-at-32-billion-135617687.html) in its latest funding round, giving it a $32B valuation — getting it closer to rival __[Coinbase](https://robinhood.com/stocks/COIN)__. FTX's app lets retail and institutional buyers make sophisticated crypto and token trades, as well as mint, auction, or trade NFTs. Its US sister exchange, __FTX US__, announced new [funding](https://www.cnbc.com/2022/01/31/crypto-exchange-ftx-valued-at-32-billion-amid-bitcoin-price-plunge.html) at an $8B valuation last week:

- __Fee’d Up:__ FTX makes its money off trading activity and fees, including a 5% [fee](https://help.ftx.com/hc/en-us/articles/360061609792-NFT-Overview#What-are-the-fees-4) to trade NFTs. 
- __Flashy Backers:__ FTX owns the naming rights to Miami Heat stadium and is the MLB's official crypto exchange. Power couple Tom Brady and Gisele Bundchen are also investors and brand ambassadors.

__Wild ride for cryptos...__ __[Bitcoin](https://robinhood.com/crypto/BTC)__ and __[Ethereum](https://robinhood.com/crypto/ETH)__, the two biggest cryptos, have fallen 40% from their highs as investors [brace](https://snacks.robinhood.com/newsletters/2MVH2KDOTUkUCH5cozGBos/articles/5FbD7KaOehttkedpLIaG0m/) for inflation-fighting Fed moves and ditch riskier assets. It's been bumpy: bitcoin hit a one-year low in July, dropping to $30K, before more than doubling to its record in November. Now, it's on pace for its worst month since May. Despite the sell-off, venture funding for crypto has been booming. Venture investments in crypto and blockchain startups reached [$33B](https://blockworks.co/report-vcs-invested-33b-in-crypto-and-blockchain-startups-in-2021/#:~:text=In%202021%2C%20venture%20capitalists%20invested,firms%20across%20all%20sectors%20globally) last year — and are expected to surpass that this year.

Chill

__It's too soon to tell if a "crypto winter" is here…__ Institutional crypto funds added a record [$9.3B](https://cointelegraph.com/news/crypto-funds-attracted-9-3b-in-inflows-in-2021-as-institutional-adoption-grew) to their investment funds in 2021, and cryptos aren't alone in seeing declines: The Nasdaq index is down 10% this year. Also, on-chain action (aka the volume of crypto transactions and activity happening on blockchains) hasn't reached anywhere near 2018 levels when activity crashed. But some bears like __[JPMorgan](https://robinhood.com/stocks/JPM)__ CEO Jamie Dimon say crypto is worthless until there’s more regulation. Now, President Biden is reportedly planning moves: Barron's reported Biden is [planning](https://www.barrons.com/articles/white-house-executive-action-regulate-cryptos-national-security-51643312454) an executive order that could help set the stage for crypto and digital asset regulation.

Coin exchange FTX hits a $32B valuation as crypto investments hit records, and some fear a “crypto winter”

Spotify boosts its moderation transparency after celeb-driven backlash vs Joe Rogan

[NurPhoto / Contributor via Getty Images]

Joseph Searles became the New York Stock Exchange’s first African American floor broker in 1973

🎤 Spotify’s Covid content crackdown

__On your mark, get set…__ Go digital. China will [promote](https://www.bloomberg.com/news/articles/2022-01-10/china-offers-digital-yuan-at-olympics-to-test-overseas-appeal?sref=q3KSFp38) its state-run digital currency at the Winter Olympics, which kick off on Friday in Beijing. The digital yuan (#digi-yuan) is Earth’s first major central bank-backed digital currency. China started rolling it out in 2019, and even tested expiration dates to fuel spending. This month, China opened it up to all citizens and launched a digi-wallet app (it already has 261M users).  

- __Digi-yuan is real Chinese currency,__ but code instead of paper. Unlike crypto and cash, there's no anonymity with digi-yuan (China traces spending).
- __Digi-snow cone:__ International athletes and visitors can use it to pay for transit, food, and even Great Wall tours. But US lawmakers told Olympic athletes not to use it on privacy concerns. 
- __Digi-Big Mac:__ China is pushing US companies like __[Nike](https://robinhood.com/stocks/NKE)__ and __[Visa](https://robinhood.com/stocks/V)__ to accept digi-yuans, and __[McDonald’s](https://robinhood.com/stocks/MCD)__ and __Subway__ locations in Shanghai already do. 
- __Digi-competition:__ China says its digi wallet won’t replace popular payment apps like __[Alibaba](https://robinhood.com/stocks/BABA)__-backed Alipay and __[Tencent’s](https://robinhood.com/stocks/TCEHY)__ WeChat Pay, which support digi-yuan. But those providers aren’t available at the Olympic Village, while China’s digi-wallet is (awk).

__Watch the throne…__ Digi-yuan could [threaten](https://www.bloomberg.com/news/articles/2022-01-20/fed-takes-key-step-forward-in-deciding-on-digital-coin-issuance?sref=q3KSFp38) the US dollar’s global trade dominance and soften the effect of US sanctions, especially on China. The USD’s reliable rep has made it the world's "reserve currency" for international purchases (think: Canada buys oil from Mexico... in USD), making US sanctions a nightmare for impacted countries. Also: USD is used in 88% of foreign exchange trades. But the dollar’s share of global payments is falling as euros, yuans, and cryptos gain. And now, China is positioning the digi-yuan for international use. 

Racing for Olympic digi-gold [Aksonov/E+ via GettyImages]

__The race to digi-dominance is on…__ 87 countries are developing digital currencies, which settle instantly, are less expensive to create, and are more accessible for people without bank accounts. Of the five biggest banking systems, the US is furthest from going digital – though it’s [exploring](https://www.cnbc.com/2022/01/20/fed-releases-long-awaited-study-on-a-digital-dollar-but-doesnt-take-a-position-yet-on-creating-one.html) a digital dollar. But there are concerns with digi-currencies: surveillance states like China could use them to automatically fine citizens for things like jaywalking (it’s [already using](https://www.newsweek.com/jaywalking-china-facial-recognition-surveillance-will-soon-fine-citizens-text-861401) facial recognition cameras to send fine notifications via text). 

