Local sports, FTW
Crypto taxes, Tencent marches on, and stuff from the week before.
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Market summary: 📊
Great comeback session on Friday in India, with Sensex resting above 50K, and Nifty above 15K for the week. US had a meh day, with tech giving up some points added in the last 2 days.
US:
S&P 500 - down 0.078%
Nasdaq - down 0.61%
India:
Nifty 50 - up 1.81%
Sensex - up 1.97%
Weekend Brew ☕
✅ Lord giveth, and taxman taketh away—Global governments are sniffing out all crypto profits. The US just proposed a bunch of guidelines that mandate changes to the way banks report transactions to ensure people pay their taxes on their crypto gains. Firstly, the IRS is getting a fatter tech budget to improve systems to monitor accounts at scale. Then banks, and exchanges are being put on the hook to report any transaction, buy or sell, above $10,000 to the IRS. In the end, the US government expects to net about $700 billion in tax revenue a year once the guidelines are fully enforced. Other global regions will only follow. “Decentralization”.
Zuckerberg eyeing local sports 🧐
A year ago, when the world went online, Facebook quickly jumped on the opportunity and added a live-events platform within its blue app. Now Zuckerberg wants more.
This week FB announced a comprehensive pay-per-view sports broadcast service, where users can just login to FB, pay a couple bucks, and directly watch their favorite game.
The service will particularly focus on regional and smaller sporting events for starters.
Opportunity to disrupt—global sporting events are generally distributed for live-viewing via greasy and cozied deals with sports networks and traditional TV broadcasters—where TV guys usually pay out a HUGE sum to leagues, to secure exclusive rights, and then go out and milk consumers of the $$$ for viewership.
If FB can, with its massive reach and user base, promise the leagues equally lucrative contracts, and on the other hand offer users more control and friendlier pricing, the offering could be a game changer.
Also, Zuck’s focus here on local and regional sports for starters is intriguing. Unlike in India, the western world has a huge following for college sports and local teams, which is a great opportunity for FB to capture a regional audience = more opportunity to show regional ads, which is increasingly becoming FB’s bread and butter business.
Bottomline—if you’re into sports even a bit, you’re probably well aware of the number of pirated portals you’d have to follow, navigating a minefield of spammy digital ads, just so you can watch a game your local cable provider won’t broadcast…. It's ridiculous.
Pay per view service, globally could be a game changer, and perhaps a final death nail in disrupting the cozy profit pools of traditional media companies.
Only drawback? You’d have to open the FB app for that. Pls.
Tencent marches on, despite daddy China’s spanking 😎
China may ban, and fine, and arm twist its internet giants as much as it wants, the businesses won’t blink an eye as far as execution is concerned.
Tencent, one of the largest tech companies out there, which runs the Whatsapp of China (WeChat) and has interests in commerce, payments, digital ads, streaming music just reported its quarterly numbers, a sweet reminder of how massive the Chinese internet game really is!
Quick look at the quarter:
Revenues of $21 billion, up 25% YoY
Net Profit of $7.4 billion, up 65% YoY
WeChat subscribers grew 3% to 1.24 billion users
Lastly, Tencent’s gaming business was up 17% to $6.8 billion, mostly because of the growing popularity of PUBG and Honour of Kings
Barely 4 weeks ago China slapped the company with a $1.5 billion fine for monopolistic practices in its streaming business, and despite the negative rhetoric, Tencent offered quite a bullish commentary to investors, identifying game development, business services, and short-form video platform as critical areas for further investment.
That’s it for today folks...Take it easy this weekend. Here’s a quick look at major things that went down this week
👏 We’re back for round 2—the success of GOI’s manufacturing incentive scheme for smartphone and electronics makers turned out to be a HUGE confidence booster, and now for the second round center is focusing on electric mobility and energy storage. ₹18,000 crores worth of incentives have been proposed, to boost domestic R&D and follow on production of advanced energy storage facilities and batteries. With less than 5% of global vehicles electrified today, India has a solid shot at getting ahead of the manufacturing curve with this generational global technological shift. We’re bullish.
🙂 Innovation is the name of the game—for 25 years, PayPal led the revolution on payment facilitation for internet businesses. Now the $300 billion giant is slowly transforming into more… looking to serve broader needs of merchants as COVID induced digitization makes omnichannel (online + offline) operations imperative. Latest move, PayPal acquired Happy Returns, a returns processing company, that which works with local retail shops to simplify pick up of returns, while offering end to end software to brands to process returns, send updates, and collect payments.
🔥 Tesla got competition—Guess who just stole Tesla's thunder… Ford, the low-key $60 billion old school auto giant, unveiled its first fully electric pickup truck, the Ford F-150. EV launches happen everyday, but this one was special because firstly, the unveiling was done by Biden himself, who even took the car for a spin, and secondly, Ford F-150 is the biggest selling car in the US for 43 years now. This is the mass adoption moment that EVs had been waiting for, and suddenly Tesla’s gargantuan valuation looks like a bubble waiting to burst.
🙌 Walmart and PhonePe makin’ big moves—PhonePe, the UPI and merchant payments startup, backed by Walmart and Flipkart, is looking to purchase Indus OS, an Indian mobile OS company, with nearly 100 million users, for about $60 million. We’re guessing PhonePe hopes to integrate its payment apps and services as default tools on the OS, for the 100 million+ users, while at the same time making the devices ideal to double up as payment processing terminals for merchants. Still guessing, but a combo like that could be a deadly lock in solidifying grip over emerging users who’re just adopting internet services.
📈 Pichai's plans—Google hosted its annual developer conference this week, and announced a bunch of updates including a look change for the Android 12 OS, changes to Google Workspace to make it more compatible for remote working, a wearable OS program with Samsung, etc. Investors were holding out for some big tech-led product upgrades to the Google Cloud Suite, hoping to heat things up against MSFT and AMZN, but that party was canceled.
😎 India's in or not—crypto markets took a stinky dump this week—with the China announced ban dragging most currencies down by as much as 50% from ATHs, only to bounce back to respectable levels in a matter of hours. Meanwhile, Polygon, an India founded crypto project, which is essentially building tech that makes the ETH blockchain more scalable and faster, breached the top 20 global crypto currency rankings after a rally that saw prices more than 8x over the last month. The success is a solid vote of confidence in the local ecosystem, and could be a massive shot in the arm to other tiny projects.
🤝 Adani continues to execute flawlessly—Adani Green Energy purchased all India assets of SB Energy which was originally owned by Softbank. The acquisition will add about 5 GW of clean energy production to Adani’s portfolio, bringing them closer to the 25GW clean energy production capacity target they promised shareholders by 2025. Meanwhile, Softbank happily got rid of the company as it looks to increasingly double down on what they do best—software and digitization of the global economy.
👀 Media wars are heating up—Warner Media and Discovery announced a $150 billion merger to form one of the largest streaming companies in the world, mounting an offense against the insurgent tech companies trying to disrupt the media game, with plans of spending $20 billion each year on making shows/movies for direct streaming. Hours later, rumours broke out that Amazon is courting MGM Studios, out of the blue, for a $7-$10 billion acquisition, hoping to add MGM’s legendary content slate which includes James Bond, Shark Tank, etc, to Prime Video. With Netflix, Disney, CBS, Warner Media, Amazon, Apple, YouTube, and even Snapchat and Facebook dishing it out, the media wars have never looked more crowded, and feisty.
Hit that 💚 if you liked today’s issue.
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