As vaccination hopes caused a flurry on Wall Street this week, Facebook and Spotify made moves that could redefine their futures as businesses
The Quick Fix
#VaccinationInvesting — Wall Street had a strong rally this week after Moderna (NASDAQ: MRNA) reported optimistic results of its phase one vaccine trials.
#AddMeToFacebook — Mere days after announcing a $400 million takeover of Giphy, Facebook (NASDAQ: FB) revealed its latest foray into e-commerce with its new ‘Shop’ feature.
#NotYourAverageJoe — In a bid to take control of the world of podcasting, Spotify (NYSE: SPOT) has put $100 million on the table for ‘The Joe Rogan Experience’.
#StartLuckinElsewhere — After months of speculation surrounding Luckin Coffee (NASDAQ: LK) following fraud allegations, the company is getting delisted from the Nasdaq.
#AndFinally — As if things weren’t bad enough for Disney (NYSE: DIS), Gen-Z’er TikTok has gone and stolen the boomer stock’s Head of Streaming.
Monday was a good day for Wall Street as investors rallied off of the news of Moderna’s promising vaccination trial.
Didn’t Gilead also have a promising drug?
A few weeks ago, the market also rallied off of the news that Gilead’s (NASDAQ: GILD) remdesivir drug could help treat those already infected with coronavirus, not prevent it. Moderna’s vaccine, on the other hand, made heavy hearts soar this week, giving hope of a return to normal (if we can remember what normal is). The company reported “positive” phase one results for a coronavirus vaccine, stating that after two doses, all 45 trial participants had developed coronavirus antibodies. It is too early to tell if this is the finished product, with many vaccine experts warning that the company’s report should be taken with a pinch of salt. However, investors found reason to be optimistic elsewhere as U.S. businesses began to reopen this week, with many restaurants and gyms offering limited capacity service. Considering how quickly the economy ground to a halt in recent months, it seems almost assured that economic and earnings reports are headed for a period of improvement.
Bet you didn’t know
A recent Facebook survey revealed that only 45% of small and medium-sized businesses said they would rehire the same people once they reopen.
Mark Zuckerberg is having a great week: He acquired Giphy, he’s taking on Amazon (NASDAQ: AMZN), and Facebook just hit an all-time high.
Why is everything coming up Zuck’s?
Last Friday it was announced that Facebook had acquired Giphy for $400 million, meaning my favorite activity on Slack (NYSE: WORK) (sending GIFs and not doing any real work) could soon change forever. The good times kept coming though, as Zuckerberg announced on Tuesday that Facebook would make its biggest push yet into e-commerce with the launch of its ‘Shops’ feature, causing its stock to hit a new all-time high on Wednesday. This free-to-use platform will help small businesses set up a single digital storefront that will be available to customers on both Facebook and Instagram, with Zucks & Co. taking a small cut of credit card transactions as well as gaining access to a myriad of sales data. This move pits Facebook firmly against Amazon at a time where e-commerce is reigning supreme on Wall Street and social media sites struggle with declining ad revenue. With Facebook’s almost 3 billion monthly active users — that’s roughly 40% of the planet — Zuckerberg could potentially be building the world’s largest e-commerce platform. God help us all.
Bet you didn’t know
While roughly 206 million people visit Amazon every month, almost 1.62 billion users access Facebook EVERY DAY.
Spotify has taken the young realm of podcasting by the horns and signed an exclusive deal with one of the most popular shows on the planet: ‘The Joe Rogan Experience’.
What’s Spotify’s Endgame?
It’s easy to forget that Spotify has also been killing it during this pandemic, much like other streaming platforms such as Netflix (NASDAQ: NFLX). And now it seems that it’s been doing so well that it can splash out a reported $100 million on Joe Rogan’s popular podcast. For a company that is frequently accused of not paying music artists enough, it seems an unusual move. However, by pulling off an exclusive deal for a podcast which regularly exceeds 200 million downloads, Spotify is taking one step closer to becoming a one-stop-shop for podcast listeners in a very fragmented industry. Despite being exclusive to Spotify, non-premium subscribers will also be able to listen to the podcast, which will only increase usage on the platform and lead to greater ad revenue for the streamer. Spotify’s main competitors, Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOG), appear to have no interest in competing in this field, despite Apple holding the world’s largest collection of podcasts. It looks like Spotify has a clear runway to corner the ad-heavy market of podcasting. For now…
Bet you didn’t know
As of January 2020, there are over 3 billion playlists on Spotify, and I still haven’t found one that I actually like.
Coffee beans weren’t the only things that got roasted on Wednesday as the beleaguered Chinese chain was handed a delisting notice from the Nasdaq.
What will happen to Luckin shares?
Back in March, Luckin Coffee was accused of fabricating transactions totaling about $310 million and trading was halted pending an investigation. Since then, Luckin has terminated its top executives, including former Chief Executive Jenny Zhiya Qian, with trading finally reopened on Wednesday after a month-long closure. However, the stock immediately fell close to 40% after the company was hit with its delisting notice. Typically, this process can still take 30-45 days before it is implemented, at which point Luckin Coffee will no longer have a home on the Nasdaq, which cited ‘public interest concerns’ as its reason for its ruling. Investors will still be free to trade in the security, but good luck finding a willing buyer for Luckin Coffee these days. Once valued at $12.7 billion and touted as ‘the Chinese Starbucks’, Luckin Coffee’s market cap has sunk as low as $715 million. Though the disgraced coffee chain is expected to appeal the Nasdaq’s decision, it’s hard to see any way back.
Bet you didn’t know
Luckin Coffee reportedly had 4,507 stores in China at the beginning of 2020, compared to Starbucks’ (NASDAQ: SBUX) 4,300.
These days, the only people who haven’t heard of TikTok are hermits and liars. The Chinese video-sharing and social networking service has infected all corners of humanity. Just last month, my own parents shared a TikTok video they had made that included a cringeworthy rendition of the ‘Blinding Lights’ challenge (Google it) and it took all my strength not to simply give it an ‘OK boomer’ response. Aside from traumatising millennials, TikTok has actually been poaching quality leadership too, this week nabbing Kevin Mayer as its new Chief Executive. Mayer was previously head of streaming at Disney and spearheaded the Disney+ launch, one of the company’s few successes so far in 2020. However, I can’t give him too much credit, as he is also partly responsible for Disney’s 2012 acquisition of Lucasfilm. While arguably an incredible business deal, I cannot forgive what Disney did to the beloved franchise.
Why did Mayer leave?
Mayer was a pretty important dude and widely considered one of the top candidates to replace Bob Iger as CEO. Perhaps that passing over drove him to abandon a company he pertains to ‘love and admire’. He will have a hard time of it at TikTok though, a ByteDance-owned Chinese firm that has received severe scrutiny from U.S. officials over privacy concerns.
Bet you didn’t know
Since 2009, Disney has spent more than $8 billion on the acquisitions of Marvel and Lucasfilm (both spearheaded by Mayer) and has recuperated roughly $35 billion in the box office from the two franchises since.
The Week In Numbers
is how much April’s carbon emission levels dropped year-on-year according to recent studies, due to a reduction in airline and auto travel.
in fiscal Q4 revenue was reported by gaming giant Take-Two Interactive (NYSE: TTWO), smashing expectations of $582.22 million.
in revenue was reported by Walmart (NYSE: WMT) at its Q1 earnings on Tuesday.
MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.