China champions digi-yuan at the Beijing Olympics as countries race to launch digital currencies

__Spoti-fiasco...__ __[Spotify’s](https://robinhood.com/stocks/SPOT)__ getting heat for "The Joe Rogan Experience," aka: the world's largest pod. In December, Rogan interviewed Covid vaccine critic Dr. Robert Malone. Cue: 270 medical experts called on Spotify to curb misinfo on its platform. Then, Neil Young demanded that Spotify remove his tunes *or* remove Rogan — Spotify [nixed](https://www.nytimes.com/2022/01/26/arts/music/spotify-neil-young-joe-rogan.html) Young. The streamer reportedly paid $100M to make JRE Spotify-exclusive, as pods play a growing role in its growth (FYI: it reports on Wednesday). As its pod biz booms, Spotify could face more pressure to define its moderation policies.

__Yellow Cab meets Jetsons...__ Electric flying taxis (think: futuristic helicopters) are taking off.  __[Boeing](https://robinhood.com/stocks/BA)__-backed startup __Wisk__ just [sealed](https://www.cnbc.com/2021/05/05/boeing-backed-start-up-wisk-inks-first-deal-to-operate-air-taxis-in-the-us.html) a deal with __[Blade’s](https://robinhood.com/stocks/BLDE)__ urban mobility network to fly autonomous taxis in the US. Earlier this month, __[Toyota](https://robinhood.com/stocks/TM)__-backed __Joby__ said its prototype [completed](https://www.thestreet.com/investing/boeing-wants-to-take-air-taxis-to-new-heights-will-it-ever-happen) a high-speed flight. ETA for passenger service: 2024. Houston, LA, and Orlando have [announced](https://www.bbc.com/news/business-58895259) plans to establish air taxi “skyports.” *But first*, flying taxis need the FAA’s greenlight to fly commercially. And companies still face several hurdles — from air traffic control challenges, to public support. 

Zoom Out

Stories we’re watching...

__Tech in the red...__ The tech-heavy Nasdaq index is still in a [correction](https://snacks.robinhood.com/newsletters/2MVH2KDOTUkUCH5cozGBos/articles/5FbD7KaOehttkedpLIaG0m/) (down 14% from its November record). Now, all eyes are on earnings coming up from __[Amazon](https://robinhood.com/stocks/AMZN)__, __[Alphabet](https://robinhood.com/stocks/GOOGL)__, and __[Meta](https://robinhood.com/stocks/FB)__. Amazon’s hot holiday profits could get dinged by wage hikes, while Meta plans to finally break out results for its AR segment. Investors are curious to see if the tech biggies can keep up their streaks, after pandemic thrivers like __[Netflix](https://robinhood.com/stocks/NFLX)__ and __[Peloton](https://robinhood.com/stocks/PTON)__ reported slowing growth. Still, Microsoft's big earnings beat and Apple’s [record](https://snacks.robinhood.com/newsletters/6lzvLrthhcs2XAAKrGo75i/) quarterly sales are encouraging.

__Rattling some pills…__ The FDA halted distribution of __[Regeneron’s](https://robinhood.com/stocks/REGN)__ and __[Eli Lilly’s](https://robinhood.com/stocks/LLY)__ Covid treatments last week because the drugs haven’t been working against Omicron, which makes up 99% of US cases. Bad news for the drugmakers, since those antibody drugs drove nearly a third of their sales last quarter. Meanwhile, __[Merck's](https://robinhood.com/stocks/MRK)__ pioneering Covid pill is showing promise in treating the variant, and is expected to generate $7B in sales this year. We might get updates on how pharma views [Omicron variant #2](https://www.npr.org/sections/goatsandsoda/2022/01/27/1076123109/new-covid-variant-omicron-ba-2) (it’s a thing) when they report this week.

Events

Coming up this week...

- __[Fruity](https://snacks.robinhood.com/newsletters/6lzvLrthhcs2XAAKrGo75i/articles/7e5qXvCBhkuZLAaOHOSRix/):__ __[Apple](https://robinhood.com/stocks/AAPL)__ had its biggest quarter of sales *ever* as people upgraded to new iPhone 13s and faster Macs. Despite supply hurdles, sales grew across every product line except iPads (womp).
- __[Elsa](https://snacks.robinhood.com/newsletters/4QN62CZuPk6oaS6C02r6Z0/articles/3aC2oqFOa8KihaatuNebxB/):__ Barbie-maker __[Mattel](https://robinhood.com/stocks/MAT)__ won back the rights to make Disney princess dolls, after losing them six years ago to rival toy giant __[Hasbro](https://robinhood.com/stocks/HAS)__. __[Disney’s](https://robinhood.com/stocks/DIS)__ licensing biz shows that intellectual property is queen. 
- __[Elon](https://snacks.robinhood.com/newsletters/4QN62CZuPk6oaS6C02r6Z0/articles/3vuKBJLCx6CRhgUtmhV7Pw/):__ __[Tesla’s](https://robinhood.com/stocks/TSLA)__ quarterly profit 9X’d from a year earlier, while annual car deliveries nearly doubled to a Musk-ular 926K. But its market share is plunging as OGs like __[Ford](https://robinhood.com/stocks/F)__, __[GM](https://robinhood.com/stocks/GM)__, and __[Volkswagen](https://robinhood.com/stocks/VWAGY)__ scale EV production. 

