Google's monster quarter 💯
Big fat bonuses, Debt problems, and Meta gets screwed.
Market summary: 📊
Budget helped Indian markets extend its rally into another day. US had a positive day too, still far from making up for January’s messy decline.
US:
S&P 500 - up 0.94%
Nasdaq - up 0.80%
India:
Nifty 50 - up 1.16%
Sensex - up 1.18%
What’s brewing hot? ☕
📈 Buy now, Pay never — the US disclosed that it’s total outstanding debt has spiked to $30 trillion — a record high, as the government borrowed as much as it could to fund major infrastructure bills and to limit COVID’s blowback. Debt here is basically money the state borrowed through securities issued to whoever is buying — which come with interest obligations. Almost $7 trillion of these securities for example are owned by foreign governments like China! Rest by Mutual funds, Insurance giants, and other government agencies. Anyway, the mountain of debt has grown 43% since COVID, and nearly 3x since the 2008 financial crisis.
💸 Raining bonuses in finance — all that deal-making of 2021 (IPOs, M&A, Takeovers) helped banking and finance execs take home record salaries. The top 5 banks on Wall Street handed out a combined $142 billion to their employees last year. J.P. Morgan topped the list, paying folks a total of ~$39 billion. The average Goldman Sachs employee took home a $400K bag, a 23% jump over 2020. Not bad for a pandemic!
Alphabet’s growth flywheel won’t skip a beat 🔥
Team Pichai scored a 100/100 from Mr. Market last night, to close out a record 2021 for Google — thanks to strong tailwinds in its core businesses of digital advertising and enterprise software.
Quick look at Google’s 4th quarter’s numbers: ☝️
Revenues of $75.3 billion, jumped 32% YoY
Google Cloud revenues grew by 45% YoY; YouTube grew 25% YoY
Finished 2021 with $257 billion in revenues, growing 41%, with 31% operating margins, putting $76 billion in its pockets as profits!
Among other important standouts, YouTube’s advertising empire is now a $35 billion+ annual business, for the first time eclipsing Netflix’s revenues.
And, under Thomas Kurian’s leadership, Google Cloud is now a $20 billion+ run-rate business — slowly catching up with AWS and Microsoft’s Azure.
Worth mentioning — Google also announced a 20:1 stock split. Basically, split a stock into 20 smaller portions — a move meant to bring the stock price down from like $3,000 a pop to something accessible to everyday investors.
Big picture — $GOOGL stock was one of the best performers among FAANG for 2021. Looks like 2022 won’t be all that different.
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Latest from India’s Venture Town 💸
Loadshare, a logistics startup, closed a $40 million Series C from Tiger Global, Filter Capital (not us huh) and a few others!
Loadshare is like Delhivery but for regional logistics. It’s building a network of delivery agents and warehouses to offer local transportation and last-mile delivery solutions — powering 10-minute grocery delivery, food delivery, and other services for Swiggy, Amazon, and even brands like Unilever and P&G.
They currently operate in 18 cities, delivering over 250K orders daily. Fresh capital will be used for hiring, and to upgrade to a total EV fleet.
And then over to ecommerce, ☝️
FirstCry, the marketplace for newborn baby products, saw a big cash infusion from India’s own sovereign wealth fund — the National Investment and Infrastructure Fund. NIIF will invest a total of $240 million into FirstCry — putting majority of the funds to buyout a few major investors, and about $100 million to buy a direct stake, per ET. FirstCry’s existing investors like Premji Invest doubled down too.
Quick look at a software acquisition 💰
What happened — conversational SaaS platform Gupshup acquired another communications software-company called Knowlarity — for $100 million.
Gupshup is basically building a Twilio-equivalent for India — selling an extensive suite of APIs and applications that let brands build messaging and customer-chat experience. Aka the “infrastructure” that makes it possible for your favorite brand to text you, or allows support agents to communicate with you on Whatsapp, and such.
Knowlarity meanwhile offers a similar suite, but is heavy on voice apps — powering support centers, call centers, etc., and with a focus on selling to SMEs. The acquisition will allow Gupshup to expand beyond just text into voice, and maybe into a broader suite of customer contact solutions.
Closing out — Facebook absolutely murdered 😢
It’s a bloodbath in Menlo Park. Facebook fell short by a mile on investor projections for earnings for its last quarter. Although advertising revenues grew 20% YoY, Facebook’s ad targeting continued to suffer after Apple’s IDFA privacy updates, which made it hard for them to target specific format of ads.
Guidance for the next quarter was dismal too — expecting just 8% YoY growth in revenues. Also, Zuckerberg said engagement was softening up growing 8-10% YoY across all apps — as TikTok and other rivals eat up time share of especially younger audiences in the Western world. Not good.
Stock was promptly hammered down 22% in after-hours trading, wiping off nearly $175 billion off of the company’s market cap in a matter of minutes!
What else are we Snackin’ 🍿
👏 Getting better - unemployment rate in India fell to 6.57% in January, the lowest since March of 2021.
🛰️ Bit expensive, no? - SpaceX is finally ready to bring its internet services to the market. Premium version costs $500 a month, offering 500Mbps speed. Umm… maybe ideal for offices?
⏳ Papers ready - GOI will file its papers finalizing the LIC IPO by next week. Chunks are being reserved for customers and anchor investors.
Hit that 💚 if you liked today’s issue.
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