Come on, Twitter
Elon making history, Mota bhai delivers, and third phase of vaccinations.
Hi 👋, Tanvi here.
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Let’s go ahead and get started:
Kicking off the week ☕
✅Gaming party out there—Kids in the west cashed in their second stimulus checks on nothing but stonks, a new phone, and some games. A total of $15 billion was spent on gaming for the last 3 months, extending the industry’s pandemic led gold rush into another year. Hardware consoles particularly (Xbox, and the newly launched PS5) saw spending pop 81%! All that extra cash flooding the gaming space is expected to considerably accelerate the pace of innovation in AR, payments, NFTs, over the next few quarters.
✅ Making history—last November, Elon Musk’s SpaceX had put four NASA astronauts in the International Space Station, in one of the first NASA-SpaceX joint missions ever, using the sleek SpaceX designed Dragon crew capsule called “Resilience”. Last night, all 4 landed back safely on earth after spending 167 days in space—and in humanity’s second ever night time space landing since 1968. The suits, the interiors, the aesthetics… everything here looks oddly sexier than the “government” funded space missions we’re used to seeing in the past.
Making history, and the future at the same time!
Twitter can’t get its shit together🐦
Zuckerberg, Pichai, Spiegel—the overlords of digital advertising got an A+ from the markets for blow-out performances by their respective companies. As analysts called it, “couldn’t have been better”.
Then Jack Dorsey turned up, and markets gave him a C-.
Where is growth bruh—Twitter’s revenue growth of merely 29% failed to enthuse the markets (which would’ve been fine if literally everyone else wouldn’t be up there posting 50%+ rates).
Then user engagement on the platform grew a much slower 20%, with total “monetizable” users (that’s Dorsey’s way of labeling droomscollers like us) stopping short of 200 million, well below what the markets were looking for.
So what’s the problem?
Too few ads—Twitter’s feed style layout isn’t too conducive to ads (Insta for example has multiple formats, often too hard to differentiate between ads and content)
Too slow to innovate—Twitter’s team doesn't exactly have a reputation for being fast. Spaces is under testing forever. Fleets have been a dud. Million more features have been buried in the past, none adding any compounding value
Engagement stalling—the company wants to build around “power users” only, but so far growth has been lukewarm
Booted Trump—the aggressive purge of accounts is throwing bots and morons off the platform, but also kicks out engagement driving personalities sometimes. Sure we don’t need bad actors, but the governing policies are full of cracks
and then you wanna go out and buy Clubhouse for $4 bill?
None of these are new problems honestly, and that’s exactly what’s pushing the limits of investors’ patience. Stock was hit nearly 15% since the numbers came out.
What’s ahead: despite having a well loved product, the company has failed to prioritize monetization. There’s big things in the pipeline though, with big plans to structure the product around “creator monetization”, but judging by the rap sheet by far, it's too hard to get too excited this early.
Annual investor-land ritual 🧐
Calling Berkshire Hathaway’s annual shareholder meeting a sacred ritual for market fanatics would be an understatement.
Thousands of investors tuned in to listen to Warren Buffet and his billionaire buddy Charlie Munger take questions on how their investments performed, and whatever else is on top of investors’ minds—from Bitcoin, to Mars Colonization, to Robinhood.
And as always, Buffett and Munger spoke their hearts out. Few nuggets for ya:
Munger still ain’t a fan of Bitcoin—“of course I hate the bitcoin success. The whole damned development is disgusting and contrary to the interests of civilization”. Ouch.
“We’re seeing signs of inflation already”—warned Buffett on the macro conditions investors need to think about immediately post-COVID
Overall approving on how the economy has been “resurrected” by governments, and of the outlook going ahead for the stock market
“Selling Apple was a mistake”—Buffett had actually made a rare technology investment buying into Apple in 2018. Although he made tons of money off it, he sold off some in 2020. Apple went on to blast a 50%+ growth quarter last week. So yeah… that’ll sting.
Warren also called Robinhood ‘an enabler of gambling’, stuff that brings out the worst instincts of an average investor
By the end of the day, tech as a sector was feeling totally out of love, and that did not really sit well with folks tuning in from the valley.
Here’s a quick link to Buffett's letters to Berkshire shareholders btw if you’re looking for some Monday reading.
Mota bhai delivers despite the raging storm 📈
Reliance, India’s largest conglomerate, met with investors last week to discuss its business performance—and honestly things couldn’t have been better.
RIL empire made almost ₹1.7 lakh crore in revenues, up 11% vs last year
Profits however grew a slower 0.7%, (still a massive ₹13K crores), but mostly as costs of operating in the pandemic pile up
Both revenues and profits were above market’s expectations
What we care most about however is the growth business…
Jio Platforms grew sales by nearly 48%, and an eye popping 436 million subscribers use the mobile service. Average revenue made from each user is kinda dwindling though, as competitors Airtel and VI are stepping on the gas, but this is a long drawn out battle and Ambani is playing with tankers full of gunpowder.
Lastly, Reliance Retail, which looks after offline stores and ecommerce divisions of the empire saw pretty sharp expansion too, thanks to all the revenge consumer spending we saw in India before COVID took us all down…
Despite the overall solid performance, the stock got dragged down about 1.5% in Friday’s merciless sell off.
Otherwise a quiet Sunday news wise. Hoping we see some respite with the fresh cases this week.
Enjoy your coffee, and stay indoors.
What else are we snackin’ 🍿
💉 Some good news - Vaccinations for the age group of 18-45 years began on May 1st and over 85K people were vaccinated on the first day. Drop in the ocean, but still some progress.
✈️ Corporations standing up - cloud computing giant Salesforce sent a 747 loaded with medical supplies and oxygen concentrators all the way from SF to India over the weekend.
Hit that 💚 if you liked today’s issue.
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