ICYMI

Last week's highlights…

China champions digi-yuan at the Olympics as countries race to launch digital currencies

[Matthias Hangst / Staff via Getty Images]

The Beijing Winter Olympics will be the first to use 100% artificial snow

🪙 China’s Olympic digi-currency

__Party in Cupertino...__ home of the world’s most valuable company. __[Apple](https://robinhood.com/stocks/AAPL)__ had its [biggest](https://www.cnbc.com/2022/01/27/apple-aapl-earnings-q1-2022.html) quarter of sales ever in the three months leading up to Christmas. Despite supply challenges, the Fruit's sales last quarter jumped 11% to an expectation-beating $124B. Sales grew across every product line except iPads (womp). CEO Tim Cook reassured investors by saying supply issues were easing, and Apple shares spiked 5%.

- __iPhone sales,__ which make up more than half of Apple's total, jumped 9% as people upgraded to new 5G models. FYI: It was the first full quarter of iPhone 13 sales.
- __Macs__ saw the strongest sales growth of any Apple hardware, thanks to new $2K Pro models featuring [faster](https://www.apple.com/newsroom/2021/10/introducing-m1-pro-and-m1-max-the-most-powerful-chips-apple-has-ever-built/) Apple-made chips instead of Intel ones.
- __Services__ revenue (think: App Store, Music, iCloud) jumped 25% and was Apple's most profitable unit, helping cancel out losses from supply issues and inflation.

__Party in Beijing…__ Apple also just [reclaimed](https://www.cnbc.com/2022/01/27/apple-china-iphone-maker-hits-record-market-share-claims-nopoint1-spot.html) its #1 smartphone-seller spot in China for the first time in six years. iPhones now account for nearly a quarter of phones in the key market. While total smartphone sales in China fell 9% on shortages and sluggish spending, iPhone sales *grew* 32% in the country of nearly 1.5B people. The iPhone 13, with its “relatively lower starting price” and 5G features, drove growth in “switchers” (like: former Android-ers). 

Waiting for the iPhone 15 Pro Max Plus 7G+ Pro [Westend61 via Getty Images]

Sweet

__Apple has a double edge in China…__ which makes up one-fifth of its sales — nearly as much as Europe. Edge #1: While US-China tensions grow and American tech companies pull out of the market, Apple has been exempt from many of the limitations imposed on foreign companies. That could be thanks to a $275B deal [reportedly](https://snacks.robinhood.com/newsletters/8CJdeeRfDkfhBdQKIiTPE/articles/1jm6swCYJUotXpvqyDRoM3/) struck between Cook and the Chinese gov’t. Edge #2: US sanctions helped Apple gain market share in China because they blocked Chinese competitors like __Huawei__ from getting key components and software for phones.

Apple has its best quarterly sales ever — its “double edge” in China helped

__Saweetie ’n’ Sour…__ Like its Saweetie-inspired sauce, __[McDonald’s](https://robinhood.com/stocks/MCD)__ latest earnings were a mixed bag. Sales were sweet: McD’s global revenue reached $23B last year, the highest in six years. Fun fact: Big Mac, McNuggets, and fries were 60% of total sales. Profits were sour: wage hikes + higher prices on everything from patties to paper bags ate into the bottom line. In 2021 McD’s hiked menu prices by 6%. Indulging in McDonald’s could get even pricier this year as the company expects ingredient prices to [*double*](https://www.wsj.com/articles/mcdonalds-sales-lifted-by-higher-prices-sandwich-campaigns-11643284802).

__Smooth like buttered McMuffin…__ Fast-food chains saw mid-pandemic sales jumps as cooped-up consumers hit drive-thrus to satisfy comfort cravings. McD’s pulled in record sales last quarter thanks to strong demand for Crispy Chicken Sandwiches and the newly revived McRib. But its secret sauce is tapping into consumer trends: 

- __Celeb-inspired meals__ from stars like Saweetie, Travis Scott, and BTS have driven sales growth for McD’s. In South Korea, nugget sales tripled after the BTS meal [dropped](https://www.nme.com/news/music/bts-meal-sales-of-mcnuggets-to-jump-by-250-per-cent-in-korea-2977171).
- __Tok trends:__ This month, McDonald’s took a cue from __TikTok__ foodies by rolling out social-inspired “menu hacks.” Now, customers can order the Surf + Turf (Filet-O-Fish meets double cheeseburger) by name.
- __Digi-dominance:__ More than a quarter of all [sales](https://www.fool.com/earnings/call-transcripts/2021/10/27/mcdonalds-corporation-mcd-q3-2021-earnings-call-tr/) in McDonald’s top six markets came from its app, delivery, or touch-screen kiosks.

Saweet

__Customers are the best creators…__ From McD’s hack-inspired items to __[Starbucks’](https://robinhood.com/stocks/SBUX)__ “secret menu” lattes, fast-casual brands are leaning on social trends to determine their strategy. Even TikTok hopped on the bandwagon by launching a ghost-kitchen delivery service for viral meals. Fast-food brands are increasingly tuned into social ([see](https://www.today.com/food/trends/wendys-roasts-people-brands-twitter-thread-rcna12076): __[Wendy’s](https://robinhood.com/stocks/WEN)__ __[Twitter](https://robinhood.com/stocks/TWTR)__ vs. Everyone), since they can skip focus groups by getting insights directly from customers.

