Airspace theater
Unemployment spikes, Snapchat moves, and media is hot.
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Market summary: 📊
Choppy Monday session in India but investors eventually closed books in the green. US had a solid day with growth tech seeing strong momentum for a change.
US:
S&P 500 - up 0.99%
Nasdaq - up 1.72%
India:
Nifty 50 - up 0.15%
Sensex - up 0.22%
What’s brewing hot? ☕
✅ dem hacks, they sting—IT company SITA, which runs booking operations and other IT services for nearly 90% of the world’s airlines, had reported a data breach about 3 months ago. People are realizing the gravity of the situation now when AirIndia disclosed that personal information of nearly 4.5 million of its passengers may have leaked, including names, birth dates, contact, and passport information. No clue if any financial information was lost, but that’s the 6th large scale Indian company to suffer a data breach this year, as global corporations struggle to fight the cybersecurity menace.
✅ Season of luxury—buildin’ spaceships and electric vehicles isn’t the only way to be the richest man on the planet in 2021—luxury clothing and fancy bags is just fine too! French billionaire Bernard Arnault briefly overtook Bezos to become the richest man in the world with $186 billion to his name, courtesy “back to normal” stocks catching wind in the markets right now, as ecommerce and other pandemic favorites go out of favor. Arnault owns LVMH, the largest luxury goods players in the world, which owns Louis Vitton, Tiffany, Dior, Gucci, Sephora and 70+ other brands we’d struggle to pronounce the names of!
Airspace drama takes over Europe ✈️
What happened—an airliner carrying common passengers from Greece to Lithuania in Europe was intercepted by a Belarus-sent fighter jet mid air, and made to force-land by the regime of Belarus at the Minsk airport.
Pilots, ATC, and passengers were told it had something to do with a bomb scare, but then Belarus authorities quickly jumped onboard, arrested a dissident journalist critical of the Belarus government, and then let the flight proceed on its route.
The international community, and especially the rest of Europe, was livid.
The problem—firstly, Belarus is ruled by a notorious guy called Alexander Lukashenko for the last 27 years, often called Europe's last remaining dictator, who routinely steps on journalists and is known for quashing free speech openly. But this time, the EU and the western world is more worried about the unprecedented brash meddling with international airspace and traffic, which if left unchecked could cause more problems.
Actions follow—the European Union, as well as the CEO of the Airline Ryanair, is calling the event “state sponsored hijacking”, and are going to be meeting in Brussels on an emergency basis to discuss a retaliation.
Lastly, instability in the eastern European airspace is already an overhang on the issue—remember the Malaysia Airlines Flight 17 that was shot down by Ukraine in 2014, killing nearly 300 people.
Quick look at the spiking unemployment rate 📈
Nationwide weekly unemployment rate spiked to 14.3% on average across India as curfew-suppressed economy struggles to keep people working in jobs. For comparison, before the 2.0 devastation began, we were averaging 5-7% unemployment levels.
Rates showed higher spikes especially in the urban region, up to 17.4% for the week ended on Sunday May 23rd. Last we know, these high levels were seen back in June 2020, literally flushing all progress we made in the last 10 months down the drain.
Surprisingly, rural employment was showing some signs of recovery.
Bottomline—the economic plight of those surviving on thin margins of safety is unimaginable. But we’re far from seeing the bullwhip effect permeate through economic layers just yet, impact of which will be visible across spending, and consumption. Not to mention other social implications on women labor, child poverty, and such. Likely getting worse before it gets better.
Snapchat’s aggression in AR continues to baffle 👻
things go much beyond image projections and cute emojis.
Couple days after launching a new round of Spectacles, reiterating that Snap’s pretty damn serious about making that augmented reality eyewear somehow work despite 3 or so horrible failures in the past, Snap has now acquired WaveOptics, the developer of its eyewear product for over $500 million.
That’s Snapchat’s biggest acquisition for far, and to remind you, they just spent $250 million+ on AR specific software acquisitions in 2020.
What do they do—WaveOptics essentially makes lenses and opto-electronic components necessary for making AR glasses, while running a pretty robust R&D operation in optical hardware. Post acquisition, the 125 member company will continue to run separately, working closely with Snap’s software team that builds a marketplace for developers to build AR apps.
From Snap’s POV, investing to build a strong hardware foundation was imperative, as it swells into a $100 billion+ company, trying to become a heavyweight big-tech contender, trying to land punches on FB, AAPL, GOOGL, who run all their innovation-related hardware ops in-house.
Bottomline—AR is the means to capture the future, and Snap is securing itself a “computing platform” so it doesn’t have to rely on others as it builds apps and services to capture a piece of the $1.5 trillion social commerce market that Evan Spiegel’s betting on.
Coffee perspective—now we’re no investigative journalists here, but among all big tech, no other company has shown so much aggression and laser share focus on a singular opportunity of augmented reality, outside of perhaps Apple.
Snap and Apple could inevitably end up locking horns over the adoption of AR hardware, if at all. And perhaps not rattling the giant is what Spiegel is trying to do when applauding Apple’s App Store and 30% commissions!
Keep your friends close, your enemies closer?
Closing out—don’t sleep on Media 🤫
Axel Springer, the German publishing and media giant which owns brands like Insider (and Morning Brew), is now holding talks to acquire news company Axios for about $400 million.
Axios was founded barely 4 years ago by a couple journalists, Jim VandeHei and Mike Allen, and has already grown into a $60 million annual operation. Months ago, Axios was courting sports media company Athletic for a merger, but those talks fell through.
Axel Springer, with its diversified ownership, is consolidating the media empire around brands of the future, serving emerging niche classes, across readers, formats, and content, as the company sheds its print media past and prepares for a 100% digital future.
Big picture—common VC wisdom dictates that media businesses lack scalability or the potential for 100x outcomes, but continued success of emerging media brands (Axios, Morning Brew, Hustle, Insider, Barstool Sports) paints a completely different picture.
What else are we snackin’ 🍿
🚀 To the moon - private space company FireFly will send its lunar module called Blue Ghost to the moon in 2023, atop a SpaceX Falcon 9 rocket. Mission also includes a bunch of NASA owned R&D material to be carried to the moon.
💰 Meme of the day -memes in newsletters is too mainstream. How about newspapers? Analysts are busy decoding a no-name venture called Landomus Realty Ventures, which has been taking out ads in major newspapers asking the PM to allow for a $500 billion investment in GOI’s National Infrastructure Pipeline scheme.
Hit that 💚 if you liked today’s issue.
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