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Market summary: 📊
With all said and done, this week was a disaster for global markets. India receded considerably, losing some more yesterday. In the US, tech took a huge beating.
US:
S&P 500 - down 1.93%
Nasdaq 100 - down 2.09%
India:
Nifty 50 - down 1.32%
Sensex - down 1.26%
Tesla had a great 2020, and so did Maruti 💪
Despite the global automobile market declining significantly this year, Tesla somehow managed to sell a record 500,000 cars, nearly 36% higher than 2019. For the December quarter particularly, total deliveries jumped 61%!
Musk cheered the company’s progress, but investors, umm... not so much. Profits were a bit lower than expected, and bulk of the profits actually came from these government credits Tesla gets for selling zero-emission cars. Without those, they’d be in the red. Given stock has literally run 10x in the past year alone, people weren’t gonna settle for anything short of absolute perfection.
Then there’s Maruti Suzuki 🔥
King of the budget auto space in India reported revenues up 13.3% and profits up 24.1% compared to last year—a solid recovery from the worst of lockdowns, as cars clear out from showrooms faster than Maruti can make them.
Maruti also said that rural demand grew 40%—a surprise acceleration, and that most of that came from first time buyers. Pent up savings coming out, as well as with people getting uneasy to use public transportation during COVID could be some of the reasons.
Worth noting: Tesla sold barely one third of the cars Maruti sells each year, and yet is valued at over 25x more than Maruti ($800 billion for Tesla, vs. $30 billion for Maruti).
Oh! And while we’re on autos, the old bulls are now catching up, ☝️
General Motors, one of the largest automakers worldwide, announced they’d be making a full electric vehicle transition by 2035. Light cars, mini trucks, SUVs—all electric. $27 billion will be invested over the next 5 years towards the cause.
GM owns lucrative brands like Buick, Cadillac, Chevrolet and Corvette, and fans and petro-heads were a bit taken aback by the move.
Making a half decent electric drivetrain is easy, but making it as polished as a traditional engine, that has literally a century-worth of innovation that went into making them so smooth and efficient, is a bally gamble.
Also, kinda cool that the entire global auto industry (trillions in spending, hundreds of millions employed) is eyeing an existential pivot because one man, 20 years ago, thought it's crazy we don’t have battery powered vehicles, and put his money to actually make it happen.
Make hay while the sun shines ☀️
Coinbase, one of the world’s largest crypto trading platforms, announced they will be going public via a direct listing.
The timing couldn’t have been right for them—Bitcoin is obviously flying high, and more retail investors are looking at the asset favorably for a tiny exposure. Moreover, with the recent debacle of Robinhood, which surfaces the ugly belly of the financial system in the west, the crypto ecosystem and promise of decentralization just got a fresh lifeline.
In the last private round, Coinbase had raised capital at a valuation of $8 billion. Analysts are suggesting a public market valuation of even as high as $30 billion!
Aight that’s it for today, and a quick look at the hottest stuff this week… ☕
🎙️ Clubhouse entered the unicorn club—less than 10 months since its founding, Clubhouse, the audio-only social app that is literally pioneering its category, raised a new round of capital from Andreessen Horowitz at a billion dollar valuation. The company literally led with hype and FOMO, keeping a high bar by filtering people with an invite only model, virtually writing a playbook on how platforms can be tactfully scaled without spending a dime on marketing.
💳 Credit card for kids was seeded—Junio, a kids-focused fintech startup, raised a ₹75 lakh seed round from CRED's Kunal Shah, Deepak Abbot, and a few other notable angels. The company founded by a couple of former Paytm and Softbank employees, plans on inculcating financial awareness and discipline in children, by offering credit cards with parental controls, with purchase allowance linked to completion of specific tasks.
🛒Birla picked up 51% stake in Sabyasachi—Aditya Birla Fashion spent ₹398 crores on acquiring a majority stake in the designer label. Birla plans on leveraging the creative machine of Sabyasachi, to build a fast fashion ethnic apparel brand for Indian and the global markets. With nationwide distribution, as well as a respectable online strategy, they could quickly scale a profitable business from scratch.
🍎 Apple shows why they’re a $2 trillion company—firstly, Apple nearly doubled their market share in India to over 4% in the premium category, for 2020, by shipping almost 3.5 million iPhones for the year. The impact of that push was very visible when the company reported their best ever quarter to date. Apple made over $111 billion in revenues, with growth across all product categories—iPhone (grew 17%), iPad (grew 41%), Mac books (grew 21%). The trend is expected to sustain, aided by strong pull from work-from-home upgrades.
📈 Stonk bois take on Wall Street—what started as a short-squeeze on Gamestop turned into a full blown attack on Wall Street and the legacy financial systems, with YOLO traders and 19 year-olds in their pajamas out to break hedge funds like Citadel, Melvin, and others. Billionaire influencers and politicians further fanned the flames chasing eyeballs and engagement for a few days, until Robinhood and other platforms blocking trading mothballed the entire thing it into a global scandal. Financial markets were literally held hostage by the debate for the entire week. BTW—$GME ended the month up nearly 1,600%!
🐦Twitter wants some of that cake—Twitter acquired Revue, a Substack competitor that allows anyone to build an audience via long form newsletters, continuing a streak of moves that are meant to make Twitter friendlier for the creator economy. So far in the past months they’ve acquired Breaker (for social podcasts), launched Spaces ( a clubhouse competitor), bought Squad App (a video screen sharing app), and Dorsey also mentioned testing out subscription-only tweets. Firing all cylinders!
☁️ Finally, Microsoft showed that cloud is unstoppable—Microsoft's Azure cloud business grew 50% for the last quarter of 2020, with other SaaS products growing at a much faster pace than expected. Nadella reaffirmed that the enterprise IT transition to the cloud is going faster than imagined, giving confidence to SaaS companies across the board. Also, Microsoft saw gaming revenue grow a massive 40% YoY—thanks to a record holiday quarter and locked down consumers buying consoles and new games, while LinkedIn grew 23% as post recession job searches go on aggressively. Total haul? $43 billion for the last 3 months!
Hit that 💚 if you liked today’s issue.
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