McDonald’s cashes in on trendy menus as pricey ingredients and wage hikes hurt profits

[Eric Thayer / Stringer via GettyImages]

Naomi Osaka broke her own record for annual earnings for a female athlete, raking in over $57M last year

🍎 Apple’s biggest quarter ever

__Still leading the charge…__ for now. __[Tesla](https://robinhood.com/stocks/TSLA)__ rolled up with earnings yesterday, announcing that profits 9X’d last quarter from a year earlier. Tesla had said earlier this month that its car deliveries nearly [doubled](https://snacks.robinhood.com/newsletters/4JaJC0FkdGD5qt6zW5UWxa/articles/6g5fbLZOViIV6i968tWbF8/) in 2021 to almost 1M. Still, the stock dipped yesterday after Tesla [warned](https://www.cnbc.com/2022/01/26/tesla-tsla-earnings-q4-2021.html) of ongoing production challenges. Investors also have their eye on competition, which is heating up:

- Tesla’s EV market share dropped from 80% to 66% last year as __[GM](https://robinhood.com/stocks/GM)__, __[Ford](https://robinhood.com/stocks/F)__, and __[Volkswagen](https://robinhood.com/stocks/VWAGY)__ increased EV sales. Analysts expect VW to sell more EVs than Tesla by 2025, but also predict Tesla’s profits will still be higher.

__Elon time coming…__ Last year, Tesla dodged chip-shortage challenges that plagued rivals like GM by diversifying suppliers, making its own parts, and even removing parts from some models. But yesterday Tesla said supply problems are now its “main limiting factor.” 

- __Stuck:__ Tesla was supposed to start pumping out Cybertrucks last year, but earlier this month postponed the ETA to 2023, citing supply issues. 
- __Unstuck:__ EV rival __[Rivian](https://robinhood.com/stocks/RIVN)__ has already started delivering its electric trucks, and Ford’s electric F-150s are expected to hit roads this year.

Cybertruck’s Instagram vs. reality [Winslow Productions via Getty Images]

Truckin’

__Tesla’s supercharged valuation “scale power”...__ and Cybertruck’s traffic jam prove that scaling isn’t always easy. Tesla became more valuable than its five largest competitors combined by creating demand for electric cars — and making its own seem more like caviar than granola. But to *continue* succeeding it needs to scale production to match rivals like __[Toyota](https://robinhood.com/stocks/TM)__ and VW, which crank out 10X as many cars annually. To that end, Tesla plans to open new Giga-factories this year in Texas and Germany. But VW, Ford, GM, and __[Lucid](https://robinhood.com/stocks/LCID)__ also plan to invest $20B+ in US EV plants in the next few years.

Tesla’s profits 9X’d last quarter, but supply issues are catching up with the electric disruptor

__Elsa’s back in her castle…__ but not in Arendelle. Six years ago, __[Mattel](https://robinhood.com/stocks/MAT)__ lost the rights to make and sell __[Disney](https://robinhood.com/stocks/DIS)__ princess dolls to rival __[Hasbro](https://robinhood.com/stocks/HAS)__ (aka: America’s #1 toymaker). Yesterday, Mattel finally got the lucrative princesses back — and Mattel shares spiked as [much](https://robinhood.com/stocks/MAT) as 11% on the announcement. But winning back Jasmine, Ariel, and Moana was no royal carriage ride:

- __A whole new world:__ Mattel’s princess partnership started in 1996 and quickly became a profit puppy, especially after the addition of Frozen’s Elsa in 2013. 
- __Frozen out:__ Mattel sold $440M [worth](https://www.forbes.com/sites/carlieporterfield/2022/01/26/mattel-shares-jump-after-it-recoups-disney-princess-toy-rights-from-rival-hasbro/?sh=7423048157fc) of Disney princesses in 2015. Then, a year later, it lost them (#LetItGo). Since then, Mattel has changed CEOs four times. 

__Barbie’s dream makeover…__ After losing its profit princesses, Mattel doubled down on its Barbie biz, which was struggling from a sales slump. With the revamp came new, more diverse dolls (think: different skin tones, hair styles, and body types). It worked: Last year, Barbie sales jumped 87% in the first quarter, and it was [named](https://www.toyassociation.org/toys/events/toy-of-the-year-awards-home.aspx?New_ContentCollectionOrganizerCommon=4) “Doll of the Year.” After witnessing Barbie’s comeback, Disney is putting Mattel in charge of its princesses once again.

Frozen

__Intellectual > property...__ Intellectual property can be worth more than the property itself, which is why Disney enjoys having *others* turn its characters into toys — for a big licensing fee. Disney loves being courted for its IP: The mouse controls which toys get bought through its movies, so the characters matter more than the plastic. That’s why Hasbro’s slice of the Disney pie also includes rights to “Star Wars” (see: Baby Yoda toy) and soon “Indiana Jones.” Meanwhile, Mattel [has](https://corporate.mattel.com/en-us/brand-portfolio) Disney’s “Toy Story” and “Pixar Cars.”

Mattel wins back the right to make Disney princess dolls, in a deal that shows intellectual property is queen

Tesla’s profits jumped 9X last quarter, but supply issues are catching up

[Smith Collection/Gado / Contributor via Getty Images]

6 people are hired every minute through LinkedIn — and applicants with profile pics get 21X as many views as those with gray silhouettes

🛻 Tesla’s truck trouble

__“The Joe Rogan Experience”...__ just got more complicated. JRE is the world's largest podcast, with an [estimated](https://www.rollingstone.com/culture/culture-news/covid-misinformation-joe-rogan-spotify-petition-1282240/) 11M listeners *per episode*. In 2020, __[Spotify](https://robinhood.com/stocks/SPOT)__ signed a deal to make the pod Spotify-exclusive for a reported $100M. Now, a viral December episode is drawing fresh criticism:

- __The guest:__ Rogan interviewed Dr. Robert Malone, a virologist who worked on early mRNA research. Malone is now a Covid vaccine critic, and was __[Twitter](https://robinhood.com/stocks/TWTR)__-banned for posting misinfo.
- __The episode:__ Malone promoted baseless conspiracy theories — from claiming hospitals have financial incentives to diagnose deaths as Covid-related to saying that getting vaxxed is riskier for people who've had Covid.
- __The backlash:__ 270 medical experts [signed](https://www.rollingstone.com/culture/culture-news/covid-misinformation-joe-rogan-spotify-petition-1282240/) a letter asking Spotify to curb misinfo on its platform, citing the Malone episode. On Monday, singer Neil Young [demanded](https://www.rollingstone.com/music/music-news/neil-young-demands-spotify-remove-music-vaccine-disinformation-1290020/) that Spotify remove all his music — or remove JRE.

