Cannon loaded
Ride hailing woes, hardware challenges, and Bezos grabs pot.
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Market summary: 📊
Two back to back positive days, but it's hard to get too hopeful in the backdrop of all the mayhem. US markets have turned super weird—high growth names get murdered, while back to normal stuff is flying high.
US:
S&P 500 - up 0.82%
Nasdaq 100 - up 0.82%
India:
Nifty 50 - up 0.73%
Sensex - up 0.56%
What’s brewing hot? ☕
✅ Do what you want, long as you write some code—Google runs some of the most extravagant campuses for its employees—with an unending list of perks that could rival the grandest of hotels. Latest addition? A 3 day office policy, that too, only if you’d like. Pichai disclosed a detailed return-to-work plan yesterday that lets employees work from offices if they wish, or work from any other city, or another campus, or if the team allows for it then even go fully remote. By far, the most coherent “hybrid” work plan disclosed by any big tech company.
✅ Atmanibhar cleanse complete—PUBG is coming back to India in a new cloak, renamed the Battlegrounds Mobile India, tryna blend in with the “atmanirbhar” crowd, with a logo that’s literally dipped in tri colors, offering careful finishing touches to the makeover. TechCrunch however promises that it's the same old PUBG under the hood. I mean… gotta give it to the developers’ ingenuity here. Krafton did everything possible to fix its missteps—cut ties with Tencent, relocate data centers to India, and even pledge a $100 million investment in the Indian gaming segment. Finally picked up the patriotism wildcard and shoved it right into the face of regulators. Say no now…
Loading the cannon 🔫
Big fat deals is THE way forward for Tiger Global—which is apparently out raising another $10 billion growth fund, its largest ever, barely months after it closed a $6.65 billion raise.
The pace at which the growth investing platform is deploying capital is astounding—over the past 120 days, more than 100 deals have been announced, with Tiger funded businesses raising nearly $22.2 billion in that time frame. Just to put that in perspective—for the first 3 months of 2021, ALL of the global IPO market has raised about ~$100 billion in total.
In any case, out of those deals there were 7 unicorns in India, and judging by Tiger’s inclination for emerging markets, we’re far from done here.
Gonna be a long ride back home 🚕
Been more than 12 months since the global ride hailing business has been depressed, and Uber’s newly released numbers continue to paint a gloomy picture in the near future:
How’s Uber hanging:
Global revenues down 10% to $3.9 billion
$6.8 billion worth of ride hailing trips booked, down nearly 38%
Food delivery bookings grew 166% to $12.5 billion—if not for Uber’s food delivery business, the empire’s crash was a certainty
Couple days before, Lyft, which competes against Uber in the US, gave a similarly bleak outlook, with revenues down 38%, and minus a food delivery operation to salvage things, Lyft was literally forced to wash its hands off of its autonomy operation.
Fully vaccinated western consumers however are slowly starting to step out, but some form of remote work sticking, the commuter crowd has thinned out, and a 15-20% permanent deflation in demand is going to be inevitable, and it's really a big question how the ride hailers are going to salvage their razor thin margins in environments like this.
What matters: the big unlocker of profits for ride hailers was going to be autonomy, which as we noted previously multiple times, keeps hitting walls.
And considering the painful dynamics of the ride-hailing game, Ola's ambitions to move horizontally to expand into EVs suddenly appears so shrewd. Gonna pay bills, atleast.
That did not end well... 🤷♀️
Peloton, the darling of the pandemic, is seeing its fortunes turn into rubble.
The company that sells $3,000 indoor workout bikes, and has somewhat of a cult following worldwide, has recalled ALL treadmills it has ever sold, after multiple incidents of injuries which even resulted in a child’s death. Terrible.
Apparently Peloton’s treadmill product, designed to offer a more sturdier base when people run and passionately compete virtually, uses a base of interlocked plates instead of a belt used by regular treadmills, which ends up leaving a gap underneath the treadmill, which when in full speed operation can suck things in. Which, ultimately led to the mishap.
Peloton's first response when regulators asked for a recall wasn’t friendly either, but the CEO apologized for that, and now all 125,000 machines have been recalled, with full refunds.
Obviously recalls are no good for business and $PTON stock was hammered by the markets, now down almost 50% from all time highs of December.
Bottomline: machines will be fixed—but the loss of reputation, and worse in this case, the loss of life is irreparable. Also, a reminder why hardware led innovation is so freaking hard.
Now imagine self driving cars....
Closing out—Crypto’s big day 📈
We have the first formal $1 billion+ crypto investment deal—Galaxy Digital, a crypto focused investment house led by billionaire Michael Novogratz, just acquired BitGo, a company that securely stores crypto coins (also called a custodian) for institutional investors.
You may be too hasty to go buy coins on literally any exchange you see online (we’re guilty too), but the folks putting a piece of their $100 million family inheritance into Bitcoin don’t do that.
Institutional buyers are happy to pay a premium for safety and security, and round the clock audits of who and where holds their assets for them.
BitGo processes 30 billion monthly transactions, and has over $40 billion+ assets under custody for 400+ institutional houses—which makes them pretty legit.
And as demand from the wealthy keeps rising, the role of these platforms will increasingly matter more. No brainer for Galaxy Digital.
What else are we snackin’ 🍿
💼 Secure the bag - Bezos sold $2 billion worth of Amazon stock this week, in anticipation of his exit as the CEO of the company later this year. Yachts and Monaco villas incoming.
Hit that 💚 if you liked today’s issue.
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