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Market summary: 📊
Another modestly positive day in India as markets sober up to reality. US investors are now slowly eyeing all time high again, after a pretty soft and steady start to 2021 so far.
US:
S&P 500 - up 0.68%
Nasdaq 100 - up 0.49%
India:
Nifty 50 - up 0.20%
Sensex - up 0.065%
What’s brewing hot? ☕
✅ Oldies is where the money is—everybody likes to hate on LinkedIn, but be surprised when you know that Nadella’s baby single handedly brought in nearly $3 billion in advertising revenues over the past year, still growing a solid 60% YoY. That’s more ad money than Snapchat and Pinterest earned—clearly there’s more dough in marketing B2B products to boomers, than showing ads for neon colored shirts to broke teenagers.
✅ RIP to a legend—Michael Collins, the Apollo 11 pilot, who as NASA would put it “piloted mankind’s first voyage on the surface of another world”, passed away last night. Collins was in charge of driving the shuttle that carried Neil Armstrong and Buzz Aldrin on humanity’s debut mission. He was 91.
Facebook and Apple decimate expectations 📈
What’s happening—Zuck is making money hand over fist, because folks just can’t stop scrolling Insta. FB reported a cracker of a first quarter yesterday, with revenues growing an awesome 48% YoY, as traditional advertising (TV, Newspaper, Billboards, Magazines) slowly withers into obsolescence, and all of that spending comes chasing social platforms.
Remember the time when a bunch of big name ad buyers boycotted the platform? Very cute.
Literally every metric FB reported was stellar, except for one though...Growth in the user base, which is kinda slowing down, with daily active users growing only a tiny 8% to 1.88 billion.
But when you’ve already tapped into like 3.5 billion people on the planet, or in other words, 70% of ALL people who have ever used a smartphone, how much further can you really go? Investors were smart to see past that, and Facebook stock jumped 7% on the results.
“Competition is for losers” said Peter Thiel, an early mentor to Zuck, and that philosophy would go on to form the bedrock of Facebook’s expansion strategy. Couldn't have been more true!
Key signal: Google grew 35%, Snapchat 66%, and now Facebook 48%—there’s only 1 truth to the world right now: the digital advertising market is unstoppable in 2021.
Then Zooming into Cupertino, California
15 minutes later Tim Cook walked into his conference room, with investors and analysts dialed in for Apple’s numbers now. And boy did Zuck’s performance look like kiddie play...
Despite a record holiday quarter in December, the $2.3 trillion dollar enterprise managed to grow revenues by another ungodly 50% in the first quarter of 2021, to make $90 billion in sales, absolutely knocking it out of the park on all metrics:
Devices are obviously flying, thanks to record work from home and edtech demand
Sold $48 billion worth of iPhones, up 65% YoY.
Mac pulled in $9.1 billion, up 69%.
iPad up 77% to $7.8 billion
And, Asia Pacific sales grew 97%!! We see y'all upgrading all those phones here...
Bottomline: shut up and just figure out a way to buy some stock, please?
In this town, everyone gets whipped 🎯
China’s asking its big tech giants to stand in line for a spanking, one by one.
In the latest, Tencent will be fined $1.6 billion, for alleged “improper” reporting of past acquisitions, as well as anti-competitive behavior, particularly in their music streaming business.
Basically, over the years Tencent had acquired smaller streaming companies in China to solidify the position of its own streaming product. Then using its market power, it forged exclusive agreements with music makers like Warner, Universal, and Sony. Then Tencent approached the remainder of the streaming platforms left in the market, and sold them “must have” music for exorbitant prices -- at least that’s what the regulator alleges.
Using that as a bait, regulators are also sniffing around for any evidence of strong arming in other relevant deals around the broad Tencent portfolio of products.
FYI, Tencent owns the Whatsapp of China, WeChat, which easily has almost a billion users.
Far as the regulators are concerned, their moves stopped making sense a long time ago, with an agenda for pinching every big tech giant set from the top. Just weeks ago Alibaba was punched in the gut with a $2.9 billion fine.
So who’s next now, Bytedance?
Gotta eat your own cake 🤷♀️
Mutual funds managers in India got a cute surprise from SEBI.
Regulators are demanding that all fund managers, analysts, and key executives at the company that creates and distributes mutual funds, receive 20% of their annual pay directly invested into the funds they’re selling to common people, locked in for 3 years.
Basically, it's the regulators’ way of saying if you can’t deliver returns for yourself, how in the name of god can you look after your clients hard earned money?
Critics say the move is draconian, especially folks who earned their way to the top, and now get paid by the boatloads, and would naturally want to diversify their earnings across the board.
But then SEBI has its own reasons—a damning 80% of mutual funds in India underperformed the markets in 2020, meaning you’d make more money if you’d just bought a low cost index fund that tracks the Sensex or Nifty instead.
So… if you’re forced to manage your own wealth, perhaps you do right by customers too.
Closing out—leaning hard into culture 🙌
The influencer arrangements keep getting thicker.
Brands, especially tech companies, are not just spraying marketing capital on a bunch of Insta-models anymore, but are actually investing significant time in building long-term relationships, and in many cases welcoming “cult leaders” on their cap tables.
Two intriguing happenings:
Current, a US based neo-banking service that targets the Gen Z base, announced a long term partnership with Mr. Beast. Beast’s face is literally being plastered over all of Current’s webpage, and we’re guessing a thick wad of cash was sent his way. The platform also raised a $220 million round at a $2.2 billion valuation, and Beast is apparently now an investor too.
Current’s competitor Step, which is running a similar service, chose to work with TikTok star Charlie De’Amelio, and managed to scale up to 500K users in barely 2 months since launch. Step used those metrics to raise a $55 million follow on round.
Strategy for the upstarts is simple—leverage the fame of the modern day stars, tap into their cult-like following, and kick off network effects that pull and retain millions of users in one stroke who would never give up on your service because…. well, “that’s what Charlie’s on.”
As “tech” gets somewhat commoditized, we’re bound to see more and more of this co-mingling with culture—as a differentiator, and a distribution hook.
What else are we snackin’ 🍿
🙌 Neighbors to the rescue - Bangladesh will be sending emergency medicines and medical equipment supplies to India including meds, and 30,000 PPE kits.
👏 Making it work- IIT Bombay demo’d a concept tech that converts nitrogen generators into an oxygen generator, hoping to bridge shortfalls and accelerate the procurement of oxygen supply equipment.
Hit that 💚 if you liked today’s issue.
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