__I’m a pod-star, not a doctor...__ Rogan has [said](https://www.bbc.com/news/world-us-canada-56948665) he is not anti-vax, and that he encourages "many" people to get vaccinated, but this [isn't](https://www.bbc.com/news/world-us-canada-56948665) the first time he's been criticized for Covid misinfo. Spotify has removed thousands of episodes containing Covid misinfo in the past. It has also reportedly [removed](https://www.digitalmusicnews.com/2021/04/06/joe-rogan-spotify-removing-shows/) 42 JRE episodes, including ones featuring far-right activists — but none related to vaccines. As its pod business booms, critics want clearer moderation policies.

- __$1B+:__ How much Spotify has splurged on pod-related purchases. Including: The Ringer and Parcast — *plus*, exclusives like “Call Her Daddy.” Targeted pod ads make up a growing share of Spotify’s [$2.5B](https://s22.q4cdn.com/540910603/files/doc_financials/2021/q3/Shareholder-Letter-Q3-2021_FINAL.pdf) quarterly revenue.
- __#1:__ In October, Spotify [overtook](https://appleinsider.com/articles/21/10/28/spotify-says-it-recently-passed-apple-as-top-us-podcast-platform) __[Apple](https://robinhood.com/stocks/AAPL)__ as the US's biggest pod platform, largely thanks to its "gated garden" strategy.

Spotify planting pods in its “Gated Garden” [Kjell Linder via Getty Images]

__With great publishing power comes great responsibility…__ The calls to action were broader than JRE — they were directed at Spotify’s moderation policies (or lack thereof). Unlike many large platforms, Spotify doesn't appear to have a defined misinformation policy, or at least one that’s consistently enforced. Yet moderation will likely become a growing issue for Spotify as its business grows — just as it is for other social and streaming giants. 

Joe Rogan’s Spotify pod sparks backlash from doctors and Neil Young, as moderation takes center stage

__From “Shark Tank” to the aspirin aisle…__ Celeb investor Mark Cuban [launched](https://www.npr.org/2022/01/24/1075344246/mark-cuban-pharmacy) an online pharmacy designed to lower prices of 100 generic drugs. The __Cost Plus Drug Co.__ aims to simplify healthcare’s complex biz model by cutting out intermediaries and selling drugs for wholesale prices — plus a fixed 15% markup. 

- __Drug prices are often shockingly high__ because of complex negotiations between drugmakers, pharmacies, and health insurers. 
- __CP buys drugs wholesale__ and breaks down their costs on its website. Think: ingredients = $12, manufacturing = $3, profit = $2.10. Thirty pills of a life-saving drug could cost $2.5K at __[CVS](https://robinhood.com/stocks/CVS)__ — but $17 at CP.
- __CP doesn’t accept insurance,__ but it could be a huge help for the 31M Americans without insurance.

__Rattling big pill bottles…__ Nearly 80% of US prescriptions are managed by CVS, __[Cigna](https://robinhood.com/stocks/CI)__, and __[UnitedHealth](https://robinhood.com/stocks/UNH)__. Critics [say](https://stories.usatodaynetwork.com/sideeffects/censored-analysis-confirms-complaints-pharmacy-benefit-managers/) pharmacy heavyweights use complex clauses to drive up prices, and regulators are investigating the industry. Several companies are trying to fix healthcare’s pricing problem:

- __Large employers__ like __[Walmart](https://robinhood.com/stocks/WMT)__, __[Boeing](https://robinhood.com/stocks/BA)__, __[Apple](https://robinhood.com/stocks/AAPL)__, and __[Microsoft](https://robinhood.com/stocks/MSFT)__ formed a healthcare group last year to ditch big pharmacies and save money. 
- __Health startups__ including __Capsule__, __Roman__, __[Hims & Hers](https://robinhood.com/stocks/HIMS)__, and __[GoodRx](https://robinhood.com/stocks/GDRX)__ also offer transparent drug marketplaces that challenge traditional pharmacies.

Pills

__Price matters, but so does transparency…__ That’s why companies are pursuing more transparent alternatives to traditional pharma. Cost Plus can’t *fully* replace pharmacy behemoths (it only sells generic drugs) and its prices may not be lower than competitors’. But CP is building a Texas factory to make its own meds. And if it steals sales from juggernauts like CVS, it could help push the whole industry to become more transparent.

Mark Cuban’s Cost Plus wants to make prescription drugs more affordable and transparent

Doctors (and Neil Young) call on Spotify to moderate misinfo after a viral Joe Rogan pod

[picture alliance / Contributor via Getty Images]

95% of workers want to set their own hours, while 78% want location flexibility 

🎤 Joe Rogan’s Spoti-fiasco

__Going 50 in a 30…__ Forget the free cold brew. Safe drivers can now [earn](https://www.wsj.com/articles/allstate-and-hancock-seek-careful-drivers-with-healthy-diets-11643032803?mod=lead_feature_below_a_pos1) discounts at __[Starbucks](https://robinhood.com/stocks/SBUX)__ through a data-sharing deal between life insurer __John Hancock__ and car insurer __[Allstate](https://robinhood.com/stocks/ALL)__. Hancock customers *already* earn discounts on life insurance, Starbucks lattes, and __[Amazon](https://robinhood.com/stocks/AMZN)__ Prime subs for making healthy lifestyle choices. Think: getting 10K steps in or eating kale. Now they’ll also get perks for driving safely.

- __Different datasets:__ Hancock uses health data from __[Apple](https://robinhood.com/stocks/AAPL)__ Watches and __[Fitbits](https://robinhood.com/stocks/FIT)__ to inform life-insurance prices, and Allstate uses driving data from GPS systems to help set car-insurance prices. 
- __But safer drivers don’t just crash less…__ they also *live* longer. That’s why Hancock is incentivizing its life-insurance customers to enroll in Allstate’s tracking program to earn rewards for not speeding.
- __Win-win:__ Both insurers hope to gain access to each other’s customers by giving them more ways to earn rewards. 

__Surveillan-surance…__ is becoming more popular as data collection gets easier. In 2018, Hancock became one of the first major US life insurers to use personal health data to set *all* its prices. Today many insurers like __United Healthcare__, __[Oscar Health](https://robinhood.com/stocks/OSCR)__, and __[CVS](https://robinhood.com/stocks/CVS)__-owned __Aetna__ also use interactive systems to track and reward customers for risk-reducing behaviors. Like: jogging or getting a mammogram. 

[Westend61 via GettyImages]

Grande

__There’s a trade-off between savings and privacy…__ Data-tracking programs let Hancock customers save money on insurance premiums *and* lattes. But those savings come at a cost — in some cases nearly constant surveillance. Critics of data-driven-pricing programs [worry](https://www.ama-assn.org/practice-management/digital/insurers-want-patients-use-wearables-could-be-problem) they could be problematic for other insurers too. Think: health insurers denying coverage to people with preexisting conditions. As connected devices increase, so will the prevalence of consumer data.

Insurance giants offer perks like Starbucks discounts and Prime subs for safe driving

__Welcome to Taco B-school...__ where an MBA comes with a CGC (Cheesy Gordita Crunch). Taco Bell is [launching](https://www.marketwatch.com/story/taco-bell-launching-a-business-school-for-prospective-franchisees-11642597289?mod=mw_latestnews) a business school for aspiring franchisees in partnership with the University of Louisville. The six-week boot camp will train existing Taco Bell managers on financing, HR, marketing, and other topics related to running a business. TB employees who are accepted will receive scholarships to cover tuition, plus some enviable Taco B-school [swag](https://www.marketwatch.com/story/taco-bell-launching-a-business-school-for-prospective-franchisees-11642597289?mod=mw_latestnews).

- __Most of Taco Bell's 7K locations__ are [franchised](https://www.franchise500.com/article/363039), aka: owned by ordinary people or orgs. Taco Bell sells the rights to use its brand (as long as the gorditas are crunchy, no one knows who owns it). Franchise owners give TB a cut of their sales. 
- The new program will be supported through the Yum Center for Global Franchise Excellence, which aims to unlock opportunities for underrepresented communities through education on the business of franchising. 
- __KenTacoHut:__ TB's parent, __[Yum Brands](https://robinhood.com/stocks/YUM)__, also owns KFC and Pizza Hut. Yum shares are up 18% over the past year as drive-thrus + fried foods = pandemic comfort.

__Taco baseball cap...__ T-Bell isn't the only chain to start a school for employees: __[McDonald's](https://robinhood.com/stocks/MCD)__ Hamburger University has been [training](https://www.foxbusiness.com/lifestyle/taco-bell-business-school-franchise-owners) managers and franchisees for 60 years, and California staple __In-N-Out__ [runs](https://www.mashed.com/136239/fast-food-hamburgers-ranked-worst-to-best/) a university for new managers.

- While fast-food jobs are often seen as stepping-stones to other careers, TB wants to show restaurant leaders “how their careers could flourish” at Taco Bell.

Auditioning to be the Taco Bell Business School mascot [Patricia Marroquin/Moment via Getty Images]

Crunch

__There’s nothing tastier than retention…__ because *internal* marketing has never been more important. The Great Resignation is real: US job openings soared during the pandemic as workers quit for greener pastures, while employers dangled wage hikes and benefits like free college tuition to attract flighty labor. The restaurant industry still hasn’t recovered the [650K](https://www.cnbc.com/2022/01/24/national-restaurant-association-asks-congress-for-aid-amid-omicron.html) jobs lost early in the pandemic. Benefits like educational development could be the difference between shuttered chains and a thriving business. 

Taco Bell opens a business school, because the most in-demand ingredient is retention

Insurance giants offer Starbucks and Prime perks for safe driving

Financial aid is so complex that US college grads left behind $3.75B in free aid in 2021

☕ Starbucks as an insurance perk

__Color of the week: red...__ We're not talking lipstick. Last week the __[Nasdaq](https://learn.robinhood.com/articles/1GXPrecRfkSNp0aBblBSsL/what-is-the-nasdaq/)__ index entered [correction](https://learn.robinhood.com/articles/5Ox6TeuJAgvthA6NbsWmu0/what-is-a-correction/) territory — a drop of 10% or more from the most recent high — for the first time since March. The Nasdaq is the techiest of the Big Three US indexes.

- __Big Tech:__ [More than half](https://www.investopedia.com/terms/n/nasdaqcompositeindex.asp) of the Nasdaq’s 3K+ stocks are tech. After gaining 22% last year, it's down *13%* from its November record (#corrected).
- __Big *Red*:__ 40% of Nasdaq stocks have [fallen by half](https://www.wsj.com/articles/global-stock-markets-dow-update-01-19-2022-11642581538?st=3cy88re685iu59a&reflink=desktopwebshare_twitter) since November.

__Some ingredients…__ of the tech sell-off: Most are related to *inflation*, which is nearly at a [40-year](https://www.latimes.com/business/story/2022-01-12/consumer-prices-soared-past-year) high as demand > supply. To tame rising prices, the Fed is expected to hike rates at least [three](https://www.cnbc.com/2022/01/10/goldman-predicts-the-fed-while-hike-rates-four-times-this-year-more-than-previously-expected.html#:~:text=The%20Wall%20Street%20firm's%20chief,of%20just%20a%20month%20ago.) times this year. The problem for tech stocks: They’re “competing” with other investments.

- __Rising interest rates__ can make US gov’t bonds and savings accounts *more attractive* compared to riskier assets like tech stocks. 
- __Wall Street tends to value stocks__ based on their potential *future* returns (key word: future). But $1 today is worth more than $1 tomorrow because… inflation. 
- __As interest rates rise,__ the value of a dollar *today* also rises because it could be invested ASAP in bonds or savings with higher returns. But the prices of many high-flying tech stocks are based on potential growth. That’s one reason __[Tesla’s](https://robinhood.com/stocks/TSLA)__ worth 12X as much as __[GM](https://robinhood.com/stocks/GM)__, despite having only a quarter of its sales. 
- __Opportunity cost:__ As the potential returns from lower-risk investments (like US gov’t bonds) rises, investors want to see higher returns from tech to justify prices.

__The TLDR…__ Tech shares soared as the Fed gave us near-zero rates during the pandemic, since *any* potential growth seemed better than zero interest. Now that rates are rising, tech is rebalancing. The Dow — which is heavier on non-tech stocks with lower expectations of fast growth — is barely down.

[Mario Tama / Staff via Getty Images]

__Corrections are normal…__ While they might be painful short term, corrections can help rebalance overvalued stocks. They can hit assets, indexes, or entire markets. Tech stocks felt frothy at their November peak (a correction is like a barista skimming off foam). And we’ve been here before: The Nasdaq has had [66](https://www.marketwatch.com/story/nasdaq-composite-has-logged-65-corrections-since-1971-and-as-it-heads-for-66-heres-how-the-stock-index-tends-to-perform-afterward-11642623639) corrections since 1971, but is still up nearly 7,400% over the past 40 years.

Tech stocks’ big plunge: How latte prices and Fed rates help explain the “correction”

__Anti-antitrust...__ Big Tech is [fighting](https://www.wsj.com/articles/senate-panel-approves-antitrust-bill-restricting-big-tech-platforms-11642701487) for its platform power. Last week a Senate panel approved an “Innovation and Choice” bill that would force __[Amazon](https://robinhood.com/stocks/AMZN)__, __[Google](https://robinhood.com/stocks/GOOGL)__, __[Meta](https://robinhood.com/stocks/FB)__, and __[Apple](https://robinhood.com/stocks/AAPL)__ to stop favoring their products over competitors’. Think: Amazon putting its Basics at the top of search results. Smaller techies like __[Yelp](https://robinhood.com/stocks/YELP)__ and __[Sonos](https://robinhood.com/stocks/SONO)__ support the regulation, which they say will boost competition. The bill is moving on to a final vote, but analysts say it’s unlikely to pass before midterms, when Dems could lose the numbers needed to clear it. 

__Boom times for the YOLO-conomy...__ While pandemic powerhouses struggle (cough, Peloton), shares of __Prada__, __[Burberry](https://robinhood.com/stocks/BURBY)__, and __[Richemont](https://robinhood.com/stocks/CFRUY)__ [spiked](https://www.theguardian.com/business/2022/jan/19/burberry-predicts-35-rise-in-annual-profits-backed-by-asia-sales) last week after the luxury retailers reported strong demand for designer goods like chic puffy jackets and diamonds. Sales have actually exceeded pre-pandemic levels for several companies, despite travel restrictions and soaring prices, which wealthy consumers are less sensitive to. As younger spenders treat themselves to Valentino instead of vacays, luxury brands expect profits to keep rising.

__Everyone wants BinaxNow…__ *now*. __[Abbott Labs’](https://robinhood.com/stocks/ABT)__ at-home Covid test accounts for 75% of US test sales, but good luck finding one. Test makers Abbott, __[Roche](https://robinhood.com/stocks/RHHBY)__, and __[Becton Dickinson](https://robinhood.com/stocks/BDX)__ saw [massive](https://www.cbsnews.com/news/covid-19-tests-provider-profit/) profits last year as we left the couch. But when cases fell this summer, Abbott laid off workers and closed factories, which led to test shortages. As Omicron surges, Abbott’s revving up production. Biden is paying the company $2B to provide nearly half of the free Covid tests Americans have started ordering. We’ll see how Omicron affected profits when Abbott reports on Wednesday.

__Cybertruck is cyber-stuck...__ Tesla rolls up with earnings Wednesday, and competition is more electric than ever. Tesla has reportedly [pushed](https://www.reuters.com/technology/exclusive-tesla-delays-initial-production-cybertruck-early-2023-source-2022-01-13/) back production of its much-hyped electric Cybertruck to 2023. Meanwhile, rival EV maker __[Rivian](https://robinhood.com/stocks/RIVN)__ is already delivering trucks, and __[Ford](https://robinhood.com/stocks/F)__ plans to drop electric F-150s on driveways this spring. Still, Tesla’s car deliveries [doubled](https://snacks.robinhood.com/newsletters/4JaJC0FkdGD5qt6zW5UWxa/articles/6g5fbLZOViIV6i968tWbF8/) last year from 2020 and its solar-power biz turned profitable. But Tesla’s facing heavy regulatory scrutiny, while a Tesla driver is facing felony charges after a fatal crash involving Autopilot.

- __[Spinout](https://snacks.robinhood.com/newsletters/2aaB9GnrWgVHhjJd7bFJu/articles/1cvFtVr0b2fj1m1iC9AgUW/):__ __[Peloton](https://robinhood.com/stocks/PTON)__ shares plunged after a CNBC report said the company was pausing production of its bikes and treadmills. Pelo-demand fizzled last quarter after a pandemic boom, and store closures and layoffs could follow.
- __[#Influence](https://snacks.robinhood.com/newsletters/2aaB9GnrWgVHhjJd7bFJu/articles/2UWDolcoaAHhja6kAnJxsL/):__ Instagram and __TikTok__ rolled out paid subscription tools for creators ranging in price from $1 to $100/month, in a bid to lure top influencers and their followers from rivals.
- __[Gamed](https://snacks.robinhood.com/newsletters/4eOJialeY3vTs2AHV0FkZt/articles/5Tuqimhcf73WVRvJ5YTv5C):__ __[Microsoft](https://robinhood.com/stocks/MSFT)__ made a bid to buy Candy Crush maker __[Activision Blizzard](https://robinhood.com/stocks/ATVI)__ for $70B in the largest cash acquisition ever — it would cement gaming’s crucial role in Microsoft’s metaverse plans.

Last week's highlights...

Calculating the value of a future latte [JGI/Jamie Grill via Getty Images]

The 200 most popular songs last year accounted for just 5% of total streams, as Gen Z discovers retro hits from Fleetwood Mac and Creedence Clearwater Revival on TikTok

🔻 Tech’s big drop, unpacked

__Worse than a fake death on “Sex and the City”...__ Mr. Big news: __[Peloton](https://robinhood.com/stocks/PTON)__ is temporarily halting production of its spin bikes and treadmills, [CNBC](https://www.cnbc.com/2022/01/20/peloton-to-pause-production-of-its-bikes-treadmills-as-demand-wanes.html) reports. In a confidential presentation, Peloton reportedly said that demand for its connected fitness equipment has faced a “significant reduction” since mid-pandemic. Picture: thousands of unsold bikes and treads sitting in storage depots. 

- __Peloton stock tanked 24% yesterday__ to below its IPO price, and was temporarily halted for trading. Shares have lost 70% of their value since November. 
- __Peloton plans to pause bike production__ for two months and treadmill production for six weeks. The pricier "+" versions of each will be paused *even longer*.
- __Last year,__ Peloton majorly [fumbled](https://snacks.robinhood.com/newsletters/4yW1t7ZAlpeTEKYaBK3zSe/articles/4Hhp3uBfBZdGd5inbOOgxo/) its response to demands to recall its Tread+ after thousands of injuries and one death. It belatedly issued a recall in August.

__Pre-[Zoom](https://robinhood.com/stocks/ZM) Beyoncé ride...__ Early in the pandemic, people rushed to snap up Peloton’s $2K bikes and $4K treadmills. Sales nearly tripled, subscriptions more than doubled, and it even turned a profit. But since all that demand was "pulled forward" and IRL workouts have returned, Peloton's growth has dramatically slowed. It *lost* $376M last quarter, and the new year is off to an even rougher start…

- __1st:__ CNBC [reported](https://www.cnbc.com/2022/01/19/peloton-insiders-sold-nearly-500-million-in-stock-before-its-big-drop-.html) that Peloton hired __McKinsey__ to consult on its cost structure, which could translate to layoffs and store closures. It has reportedly started cutting jobs already. 
- __2nd:__ SEC filings [showed](https://www.cnbc.com/2022/01/19/peloton-insiders-sold-nearly-500-million-in-stock-before-its-big-drop-.html) that Peloton insiders sold ~$500M worth of shares before the stock plunged earlier this week.


[SOPA Images / Contributor via Getty Images]

Sweat

__Too much optimism can be dangerous…__ Peloton’s growth forecasts for this year were *way off*. It seriously underestimated the possibility of a drop in demand. As the poster child of pandemic thrivers, Peloton had months-long shipping delays because orders were so strong. Now it has the opposite problem: so much unsold inventory that it could start a warehouse Equinox. 

Peloton pauses production of its fitness equipment as unsold bikes and treadmills pile up

__Like, share, subscribe…__ The influencer's Triple Crown. This week __Instagram__ and __TikTok__ began [testing](https://techcrunch.com/2022/01/19/instagram-launches-early-test-of-creator-subscriptions-in-the-u-s/) tools that allow creators to offer paid subscriptions. Both are hoping to drive more traffic to their apps. TikTok didn’t share details about its subscription, but here’s what we know about Insta’s:

- __Only 10 creators__ were invited to test the feature, including Olympic gymnast @jordanchiles (431K followers) and spiritual coach @bunnymichael (216K followers). 
- __Creators can charge__ anywhere from $1 to $100 for access to subscriber-only content and special badges that help fans stand out in crowded comment sections.
- __Insta is *not* taking a cut__ of creator earnings — yet. But it plans to expand the program to all creators in coming months, and may start “sharing” revenue in 2023.

__Liked Jason Derulo’s TikTok…__ and his Reel, *and* his __[Snap](https://robinhood.com/stocks/SNAP)__ story. Social giants are competing with new features to court top creators, whose millions of followers drive massive engagement. By attracting influencers with paid subscriptions, social platforms hope to win over *their* followers.

- __Instagram__, __TikTok__, and __Snapchat__ have between 38M and 45M users each, and that gap is expected to narrow to *about 1M* users by 2025.
- __Social platforms__ have spent billions on “creator funds” to attract top talent, and the growing creator economy is worth $100B+.
- __Meanwhile, creator-focused platforms__ like __Clubhouse__, __Patreon__, __Cameo__, and __OnlyFans__ boomed during the pandemic by connecting creators directly to fans.

Fluffy only meets subscribers [Westend61 via Getty Images]

Superfan

__Influencers are influencing tech companies…__ Creators have more leverage than ever before. Social companies initially focused on user growth, not creators. But now that the market is saturated and they’re competing for the same users, keeping top talent is key to engagement. And engagement is key to social’s profit puppy: ads. 

Insta and TikTok roll out creator subscriptions — because influencers are their competitive advantage

🚴 Peloton halts production of its fitness equipment as bikes and treadmills pile up 

More homes were sold in the US last year than any year since 2006